Sipho Mabena

By Sipho Mabena

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Life insurance claims show Covid death toll may be underreported

The spike in life insurance claims is notable, given that policy holders tend to have fewer comorbidities and have better healthcare.

Life insurance claims soared by up to 60% from March 2020 to January 2021 due to the Covid-19 pandemic, exceeding the expected death rate by four times at the height of the second wave of the pandemic.

Data submitted by four of the country’s biggest life insurers, representing around 70% of South African individual life insurance premiums, excludes universal life policies and limited underwritten policies.

Not even those with good health records were safe

The data from the Actuarial Society of South Africa (ASSA) is more surprising given that people with fully underwritten life insurance policies tended to have fewer comorbidities and usually have access to better healthcare.

Also Read: Stretched funeral homes brace for busy 2021 over looming Covid-19 deaths

Anja Kuys, chairperson of the ASSA’s continuous statistical investigation (CSI) committee, says that fully underwritten life policies were pure risk products, only issued to policyholders who have gone through the underwriting process, involving a comprehensive assessment of their lifestyle, health and medical history.

She said the mortality experience of these policyholders therefore differed significantly from the rest of the population.

Also Read: Covid-19: Diabetes, hypertension most common comorbidities in people who died in Gauteng

According to Kuys, the death benefit values of these policies tended to be much higher than the benefits offered by funeral or credit life insurance policies.

“It’s difficult to determine why the change in death rates for insured lives deviated so significantly from the national death rates during the second wave. This underscores the need for credible statistics that will enable life insurers to accurately price future risk and ensure they have sufficient capital reserves in place,” she said.

Death rates grossly underreported

The data from ASSA’s Death Claims Dashboard, which tracks data submitted by four of the country’s biggest life insurers, confirms concerns that Covid-19 deaths have been grossly underreported.

Since death certificates sometimes stated the cause of death as “natural causes”, “pneumonia” or “organ failure” even if this was caused by Covid-19, the society is convinced the actual number of Covid-19 deaths is probably higher than officially reported.

The society’s dashboard shows that in the 11 months (from March 2020 to the end of January 2021), the four biggest life insurers received 7,040 death claims against a total of 1.49 million fully underwritten new generation life policies.

Of these claims, 1,515 were for confirmed Covid-19 deaths. By comparison, SA officially recorded 44,509 Covid-19 deaths from March 2020 to the first week of February 2021.

In the same period, however, SA experienced 137,731 excess deaths due to natural causes, according to research by the SA Medical Research Council (SAMRC) and the University of Cape Town.

The research estimates that 85% to 95% of the excess natural deaths are attributable to Covid-19.

According to Kuys, when compared to consolidated claims averages for 2018 and 2019, the total death claims reported represent an excess death rate of 1.9 per thousand, bringing the total death rate for March 2020 to end of January 2021 to 5.1 per thousand.

“The average total rate for 2018 and 2019 was 3.2 per thousand, so this means the number of deaths over the course of the pandemic is nearly 60% higher than would have been expected in a normal year,” Kuys said.

Covid-19 deaths undercounting counterproductive

Dr Jo Barnes, Stellenbosch University epidemiologist, said ASSA’s data was in line with the observations of Dr Debbie Bradshaw in the report of the Medical Research Council’s Burden of Disease Research Unit and that of the Wits School of Governance’s Professor Alex van den Heever.

“One can assume underreporting to be a fact. The only unknown here is by how much. By all accounts, the number of deaths not officially ascribed to Covid-19 is substantial. The figure of up to three times the official number has been mentioned. That is a very large number of deaths,” she said.

Barnes said the underreporting of deaths during a pandemic had happened before and could be expected, especially in the first chaotic weeks when the first wave hit and health services were not well informed about the new risk.

She said the undercounting of Covid-19 deaths was not only counterproductive but also raised questions about why it was persisting as there were no gains to be had from doing this deliberately.

“Perhaps the most concerning aspect of this is that so many people passed away in the community without receiving adequate treatment. Some of them may not even have been aware that they had Covid-19,” Barnes said.

She said this hampered the curtailing of the spread of the disease and in turn caused more disease and deaths.

“It significantly hampers service delivery on a broad front, it complicates planning, it provides a foothold for far too many disinformation campaigns and conspiracy theories and in the long run it damages the trust between the government and the population in insidious ways,” she said.

According to Barnes, this trust was essential in getting cooperation for the conscientious who follow irritating but helpful control measures such as wearing masks and social distancing.

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Coronavirus (Covid-19) life insurance