Discovery Life clients achieve vaccination rate on par with leading global standards

Late last month, we released our annual Discovery Life Claims Experience Analysis. As the pandemic progressed globally, life insurers were impacted significantly in terms of mortality and morbidity risk, and the resulting effect that this had on claims submitted by our clients. South Africa was particularly impacted by COVID-19; given our relatively late start with our vaccination roll out, as well as the devastating impact of both the Beta and Delta variants. While the COVID-19 pandemic materially shifted some of the medical and health trends observed previously, we, at Discovery Life, are proud of how our Shared-value Insurance model has enabled us to provide certainty of cover and value to our clients when they have needed our support the most.

COVID-19 severely impacted the 2021 calendar year and we anticipate in excess of R6bn of submitted COVID-19 claims to be paid before the end of 2021. During the calendar year 2020, Discovery Life paid a total of R4.7bn in overall claims, with R822 million of these pay-outs pertaining to COVID-19. Around 35% of COVID-related claims pertained to life cover. As much as 56% of these were paid out as Income Continuation Benefits, predominantly to medical professionals prior to the rolling out our vaccination programme, as well as the Sisonke Trial, which began in January 2021. Our data shows that the claims submitted correlated strongly with the three waves that we have experienced in South Africa.

The consequences of this tragic period are reflected in the disease trends we are seeing from our claims data. In the period between 2012 and 2020, the leading cause of life claims due to death related to either cancer or heart and artery conditions. This amounted to, on average, 27% of claims in these categories per year.

For the first eight months of 2020, however, COVID-19 significantly, and most tragically, outstripped any other cause of death; accounting for 57% of claims among our clients. These figures also highlight for us the critical importance of a continued emphasis on vaccines as the most indispensable public health intervention that is proven to reduce the spread of COVID-19.?

As a leading life insurer, it was imperative that we adjusted quickly to the changing circumstances. This included providing clients with world-first innovations, from the Multi-organ Benefit to tech solutions such as AI Activate. Vitality integration has also demonstrated the unique value proposition of our products, with proven outcomes that show lower morbidity and mortality risk for our engaged clients. Our most recent innovation, also a world-first, is the Vaccination Max PayBack limited offer, that rewards new policyholders who are either fully vaccinated or commit to getting fully vaccinated.

I am encouraged by the take-up of the COVID-19 vaccines among our Discovery Life client base. To date, more than 72% of all Discovery Life clients are at least partially vaccinated.?These rates compare favourably with global benchmarks. Most critically, Discovery Life’s older and high-risk age demographics reflect vaccination rates of more than 81%. This gives us a strong indication that we can significantly help to lower the impact of the next wave on our clients.

Our data shows overwhelming support for vaccination against COVID-19 amongst our clients. While vaccine hesitancy poses a risk globally in achieving desirable levels of population protection, we have found that only about 8% of our target market population have serious concerns or reservations. Only 3-4% of our own clients have displayed vaccine hesitancy. As such, we are confident that this can be overcome through the correct interventions, such as providing clients with all that they need to make an informed decision and providing convenient access to vaccination sites.

We’ve noted that regional access is problematic for some South Africans. When analysing available data, we’ve noted significantly higher rates of vaccination among clients residing in urban areas. In some urban areas, these rates are close to 100%. By comparison to rural areas, vaccination rates are sometimes as low as 40%. This indicates that ease of access and proximity to a vaccination centre could be the impediment we must try to help as many in our broader society as we can to overcome.

The renewed importance of staying healthy.

Our claims data also confirms the importance of healthy behaviour as a key means to protect against the health risks presented by the SARS-COV-2 virus and its dominant variants.

Clients who engaged with Discovery’s Vitality programme, which rewards healthy lifestyle behaviours, have shown significantly improved outcomes in terms of morbidity, mortality and lapse rates. Our Gold and Diamond Vitality members have shown a 73% lower mortality risk compared to clients who are not part of, or who don’t engage with the Vitality programme.

During the pandemic, Vitality engagement has undoubtedly been even more instrumental in saving lives. It illustrates, once again, how our Shared-value Insurance model achieves significantly positive outcomes for our clients, as well as for society; and how this ultimately also works to protect our risk pool. Lapse rates among our client base dropped to their lowest levels ever, despite the economic challenges many have faced over the past 18 months. This demonstrates how Discovery Life clients have enjoyed the value of our proposition and the certainty of our cover and claims pay-outs; as well as the immense monetary value derived from our unique offering, which includes PayBacks and Cash Conversion pay-outs. These remain one-of-a-kind in our industry, and this is evidenced by our outstanding persistency levels and low lapse rates.

In closing, let me thank our financial advisers for being at the frontline of ensuring that our clients experience the very best that Discovery Life has to offer; as well as our phenomenal people who continue to deliver outstanding service to our customers throughout what has undoubtedly been a challenging time.