What impact has Covid had on claims figures?
We were wondering recently about the impact that COVID has had on claims within the life assurance sector, and so we decided to do a bit of investigation by examining Irish Life’s (the leading provider of protection products in Ireland) claims data for 2020. While we have written in previous years about claims data, we were particularly eager to see the data for 2020, in order to see the impact that COVID had on the figures. There were 2 main headlines for us in the numbers,
- There was a reduction in the numbers of claims notified & paid during 2020 vs 2019.
- COVID related death claims accounted for 4% of Irish Life’s death claims paid in 2020.
A reduction in claims overall
This is probably not too surprising, as the day-to-day activity in Ireland was so seriously curtailed in 2020 with two periods of very strict lockdown in the spring and autumn. There were less people out and about, less traffic on the roads and less workplace accidents etc. Claims fell overall by approx. 20%, with the number of death claims down from 2002 in 2019 to 1691 in 2020. Likewise the number of Specified Illness Cover (SIC) claims fell from 919 claims in 2019 to 701 claims in 2020.
This reduction was not as a result of a more aggressive approach taken by Irish Life, who accepted 98.5% of all death claims and 89.8% of all SIC claims. To give you a sense of how these number translate into euros, Irish Life in 2020 paid out €83,422… on average every hour of the year! This adds up to total claims for the year of €166.8 million.
Many people associate the claims from companies such as Irish Life only with life assurance on death. In fact in 2020, 51% of claims were for living benefits, improving hugely the quality of life of people who had got sick and survived.
Other interesting facts are that cancers are still the number one cause of claims, and these are largely as a result of a sudden diagnosis. The average term on policies on which claims occurred was 18 years, with 3 claims on policies taken out in 1967, over 50 years ago!
What about COVID-19?
COVID wreaked havoc on all of our lives in 2020, and we can see the impacts in the claims data too. There were 68 COVID-19 related death claims (4%) in 2020 with an average claim amount paid of €48,000. The median age was 73 and most had a pre-existing medical condition – typically cancer, heart disease, diabetes, respiratory illnesses, high blood pressure and dementia. 8 claims were paid to lives under age 50. The earliest death from COVID was in late March 2020 and Irish Life also paid a small number of income protection and rider benefit claims due to COVID, including those with ‘Long COVID’ symptoms.
So in summary, COVID-19 obviously figured quite prominently in Irish Life’s claims data in 2020. However the positive finding in the data for 2020 is that the number of claims overall fell quite significantly, even with such a high proportion (98.5% of Death and 89.8% of SIC) claims being paid.
As with all areas of your personal finances, it is really important to review your protection requirements, particularly if your circumstances change in relation to your family, your career or your financial situation. We will happily help you review your situation and ensure that you have the right level of financial protection in place to safeguard the future of you and your family.