What does shared value mean for life insurance?

“By design, Discovery Life’s extensive product range provides protective cover for potentially life-changing events,” says Daniel Stoch, a senior risk specialist at Discovery Life.

“Any person can be affected by the development of disability or severe illness — both of which can affect a person’s ability to earn sufficiently for a household. The death of a loved one is another life-changing event that can result in financial difficulties.

“The R4.8bn we paid out in claims last year spans our wide range of cover benefits, with less than 50% of that for traditional life cover. This tells us that we have an extensive enough offering that is capable of protecting people’s lives.

“Of the total we paid out between January and December 2019, more than R2.2bn has helped support families with life cover payouts. More than R1.1bn was paid to clients who submitted Severe Illness Benefit claims. We paid out R226m in multiple claims last year too. About 21% of severe illness-related claims were also paid out as second or subsequent claims.

“Also on the higher end of claims payouts during 2019 were against Capital Disability and Income Continuation benefits with more than R816m and R375m respectively,” says Stoch.

Enhancing people’s lives through rewards

“To maintain an offering that can better benefit people’s lives, we’ve woven in reward mechanisms that enhance financial security into every product offering. These include features such as upfront premium discounts and the ability to earn PayBack, as well as the option to select the Cash Conversion benefit, which provides lump-sum payouts in retirement,” says Stoch.

“To date, we have paid out about R6.8bn in PayBack to our clients. Between January and December 2019, clients received R1.2bn in PayBack. We saved our clients and their families about R1.2bn in gym fees during 2019 through our incentivised rewards programme, Vitality.

“When our clients take care of their health by eating well, exercising regularly and completing necessary health checks, they become healthier, even well beyond the point of retirement. This reduces risk for the development of potential conditions such as cancer or cardiovascular diseases — especially later in life when risk for these typically increases.

“In 2019, clients on either a Gold or Diamond Vitality status showed a 53% lower mortality risk than those who weren’t engaged with the programme. Positive behaviours enhance a person’s state of health and that lowers insurance risk. The benefit of this is that value can then be shared — in discounted premiums and PayBack. This contributes to making cover go even further.

“We’ve taken the stance that to protect people’s quality of life through insurance, we need to keep a close eye on what needs to be covered as comprehensively as possible. We assess risk based on these dynamic needs and offer a range of cover that can evolve to remain relevant. When cover is relevant, it’s also more valuable — for life,” says Stoch.

Discovery Life Limited. Registration number 1966/003901/06, is a licensed insurer, an authorised financial services and a registered credit provider, NCR Reg No. NCRCP3555. No liability will be accepted for the effect of any future legislative or regulatory changes. Product rules, terms and conditions apply.

This article was paid for by Discovery Life.