A year in review – insights from our claims data.

Sovereign’s claims provides a snapshot into the health issues affecting New Zealanders. I dove into the detail of our $380 million claim payments for the most recent financial year to see what the data would reveal.

About 45% of Sovereign’s claims related to life cover payments for those customers who died or became terminally ill. Half of these claims related to cancer, 15% to heart attack, and 10% due to a stroke. Sadly, about 5% of claims related to suicide and this figure increases to 15% for those customers aged under 40.

Mental health is also a factor in around 25% of Sovereign’s income protection claims; on par with cancer and heart disease. A recent report released by the Royal Australian & New Zealand College of Psychiatrists estimated the total cost to the New Zealand economy of mental illness to be about $17 billion (7% of our GDP). As we look at these cold and hard figures, it’s easy to lose sight of the associated impacts on our families and communities.

Whilst insurers have some way to go to better understand mental distress and to develop more inclusive insurance options, I take pride in the great work that our claims team does in supporting customers to get back on their feet. Last year, we spent around $1 million on rehabilitation services to support our income protection customers in their recovery. This money was used to pay for psychological support, occupational physicians, and even exercise programmes.

When it comes to health insurance, we paid about $70 million to support customers to access medical treatment. There continues to be a trend towards more effective and less invasive treatment options, particularly in the area of cancer care, which represents 15% of total claims. It’s hard to believe that the first private radiotherapy clinic opened in New Zealand in 2008 and just ten years later, private funding has enabled New Zealanders to access state of the art medical treatment.

Gynaecological claims (such as endometriosis) were also significant – representing about 22% of total claims for females. Access to publicly funded treatment for these complaints can be uncertain but the conditions themselves are very common – for example, one in 10 Kiwi women will develop endometriosis throughout their lives.

Finally, we paid out more than $50 million in trauma claims to help customers recover from serious medical conditions. Whilst medicine has made major progress in treating serious illness, the costs of treatment and recovery can nevertheless be significant. Modern trauma products today cover over 60 medical conditions and yet over 90% of claims continue to relate to cancer, heart disease, and stroke.

When we look at these numbers, it’s easy to see that insurance remains just as relevant today in protecting New Zealanders against the financial impacts of death, illness, and disability. Nobody wants to claim on their insurance policy but it’s a relief to know that it’s there.

 

Author: Len Elikhis

The financial services industry plays an important role in securing people's futures. I have a strong interest in improving financial literacy and delivering sustainable customer solutions in my role as Chief Product Officer at Sovereign, New Zealand’s largest life insurer. A qualified actuary, I was part of the leadership team that transformed Sovereign’s health business and have worked for MLC and Deloitte in Australia.

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