The team at Sovereign has provided some interesting insights into insurance claims over the past year. We think it’s much more than just an interesting read, it’s a good reminder about the need to protect yourself and your family against the financial impacts of death, illness and disability.
“Sovereign’s claims data is fascinating and provides a snapshot into the health issues affecting New Zealanders. I dived into the detail of our $380 million claim payments for the most recent financial year to see what the data revealed.
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 disease, and 10% due to 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 combined. A recent report released by the Royal Australian & New Zealand College of Psychiatrists estimated the total cost to the New Zealand economy of mental distress to be about $17 billion (7% of our GDP). As we look at these figures, it’s important not to lose sight of the associated social 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 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 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, 1-in-10 Kiwi women will develop endometriosis throughout their lives.
Finally, we paid over $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. Public health care and personal savings provide some measure of support but may not be sufficient to meet all of our needs or expectations.”
Len Elikhas, Chief Officer Product & Marketing at Sovereign.
To make sure you’re comfortable with the cover you have in place please get in touch with us.