The South African life insurer that pays the living

Discovery Life paid out a total of R11.5 billion to clients in 2024, with the majority of payouts – 60% – going to clients who are still alive as part of Vitality’s shared-value payments model.

Discovery Life published its 2024 claims experience report on Thursday, 10 April, revealing a total of R11.5 billion paid to clients during the year. 

This comprised R6.85 billion in individual life insurance claims, R2.4 billion in shared-value payments – rewards for healthy behaviours – and R2.3 billion in group risk claims.

The R6.85 billion paid to individual life insurance clients constitutes –

• Life cover claims: R3.4 billion
• Living benefit claims: R1.5 billion for the Severe Illness Benefit, R933 million for the Capital Disability Benefit, and R673 million for the Income Continuation Benefit
• Additional benefits: over R260 million for the Global Education Protector, Funeral policies and other benefits.

“In 2024, we paid 99.3% of all claims. Within the remaining 0.7%, 0.4% of claims were repudiated for non-disclosure, 0.2% for misrepresentation, and 0.1% for fraud,” Discovery Life’s head of claims Sylvia Steyn explained. 

“This entrenches our track record of paying claims and supporting our clients when they most need their cover.”

Discovery Life also paid R2.4 billion in shared-value benefits, comprising R1.4 billion in PayBacks and R1 billion in Cash Conversions. 

Shared-value benefits refer to financial rewards based on how well clients manage their health and finances.

“I’m proud to say that 2024 was the first time Cash Conversion payouts reached the one-billion mark in a single year,” Discovery Life Deputy CEO Gareth Friedlander said.

“This is powered by clients’ engagement in Vitality, Discovery’s behaviour-based programme that incentivises healthy living.”

Interestingly, the company found that clients who reached a Gold or Diamond status experienced a 57% lower mortality risk and a 47% lower disability risk compared to clients who were not part of or did not engage in Vitality. 

“This lowered risk creates previously untapped value that we can return to clients to incentivise them to engage in healthy behaviours,” Friedlander said.

This model also meant that the majority of Discovery Life’s payouts were made to clients who are still alive, which is uncommon in the life insurance industry.

Friedlander pointed out that the industry pays about 20% to 30% in living benefits, while Discovery Life is paying out over 60% to clients who are still alive

This means that Discovery Life pays more through living benefits (R3.1 billion) and shared-value rewards (R2.4 billion) than for mortality claims (R3.4 billion). 

Reasons for claims

Discovery Life’s 2024 claims data also showed that cancer was the highest cause of death for women (35%).

It was the most common severe illness for both women and men at 51% and 37%, respectively.

It was also the most common cause of disability among both women and men at 34% and 30%, respectively.

“The Discovery Group invests significantly in encouraging and supporting clients to carry out regular health screening,” Discovery Life chief medical officer Dr Maritha van der Walt said.

The 2024 data shows significant increases in screening for common cancers compared to 2020, with mammograms up 14%, colorectal cancer screening 29% higher, and 19% more prostate exams, all of which are hitting all-time highs.

“Thanks to the increase in screening rates, there has been a 62% increase in early-stage cancer claims compared to 2020’s claims on illness cover,” she said.

“As a proportion of all cancer claims, lower severity claims continue to have an upward trajectory, showing that these cancers continue to be detected earlier.” 

“While Stage 3 and 4 cancers have remained relatively stable over that time, it’s in the disability claims for Stage 4 cancers where we’re seeing incredible benefits of screening, with those claims dropping 16% since last year.”

She said early detection remains key to better outcomes. 

Data from the Discovery Vitality HealthyFutures model and the US-based Surveillance, Epidemiology, and End Results Program (SEER) show that, on average, someone diagnosed with early-stage breast cancer can expect a 96% five-year survival rate. 

SEER also found that men who are diagnosed with localised prostate cancer have a 99% five-year survival rate.

Cancer and heart and artery conditions were prominent in life cover claims for older age groups. 

However, looking at causes of death across all age groups, the 2024 data shows deaths occurred for a number of reasons.

One in five death claims were due to unnatural causes, with the largest component attributed to suicide at a staggering 35%, followed by motor vehicle accidents at 23%.

Van der Walt said the high proportion of unnatural deaths highlights the need for comprehensive life coverage for everyone, irrespective of underlying health status or age. 

“The data also emphasise the importance of taking mental health concerns seriously, as well as fostering a culture of better driving on South African roads,” she said. 

“I’d like to add that the Discovery Health Medical Scheme’s Mental Health Care Programme and Discovery Insure’s Vitality Drive programme actively help to address these issues, respectively.”