The global life insurance industry was hit with reported claims due to Covid-19 of $5.5bn in the first nine months of 2021. Picture: 123RF/CONVISUM
resolved 89% of the claims received, and the last remaining claims are in the final stages of calculation or are in the indemnity period, which is still in progress. The insurance industry is at a critical juncture as we wrestle with what the increase in cybercrime means for existing policies. While commercial customers are keen on a product with specific provisions for attacks related to cyberlosses, the global trend is that fewer insurance companies are offering policies against cybercrime, saying it simply encourages such behaviour.
Another concern that has become critical to manage is the plausible risk of grid failure, which accelerated in 2021. We have become accustomed to load-shedding in winter, but the grid has proved volatile year round, with power insecurity prevailing throughout summer. The implications of grid failure would be catastrophic. One need only think back to 2004, when parts of the US experienced grid failure, and how 20-million to 30-million people were left without electricity for two to three days.
From an insurance claims point of view, the industry has experienced benign figures compared with 2020. This may seem surprising in light of the looting claims and Sasria payouts of more than R32bn, but our role was to support Sasria and most policies had exclusions in place.
Another positive trend, in the individual insurance market, is that lockdowns have reduced motor claims, while the uptick in economic activity has driven more people to get insurance cover. The effect of continued lockdowns is likely to be neutral if not slightly positive on the individual insurance market due to lower claims.