Life insurers

Life insurers report big spike in fraudulent death claims

Industry body says more than a billion rand’s worth of claims were rejected in 2017

12 December 2018 - 18:21 By Devlin Brown

Life insurers rejected R1.13bn worth of “fraudulent and dishonest claims” in 2017, with dishonest death claims more than doubling in value from 2016, according to the industry body representing insurers in SA.
In November, Momentum came under immense public scrutiny for rejecting a life policy payout to the widow of hijack victim Nathan Ganas. The insurer said that Ganas, who was shot dead in a hijacking at his home, had failed to disclose high blood sugar and because of the non-disclosure would reject the claim. A public outcry forced Momentum to create a new product that would compensate qualifying victims of violent crime.

A total of 316 claims were rejected in 2017 for non-disclosure or misrepresentation, the Association for Savings and Investment SA (Asisa) has revealed. Asisa represents the majority of SA’s asset managers, collective investment scheme management companies, linked investment service providers, multi-managers, and life insurance companies.
The industry body said that while the number of actual fraudulent cases more than halved from 13,488 rejected claims in 2016, the actual value increased from R1.03bn to R1.13bn.
While the value of rejected, or thwarted, fraudulent and dishonest claims surpassed a billion rand, Donovan Herman, convener of Asisa’s claims standing committee, said that rejected claims accounted for only 0.24% of the total amount paid out. In 2017, life insurers made benefit payments to the tune of R469bn...

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