The Growth Of Critical Illness Insurance From 1984-1994

By: Mike Armstrong
Critical illness cover first made its appearance in South Africa during the year 1984. At that time critical illness cover was a merely raw product. The insurance market had yet to propagate the product and people did not know about it. As time passed by, critical illness cover became an important type of insurance policy as sales started to be considerable. At first few critical illness conditions were covered. But gradually insurers started to add more to the policies so that they could compete effectively in the market. So, let’s have a look at how critical illness cover evolved from 1984-1994.

Additionally the critical illness claims had been researched. As far as women are concerned, the critical illness claims concerning women had also been recorded. Around 9 claims may have been made by women aged 20-24, 28 aged 25-29, 37 aged 30-34 and 51 aged 35-39. So far, if compared to men, women might have made less critical illness claims. The claimed values continue as follows. Approximately 57 critical illness claims could have been made by women aged 40-44 followed by 39 aged 45-49, 19 aged 50-54 and finally 9 aged 55-59. If the results are looked at carefully, one could notice that the critical illness claims have been decreasing down the years.

Moreover, the claim experience among people of different ages had also been researched by the Continuous Statistical Committee: Dread Disease Investigation 1991-1994.

The results that would be demonstrated had been taken between the years 1991 to 1994. Around 19 claims had been made by men aged 20-24, 50 aged 25-29 and 92 aged 30-34. More critical illness claims may have been more likely made by men. About 151 critical illness claims could have been made by men aged 35-39, 207 aged 40-44, 168 aged 45-49, 129 aged 50-54 and finally 54 aged 55-59.

Only three companies may have participated in the research carried out as seen above. Their total number of critical illness claims may have been around 880 from 1991 to 1994. It was therefore difficult to analyse the critical illness claims by cause or even smoker status. The actual critical illness claims for men may be around 70 percent in the first policy year compared to the claim ratio of policies older than a year. The same thing may also apply for women.

Furthermore, according to Munich Re, 2001, in the year 1984, 53 percent of people may have suffered from a critical illness like heart attack followed by 8 percent for coronary artery bypass. Additionally, around 10 percent of people may have also suffered from a critical illness such as renal failure or stroke while 29 percent may have contracted a critical illness like cancer. In the year 1994, a relative decrease in heart attack patients may have been recorded. Around 39 percent of people may have contracted heart attack whilst 9 percent may have suffered from coronary artery bypass. An additional 5 percent may have been patients of renal failure and stroke followed by 12 percent for other critical illness conditions and finally 37 percent may have been victims of a critical illness like cancer. In these ten years, the rate of heart attacks had decreased while the rate of cancer had increased.

As seen, critical illness cover in South Africa soon developed into a mature market. Appropriate claims data could have been obtained so that incidence rates could be analysed. This may have then enabled known firms to predict the trend in the future. Nowadays, the critical illness claims data may be much complex and accurate as more incidence rates may have occurred.

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