Past claims experience is a key rating factor when determining risk premiums, particularly for larger risk arrangements. The Association for Savings and Investment South Africa (ASISA) has revised its recommendations regarding the use of claims experience data.

It published an updated Guideline on Claims Experience for Group Life Insurance on 6 June 2023.

The updated guideline states: “Generally, the period for which past claims experience data is requested is five years. Due to the Covid-19 impact on claims experience between 2020 and 2021, it is recommended that two years’ worth of pre-pandemic claims experience data is added for a more credible view of pre-pandemic base experience excluding a Covid-19 view.”

While more information on specific matters related to a) Group Life Only b) Group Life and Lump Sum Disability and c) Disability Income can be viewed here, the important thing to note is how this change will affect group risk quotations.

Supporting ASISA’s request for insurers to provide additional claims experience data for a more credible view of the pre-pandemic period, Old Mutual will now provide seven years’ worth of past claims data where the group risk arrangement covers more than 400 lives and has been in place for the full duration of this period.  Where cover has been placed for a shorter duration, Old Mutual will provide past claims data for the period that Old Mutual was at risk.

In the same way, Old Mutual will require additional claims data when quoting on potential new business, ensuring that an appropriate and accurate price can be arrived at for the clients.

See the entire revised ASISA Guideline Update here.