Sanlam reports spike in death claims amid Covid-19 pandemic

South African insurance giant Sanlam has reported a significant spike in death claims amidst the ongoing Covid-19 pandemic. The group announced that it had paid approximately R10 billion in gross mortality claims in the first half of this year, bringing the total since the pandemic broke out to a staggering R22 billion. The increase in death claims was particularly noticeable between July and August this year, with the trend expected to continue for the remainder of the year. Paul Hanratty, Sanlam Group CEO, provided insights into the challenges faced by the company in dealing with the surge in claims, as well as the strategies being implemented to navigate through these trying times. Amidst the financial implications of the rising death toll, Hanratty discussed key initiatives, including a shift towards digital channels and collaborations with telecom giant MTN to drive growth in the future. Sanlam's performance during the reporting period showcased substantial growth in new business volumes, with a 12% increase, and a remarkable surge in life insurance premiums by over 50%. The company attributed this success to a combination of dedicated staff, technological advancements, and a reputation for reliability and stability in the market. However, the looming challenges posed by the pandemic necessitate a reevaluation of the insurance model and pricing strategies. Hanratty emphasized the need for industry-wide adaptations to address the long-term impacts of Covid-19 on mortality rates and insurance practices. He highlighted the significance of maintaining strong reserves to weather the storm and hinted at potential shifts in underwriting practices, product designs, and pricing mechanisms. The CEO also addressed the evolving landscape of business continuity, acknowledging the limitations of insurability for events like pandemics. As a result, market rates are anticipated to rise, reflecting the heightened risks faced by insurers and reinsurers globally. In the face of these challenges, Sanlam remains committed to strategic investments, such as increasing its shareholding in Saham, to fortify its position in the African market and reallocate capital effectively. The road ahead for Sanlam and the insurance industry at large remains uncertain, with the need for resilience, innovation, and adaptability more critical than ever.