We  were wondering recently about the impact that COVID has had on claims within the life assurance sector, and so we decided to do a bit of investigation by examining Irish Life’s (the leading provider of protection products in Ireland) claims data for 2020. While we have written in previous years about claims data, we were particularly eager to see the data for 2020, in order to see the impact that COVID had on the figures. There were 2 main headlines for us in the numbers,

1. There was a reduction in the numbers of claims notified & paid during 2020 vs 2019.  
2. COVID related death claims accounted for 4% of Irish Life’s death claims paid in 2020.

A reduction in claims overall

This is probably not too surprising, as the day-to-day activity in Ireland was so seriously curtailed in 2020 with two periods of very strict lockdown in the spring and autumn. There were less people out and about, less traffic on the roads and less workplace accidents etc. Claims fell overall by approx. 20%, with the number of death claims down from 2002 in 2019 to 1691 in 2020. Likewise the number of Specified Illness Cover (SIC) claims fell from 919 claims in 2019 to 701 claims in 2020.

This reduction was not as a result of a more aggressive approach taken by Irish Life, who accepted 98.5% of all death claims and 89.8% of all SIC claims. To give you a sense of how these number translate into euros, Irish Life in 2020 paid out €83,422… on average every hour of the year! This adds up to total claims for the year of €166.8 million.

Many people associate the claims from companies such as Irish Life only with life assurance on death. In fact in 2020, 51% of claims were for living benefits, improving hugely the quality of life of people who had got sick and survived.

Other interesting facts are that cancers are still the number one cause of claims, and these are largely as a result of a sudden diagnosis. The average term on policies on which claims occurred was 18 years, with 3 claims on policies taken out in 1967, over 50 years ago!

What about COVID-19?

COVID wreaked havoc on all of our lives in 2020, and we can see the impacts in the claims data too. There were 68 COVID-19 related death claims (4%) in 2020 with an average claim amount paid of €48,000. The median age was 73 and most had a pre-existing medical condition - typically cancer, heart disease, diabetes, respiratory illnesses, high blood pressure and dementia. 8 claims were paid to lives under age 50. The earliest death from COVID was in late March 2020 and Irish Life also paid a small number of income protection and rider benefit claims due to COVID, including those with ‘Long COVID’ symptoms.

So in summary, COVID-19 obviously figured quite prominently in Irish Life’s claims data in 2020. However the positive finding in the data for 2020 is that the number of claims overall fell quite significantly, even with such a high proportion (98.5% of Death and 89.8% of SIC) claims being paid. 

As with all areas of your personal finances, it is really important to review your protection requirements, particularly if your circumstances change in relation to your family, your career or your financial situation. We will happily help you review your situation and ensure that you have the right level of financial protection in place to safeguard the future of you and your family.

OK we admit – this may not sound like the most exciting topic in the world, but it just might make a significant difference to your financial future…

There is a surprisingly large amount of money sitting unclaimed in pension schemes in Ireland, the estimated amount of this ranges anywhere between €500million and €1billion. This money is owned by the beneficiaries – most likely ex-employees. An important point to remember about this is that all of this money is held in trust and completely separate to the assets of the employer. So even if the company is no longer in existence, the money is still sitting there, somewhere, waiting to be claimed by its owner – the ex-employee.

Some people dismiss this as not worth the hassle. However time and compound interest do wonderful things to pensions funds. Let’s assume for a minute that you left your first employer at age 30 and left behind your pension fund with €10,000 in it. The company is gone, you’ve no idea where to start looking for the money and don’t think it’s worth the hassle. However if the fund grows on average by 5% p.a. and you retire at age 68, it will then be worth almost €64,000. Now that is definitely worth chasing! The benefits may be even more valuable if they were built up in a Defined Benefit pension scheme.

A frustration for many people is that it is not always easy to find and claim old pension scheme benefits. Your old employer from 20/30 years ago may no longer be in existence, and you may not know who the pension scheme administrators were. Quite often, people have simply binned any correspondence that they got over the years. This can turn out to be an expensive mistake. 

Unlike other countries, unfortunately in Ireland there is no central register of old pension schemes that you can access and find the necessary information. For example, the UK has a pension tracing service for the £20bn in unclaimed pensions there. This lack of a central service has been raised in the Dáil over the years, but to no avail. So what should you do if your old employer is no longer in existence?

Keep paperwork

This is a really important step. Retain any scheme benefit statements that you get for your pension scheme and retain contact details of the scheme administrators. Remember when you move house etc. to keep them updated of your changed contact details. Also if you change your name when you get married, it makes sense to get them to update their records.

Talk to old colleagues

Very often you will find that a slightly older ex-colleague may well have faced this exact same situation themselves in the recent past. Reach out to them – they just might be able to save you a whole heap of work by passing on the details of the pensions scheme administrator.  

Contact The Pensions Authority

If all else fails, contact The Pensions Authority who regulate most of the pension schemes in Ireland. They just might be able to help you track down the administrators of your old scheme.

As mentioned earlier it is usually well worth the hassle of looking. These funds often have been sitting invested for a very long period of time, growing over the years. As Albert Einstein once said, “Compound interest is the eighth wonder of the world”. This could be the catalyst for adding very nicely to your available funds when you reach retirement.