Lockdown retrenchments increase six-fold as Covid-19 lockdowns bite

Between August and October last year, Liberty was processing more than 60 retrenchment claims a month.

Between August and October last year, insurer Liberty was processing more than 60 retrenchment claims a month.
Between August and October last year, insurer Liberty was processing more than 60 retrenchment claims a month.
Image: MIKE HUTCHINGS/REUTERS

In early 2020, insurance group Liberty was processing about 10 retrenchment claims a month. But five months after Covid-19 struck, that number increased six-fold.

Liberty’s retrenchment claim statistics for 2020, released on Wednesday, give an indication of just how many people lost their jobs in the formal sector as a result of Covid-19. Between August and October last year, the insurer was processing more than 60 retrenchment claims a month.

Its clients, mostly middle to high income earners, were considered to be less susceptible to job losses.

“This trend was expected, given the harsh realities and subsequent affect on jobs because of the pandemic,” said Kresantha Pillay, head of Liberty's flagship Lifestyle Protector product.

The most affected regions were Gauteng, the Western Cape and KwaZulu-Natal.

The insurer also had a 200% spike in death claims from the beginning of hard lockdown in April 2020 — three times above “normal” levels.

The claim statistics reflect only the effects of the first wave of Covid-19 in the middle of the year, Pillay said.

More than R500m was paid out by Liberty to cover confirmed Covid-related death and health-related claims, with death being the leading cause. Unsurprisingly, Covid-19 related funeral claims peaked during the first wave, with most claims coming from the Eastern Cape, Gauteng and the Free State. But the company said it probably paid out more than R575m in Covid-related claims, given that some Covid-19 deaths were recorded as natural causes.

It’s become apparent that some of those who survived the coronavirus are not able to return to their former level of functioning and require ongoing healthcare, Liberty said.

Psychiatrist Dr Ingrid Williamson said that the long-term effects of Covid-19 were being recognised as a growing problem. A series of published studies showed that 34% of patients were diagnosed with neurological or psychiatric symptoms within six months of their acute infection, of which 12.8% were diagnosed for the first time with such a disorder — mostly depression and anxiety, she said.

“Due to the debilitating nature of this disease, specific psychiatric disorders post Covid-19 symptoms such as depression, anxiety, PTSD, dementia and psychosis have been a real phenomenon, and this has an affect on the wellbeing of a lot of people.

“Life and disability cover benefits therefore become very important.”

Despite the dire affect of the pandemic, death and impairment by cancer and leukaemia topped the list of claims, as in the previous year, comprising 27%. This was followed by cardiac and cardio-vascular-related causes, which made up 20% of all claims.

Retrenchment, trauma and stroke comprised 9%, 7% and 6% of claims respectively.

Liberty's statistics show that in terms of cancer, prostate cancer is still the leading cause of claims among men, while for women, it’s breast cancer.

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