Health whispers, until one day it screams

07 Aug 2020

Sinenhlanhla Nzama

Investec Life Head Product Actuary

Covid-19 has made us keenly conscious of the risks of a pandemic and what kind of insurance protection we need. But Investec Life’s research shows that we’re still not sufficiently aware of the many other health risks that might threaten our ability to earn a living.

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There’s a been a lot of media attention lately on the kinds of insurance claims that have been triggered by Covid-19 – credit life policies, trade credit insurance, business interruption cover – they all exist to help mitigate the significant financial losses that arise because of events outside of our control. Some insurers are winning the trust of their clients while others are losing it altogether. But if Covid-19 has taught us anything, it’s that fat tail risks (the chance of loss because of a rare event) can and do happen and that having some sort of protection against them can mean the difference between staying afloat or going under.
And here’s where our risk perception gets skewed.
Because Covid-19 has been so visible, we’re suddenly hyper-attuned to a pandemic-level threat, while potentially underestimating the devastating effects of other personal health risks like cancer, diabetes, stroke and heart disease.
A pandemic can most certainly interrupt the ability to generate an income, but so can other statistically likely causes of severe illness and disability, and it remains an area where many people are chronically underinsured.
This is particularly true of South Africa, which has been ranked “dead last” in global health according to the 2019 Indigo Wellbeing Index. The index tracks national health indicators based on metrics like blood pressure, blood glucose, obesity, depression, alcohol and tobacco use, exercise and how much governments spend on healthcare. Covid-19 may be wreaking havoc on the public healthcare system but this is in part because the virus is capitalising on our existing co-morbidities, which are dangerous in and of themselves.
 
In South Africa, the leading causes of the 395 000 natural deaths in 2017 were noncommunicable diseases such as diabetes, heart disease and hypertension (mostly lifestyle related) at 25.9%, while infectious diseases (tuberculosis, HIV/Aids, influenza, pneumonia and other viral diseases) accounted for 20.6%.
 
Covid-19, by comparison, is nowhere close to the top 10 causes of natural deaths nationally. There are some obvious comparison limitations: not all Covid-19 deaths seem to be officially accounted for, there are testing limitations and backlogs, and we lack a true epidemiological understanding of how the virus affects us long term. South Africa is also just starting to enter its peak period while an effective vaccine is still months away. 
Over 25%
of natural deaths in 2017 resulted from noncommunicable diseases such as diabetes, heart disease and hypertension
My point is not to minimise Covid-19, but rather to place it in the context of South Africa’s many other causes of death. Just because the risk of Covid-19 is global doesn’t mean it’s more pervasive or more of a threat than the 20% of South Africans who are expected to develop cancer before they’re 75 years old.
 
Why are we willing to mitigate one risk by wearing a mask to the supermarket, but will happily drive home after too many glasses of wine (forbidden as it is) when globally more people die as a result of road traffic injuries than from HIV/Aids and tuberculosis combined?
 
It comes down to what’s in front of us. Investec Life’s research consistently affirms that health is invisible, until it isn’t. Unless we’ve experienced an illness or disability personally, or know of someone who has, we seem to live under the illusion that we’re invulnerable. Yet the risk of a serious injury, critical illness, or lifelong incapacitation is always with us. We just don’t see it because it’s not in the headlines as much. 
 
There have been a number of macro-incidents over the last decade that should teach us about uncertainty, tail risk and importance of having proper insurance in place: the 2008 Financial Crisis, a Trump presidency, Brexit and now Covid-19. The same logic applies to our health: we feel fine, until we don’t. Or to put it another way, health whispers to us constantly, then one day it screams. 
20%
of South Africans are expected to develop cancer before they’re 75 years old

Investec Life Limited is an authorised Financial Services Provider 47702.