Group risk insurance — as part of a suite of comprehensive employee benefits — is often treated as a commodity or even described as a grudge purchase on annual procurement plans.
These views overlook its critical function in a country like SA, where group insurance provides the most inclusive safety net, protecting millions of households when disaster strikes. But the system fulfils its purpose only if it works quickly and consistently.
Role of group risk cover
Behind every policy sits a breadwinner like Lwandile Sigudu — one of 13-million employed South Africans who supports on average four or more dependents.
When tragedy occurs, entire households and extended families are placed at risk of financial collapse. Group risk insurance is designed to prevent that: it protects families, preserves dignity, and sustains the broader social system.
That is far more than a commodity.
Group cover also delivers economies of scale. Pooled schemes and proof-free limits mean lower expense ratios than retail. For many lower-income earners — who face an insurance gap of up to 96%* — this is the only cover they will ever have.
But unless the system works faster and simpler, families will continue to face unnecessary hardship.
Claims realities: what the data shows
The 2025 Sanlam Benchmark research, based on over 30,000 mortality claims across six years, reveals a sobering picture. Funeral and unapproved death claims now take more than twice as long to finalise as a few years ago.
This is not just a delay in paperwork, it is a delay in closure and survival for families like Lwandile’s.
Three forces drive these delays:
- Incomplete submissions: Only 1% of death claims are submitted with all documents upfront and nearly 20% require multiple follow-ups, stretching timelines by up to 35%.
- Estate payments: Group life claims paid into estates have doubled. These take 4.5 times longer than those paid to nominated beneficiaries.
- Multiple beneficiaries: More than half of unapproved claims involve two or more beneficiaries, and nearly a fifth involve four or more. Each additional beneficiary adds verification, documentation, and time.
Regulation is essential but it must be matched by efficiency, so families are not left waiting.
The case for standardisation
Most roads lead to one fixable issue: beneficiary nomination forms (BNFs). Missing or inconsistent BNFs are the single biggest cause of delays, leaving households without critical funds. The answer lies in industry-wide standardisation.
Where simplified forms and education have been introduced, BNF completion rates already approach 100% and payout times are cut by up to a third. Standardising once could make this the norm.
Beyond price: efficiency in design
Group risk insurance benefits work best as long-term partnerships, not transactional swaps. They are the most inclusive cover in our market, where cross-subsidies actively favour vulnerable groups. When integrated with healthcare, retirement, and wellness benefits, they safeguard futures, not just claims.
Treating group risk cover as a commodity fuels a procurement roller-coaster that destabilises underwriting and weakens service delivery.
True efficiency comes from long-term stability: sustainable pricing, continuity of cover, meaningful proof-free limits, and administration systems that reduce duplication rather than multiply it.
It also means designing benefits that reflect claim trends. Cancer, for instance, now accounts for 20% of disability income claims and over half of severe illness claims. Sanlam’s Impact Range cancer-only cover pays 100% at all stages for specified aggressive cancers.
Efficiency here is about ensuring cover is relevant and effective when families need it most, backed by expertise to manage complex conditions and recurring claims.
Practical interventions
As an industry, insurers cannot afford to stand still. Sanlam Corporate is taking steps to close knowledge gaps and improve claims efficiency.
Stronger together
There is a proverb that says when elephants fight, it is the grass that suffers. In the insurance industry, the “grass” is the breadwinner’s family left waiting while inefficiencies delay payment.
Insurers, consultants, employers, and trustees share a responsibility to make group risk cover work better. That means standardising critical forms, educating members practically, pricing for sustainability, evolving products to today’s health profile, and balancing compliance with compassion.
Group risk insurance is not a commodity, but a confidence infrastructure: the dignity of a funeral held on time, the stability of an income after disability, and peace of mind from knowing your cover is relevant and reliable.
If insurers unite around efficiency — especially through standardisation — they will protect families today, while strengthening retirement provision and social stability for tomorrow.
• About the authors: San-Marié Crause and Reiner van Gijsen are Sanlam Corporate’s managing executive for Group Risk and the head of Pricing and Governance for Group Risk, respectively.
This article was sponsored by Sanlam Corporate.
*2022 Asisa Insurance Gap Study 2022, conducted by True South Acruaties & Consultants.
