By San-Marié Crause, Managing Executive for Group Risk at Sanlam Corporate and Reiner van Gijsen, Head: Pricing and Governance, Sanlam Corporate: Group Risk
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 ours, where group insurance provides the most inclusive safety net, protecting millions of households when tragedy strikes. But the system only fulfils its purpose if it works quickly and consistently.
The role of group risk
Behind every policy sits a breadwinner like Lwandile, one of 13 million employed South Africans who supports four or more dependents on average. When tragedy strikes, whether through death, disability or serious illness; entire households and extended families are placed at risk of financial collapse. Group risk insurance is designed to help avoid this: 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 i.e. it is cheaper because of the number of lives covered. For many lower-income earners – who face an insurance gap of up to 96% (True South Insurance Gap Study 2022) – this is the only protection they will ever have. But unless the system works faster and simpler, families will continue to face unnecessary hardship. Claims are now taking twice as long to process as before – a delay that costs families dignity and survival.
Claims realities: What the data shows
The 2025 Sanlam Benchmark study, based on more than 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 than 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 claims are submitted with all documents upfront; 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; 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:
- A single BNF, in plain language and in all official languages, portable across insurers.
- Common data fields so records are compatible.
- One-touch claims processes with embedded verification.
- Shared benchmarks across providers.
Where simplified forms and education have been introduced, BNF completion rates already approach 100% and payout times have dropped by up to a third. Standardising once could make this the norm.
Beyond price: efficiency in design
Group risk benefits work best as long-term partnerships, not transactional swaps. They are the most inclusive form of insurance 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 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, we cannot afford to stand still. Practical steps are being taken to close knowledge gaps and improve claims efficiency:
- Education that drives outcomes: Group risk is among the least-understood benefits. But when members are engaged in their own language, whether during shift changes or while waiting in salary queues, completion of nomination forms improves dramatically, and claims are processed much faster.
- Standardisation: Shared BNFs across insurers will simplify processes and reduce rework.
- One-touch processing: AI-assisted claims handling, embedded verification, and live dashboards are already making claims faster and more transparent.
- Product evolution: With cancer now responsible for a large share of disability and severe illness claims, tailored benefits like cancer-only cover are being introduced to meet real needs.
Stronger together
There is a proverb: when elephants fight, it is the grass that suffers. In our industry, the “grass” is the breadwinner’s family left waiting while inefficiencies delay payment. As insurers, consultants, employers, and trustees, we all share the responsibility to make group risk work better. That means standardising critical forms, educating members practically, pricing for sustainability, evolving products to today’s health needs, and balancing compliance with compassion.
Group risk is not a commodity. It is confidence infrastructure: the dignity of a funeral held on time, the stability of an income after disability and the peace of mind from knowing your cover is relevant and reliable. If we unite around efficiency – especially through standardisation – we will protect families today, while strengthening retirement provision and social stability for tomorrow.