Insurance Company Liberty Life has confirmed that its retrenchment cover is no longer open for new business.
"Liberty confirms the temporary suspension of the sale of retrenchment and the shorter-term insurance benefits covering loss of income. Given the uncertainty related to the Covid-19 pandemic, it is very difficult to assess the potential risks and related cover for new clients," said David Jewell, the group executive of retail solutions at Liberty.
He said the insurer's focus right now is on ensuring that it meets all valid claims from current clients and added that existing benefits will remain the same.
Meanwhile old Mutual also said it had chosen to temporarily close its retrenchment cover product so it could determine a fair and reasonable price once the pandemic was factored in.
After much contemplation, the insurer have decided to temporarily close the following benefits to new business and voluntary cover increases as of 7 April 2020 until further notice:
- Retrenchment benefit.
- Disability Income benefit (7-day waiting period).
- Sickness Income benefit (7-day waiting period).
- Temporary Income benefit (7-day waiting period).
- Business Overheads Replacer benefit (7-day waiting period).
Old Mutual Protect:
- Retrenchment cover.
- Disability Income cover (7-day waiting period).
- Business Expenses cover (7-day waiting period).
- Premium Protection - Retrenchment.
Cases that have already been submitted by 6 April 2020 will still be considered.
Old Mutual’s John Kotze explained: “We use past experience to determine a fair and reasonable price for that cover. Going forward, we have no idea what the reasonable experience is that we will encounter as a result of COVID-19.”
Kotze said they were expecting an increase in retrenchment cover claims.
“It’s going to be interesting to see what does emerge of the course of the next weeks and months, and once we have a sense of that that will provide us with an opportunity to reopen that product at a new fair and reasonable price,” he said.
However,Old Mutual added that as a responsible business, they will continue to support the fight against Covid-19 in as many ways as they can.