Johannesburg - Policy lapse rates at Discovery Health Medical Scheme, a unit of JSE-listed Discovery Holdings [JSE:DSY]
, remained low during the year to June, with 98% of members remaining on the same plan or upgrading.
Lapsed rates apply to policies that have not been renewed or cancelled during the policy year.
Adrian Gore, CEO of SA's biggest health insurer Discovery, said lapse rates were at around 3.9% during the period as the division continued to provide the best-in-industry products and services to clients with payment arrangements that facilitated maximum access.
"The lapse rate was remarkably low during the financial year, and not many companies in the world have this low lapse rate," Gore told a gathering of analysts and journalists in Johannesburg.
"Our members have been holding on to their benefits despite the current economic pressures."
Discovery Health's low lapse rate means the company is doing something good - insurance policies are often among the first casualties when households or individuals lose jobs or are forced to start reassessing their budgets when economic pressure bites.
This is in view of the fact that health insurance is viewed as a grudge purchase by many individuals and households.
Since the onset of the global economic downturn in 2007, most health and life insurers have had to grapple with increasing lapse rates.
Liberty, the fourth-biggest life insurer in SA, is among the local companies that have had to wrestle with this in the past few years.
Discovery Health’s normalised operating profits for the period surged 10% to R1.5bn. Gore added this division remained acutely aware of its responsibility to contribute to a sustainable national healthcare system involving both the public and the private sector.
"This division continues to engage with national and provincial health departments in support of the emerging national health insurance," Gore said.