Old Mutual's new unvaxxed customers to be charged higher rates. Current customers off the hook - for now

Business Insider SA
    Old Mutual Office, No1 Mutual Place, Sandton, Johannesburg (Old Mutual)
    • Old Mutual will not be charging its unvaccinated current customers higher premiums.
    • But it has not ruled out charging them higher premiums in future.
    • Vaccinations will be taking into account when signing up new customers.
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    Old Mutual will not be charging its unvaccinated current customers higher premiums – for now.

    The life insurance group, said this following it announcing a few weeks ago that it would "offer differentiated pricing" to new customers, depending on their Covid-19 vaccination status.

    This announcement, however, led to confusion regarding its position on its current customers, as it led some on social media to believe that it would increase premiums on insurance products it has already sold to customers who have not been vaccinated.

    Old Mutual has nevertheless not ruled out such a move.

    "We are not making changes to existing customers premiums, although this may change in future," says Old Mutual GM of Protection Solutions, Kavir Ramjee.

    The group says that offering different prices depending on vaccination status should not be seen as unusual, as such practice has long been part of how it conducts business.

    "We will assess each customer's risk against a cross-section of relevant factors including age and the presence of co-morbidities," says Ramjee.

    "In the same way that non-smokers should not have to cross-subsidise the insurance premiums of smokers, we believe the same principle should apply to vaccinated customers, who should not have to cross-subsidise their unvaccinated counterparts," he adds.

    Though existing customers will not be evaluated on whether they are vaccinated, new customers will have to declare their vaccination status, age and possible presence of other co-morbidities, effective from 18 November 2021.

    Old Mutual did not specify by how much more they will charge unvaccinated customers, it did say there will be no fixed percentages when it comes to what it charges these customers.

    "For example, a 20-year-old unvaccinated individual will be assessed differently to a 60-year-old unvaccinated individual, depending on their risk profile."

    The group says customers who subsequently get vaccinated after buying an Old Mutual insurance product can have their status changed.

    "In the event that a customer subsequently vaccinates and provides evidence to us, via their Electronic Vaccination Data System (EVDS) number, the loading related to vaccination status will be removed."

    News that Old Mutual will be applying what it calls differentiated pricing follows the insurance sector seeing a sharp increase in deaths resulting from the Covid-19 pandemic.

    Old Mutual, for example, set aside mortality reserves of R1,57 billion to cover anticipated excess deaths in 2020 and 2021. For its part, Capitec's insurance division saw the number of death claims almost double from 1,839 in August 2020 to 3,609 in November 2020. 

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