S.Africa’s Old Mutual pays out $193 mln in COVID-19 death claims in Q1

PUBLISHED: Fri, 21 May 2021 09:27:49 GMT
Emma Rumney
Signage sits on display outside the offices of Old Mutual Ltd. bank in Johannesburg, South Africa, on Wednesday, Sept. 23, 2020. South Africas biggest lenders were faced with the pressing need to raise provisions to protect against souring loans, while demand for credit slumped as the coronavirus lockdown took a toll on business customers. Photographer: Waldo Swiegers/Bloomberg via Getty Images

JOHANNESBURG, May 21 (Reuters) – South African insurer Old Mutual paid out 2.7 billion rand ($193 million) worth of COVID-19 related death claims in the first quarter, it said on Friday, leaving about 1.3 billion rand in reserves set aside to help it manage the pandemic.

The numbers reflect the impact of a severe second wave of infections, but South Africa’s curbs are at their lowest level as it once again faces a spurt in cases, fanning fears of a third wave as the colder months of winter approach.

“We continue to closely monitor our claims experience as future waves and their impacts remain uncertain,” Old Mutual said in a trading update.

But the firm was confident its balance sheet and liquidity position could withstand future pandemic impacts, it added.

The update did not give an earnings forecast, but the firm said its measure of operating profit was up 48% in the three months to March 31, at 1.8 billion rand.

This was due to factors such as benefits from a stronger performance in the local equity market, fewer bad debts and cost control, it said, adding that it was on track to deliver its cost-saving target of 750 million by the end of 2022. ($1=13.9941 rand)

(Reporting by Emma Rumney)

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