23rd Nov 2021 06:02
(Alliance News) - Old Mutual Ltd said on Tuesday its profit had taken a hit well in excess of ZAR6 billion as a result of claims related to Covid-19 deaths.
The Cape Town-based financial services firm said in an operating update for the nine months ended September 30 that its life businesses had experienced worse mortality claims than anticipated.
This, it said, has resulted in the "excess deaths impact on profit of about ZAR6.6 billion for year to date".
In order to partially offset the excess deaths impact on profit for the year to date, ZAR4.9 billion of the pandemic provision was released.
Taking into account the release of the provision, there is approximately ZAR1 billion of the pandemic provision remaining for expected excess mortality claims related to Covid-19.
Old Mutual said it continued to closely monitor its mortality claims experience as future waves and their impacts remain uncertain.
In its operating update, the financial services group also reported 7% growth in gross written premiums to ZAR15.10 billion for nine months to September from ZAR14.09 billion in the prior year. This was supported by growth experienced across all lines of business, except for the commercial and agricultural portfolio in Old Mutual Insure.
For the same period, loans and advances declined by 10% to ZAR18.19 billion from ZAR20.32 billion previously, driven by the drop in disbursements due to tightening of credit criteria in the prior year.
Funds under management rose by 9% to ZAR1.20 trillion from ZAR1.10 trillion.
By Artwell Dlamini; [email protected]
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