S.Africa’s Old Mutual says too early to say if more COVID-19 provisions needed

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In the first quarter, South Africa’s second largest insurance firm paid out 2.7 billion rand ($189.5 million) worth of COVID-19 related death claims, leaving about 1.3 billion rand in reserves set aside to help it manage the pandemic.

Old Mutual had increased its short-term provisions by almost 4 billion rand in the December 2020 period as claims outstripped the funds it set aside in the first half amid a second, more severe wave of COVID-19 in South Africa.

On Wednesday it said the reserve will be assessed at June 30 2021, taking into account the possibility of further waves and other developments relating to the pandemic.

“Our claims experience is in line with expected claims levels assumed in the December 2020 pandemic reserve, set up for the anticipated impacts of COVID-19 in 2021,” the company said.

Old Mutual said its measure of operating profit was up 52% in the five months to May 31, at 2.6 billion rand.

($1 = 14.2504 rand)