Old Mutual spends R13bn on Covid-19 mortality claims

Oliver Kazunga, Senior Business Reporter
FINANCIAL services group, Old Mutual, says last year it spent an estimated R13 billion settling fast-tracked mortality claims coming on the background of the Covid-19 pandemic.

Thousands of people have succumbed to the disease in Zimbabwe, across the region and the world since first December 2019.

In a statement accompanying the group’s financial results for the year ended December 2020, Old Mutual said the year was one of the most challenging.

“During 2020 we supported customers and their families through fast- tracked payment of approximately R13 billion in mortality claims during the year,” it said.

As part of its ongoing relief initiatives to customers, the group said it also made interim payments in respect of business interruption claims to qualifying Small to Medium Enterprises (SMEs) customers, to enable them to continue operating.

The institution said during the period under review, it offered various financial support initiatives to provide relief to customers, intermediaries, communities and employees.

“We have extended premium free cover to frontline healthcare workers in South Africa, Malawi and Zimbabwe.

“In many of our operations across the continent, we donated medical supplies, protective equipment and funding to frontline health care workers and regional hospitals.”

Despite the impact on earnings, strong gross inflows throughout the year demonstrated the resilience of the business.

“We have experienced good recovery in advisor productivity levels and new business sales volumes in the second half of the year following very low levels in the second quarter at the height of lockdown restrictions in South Africa,” said the group.

“Lockdown restrictions had a material impact on our ability to interact face-to-face with our customers, particularly during the second quarter.”

During the year under review, Old Mutual said digital offerings to enhance customer experience, that were already in development as part of the group’s vision to build a leading African digital platform, business were accelerated and rolled out.

This, it said, will enable the group to meet customer needs remotely.

In South Africa, Old Mutual introduced alternative direct digital channels such as electronic mails and WhatsApp platforms to pay funeral claims and facilitate disinvestments.

“Take up rates of the above channels have accelerated significantly in the fourth quarter with strong traction in 2021,” it said.

The group’s adjusted headline earnings per share decreased 74 percent to 54,3 cents per share, while adjusted headline earnings of R2,5 billion were down 75 percent in 2019, impacted further by lower shareholder investment returns and Nedbank earnings.

Results from operations were resilient on a pre-Covid basis at R7,7 billion, reflecting a 14 percent decrease on the 2019 figures. The financial institution declared a dividend of 35 cents per share.

Old Mutual’s primary operations are in South Africa and the rest of Africa.

The group also has a niche business in China. — @okazunga.