Johannesburg – JSE-Listed financial services group Liberty Holdings yesterday reported a spike in mortality claims and announced plans to assess its pandemic reserve at the end of next month on the possibility of a third wave of Covid-19.
Liberty, with subsidiaries including Stanlib, Liberty Life and Liberty Two Degrees, flagged that significant uncertainty related to the evolution and impact of the pandemic.
“The reserve will be assessed at June 30, 2021, taking account of the possibility of further waves and other developments relating to the pandemic,” the group said in its operational update for the quarter to the end of March.
The group established the R3 billion pandemic reserve a year ago as a means of assuring clients that Covid-19 claims and costs, which could arise in future, would be adequately covered. Liberty said mortality claims had surged during the first quarter, while persistently had not yet worsened, as anticipated when the pandemic reserve was reassessed at the end of December last year.
Liberty said the pandemic reserve had so far been used only to absorb the relevant risk experiences across SA Retail, Liberty Corporate and Liberty Africa.
“However, Liberty Corporate profitability in the current period has been adversely affected by the elevated risk claims exceeding the pandemic reserve set up for this business, given the IFRS accounting treatment of short contract boundary business,” said the group.
