Johannesburg – Old Mutual said its sales and earnings recovered in the six months to June 30, notwithstanding a R2-billion additional provision for Covid-19 related mortality claims.
The life assurance and financial services group said in a trading statement yesterday that mortality claims paid relating to Covid-19 in the group’s life businesses for the six months to June 2021 had been more than anticipated, and were driving negative Net Client Cash Flows.
However, this was offset by inflows in the Asset Management and Wealth businesses.
“Our mortality experience has been worse than anticipated, with impact on profits mitigated by a partial release of provisions raised at the end of 2020.”
The group’s Covid-19 provisions were increased by R2-billion as at June 30, 2021, to take into account emerging expectations of wave 3 and 4 as well as potential future waves.
Old Mutual’s adjusted headline earnings a share were expected to increase by between 65% and 75% to 61.6 cents and 65.3 cents per share, from 37.3 cents at the same time last year. The interim results will be released on August 31, 2021.
It said productivity levels in its South African retail segments, Mass and Foundation Cluster and Personal Finance, had materially improved in the first half.
“There has been a strong customer take-up in the Old Mutual Protect proposition, which has seen rapid growth supporting the recovery in risk sales.”
