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Old Mutual pays out R13bn on death claims

Old Mutual

Business Writer 

A PREMIUM African financial services group, Old Mutual, says last year it spent an estimated R13 billion settling fast-tracked mortality claims.  

In light of the Covid-19 pandemic, a number of people have succumbed to the disease that was first detected in China in December 2019 before spreading across the world.  

In a statement accompanying the group’s financial results for the year ended December 31, 2020, Old Mutual said last year was one of the most challenging years ever faced.  

“We remained deeply committed to supporting our customers, employees and communities through these unprecedented times.  

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

Old Mutual said as part of its ongoing relief initiatives to customers, it 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 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 healthcare workers and regional hospitals.” 

It said despite the impact to earnings, strong gross inflows throughout the year demonstrates the resilience of the business.  

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

“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.  

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This, it said 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-19 basis at R7,7 billion, reflecting a 14 percent decrease on the 2019 figures.

In line with its dividend policy, 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 has a niche business in China. 

HERALD

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