South Africa's Old Mutual warns of full-year loss

EMMA RUMNEY South African insurer Old Mutual Ltd warned yesterday of a full-year loss, saying it had been forced to increase provisions and reserves related to the Covid-19 pandemic, sending its shares down more than 3%.It forecast a basic loss per share of between 97.9 cents and 139.5 cents in the year to Dec. 31, and an after-tax loss of up to 6.2 billion rand (US$404 million).Old Mutual, South Africa's second largest insurance firm, increased provisions by almost R3.4 billion as claims outstripped the funds it set aside in the first half amid a second, more severe wave of Covid-19 in South Africa.It also more than doubled a previous estimate for an increase in reserves for business interruption and business rescue to about R300 million from up to R140 million.Combined with counterparty mark-to-market losses and downward revisions to some assets in its unlisted equity portfolios as the second pandemic wave hit markets, these factors drove the impact on profits, Old Mutual said."We exercised tight cost control across the business to part mitigate negative earnings impacts," it said, adding it had also seen a recovery in sales and productivity in the second half.Not all South African insurers had to jack up provisions but they have all faced challenges during the pandemic, including changes to their usual distribution channels cause by lockdowns.They also face the threat of policy lapses as cash-strapped customers cut back on spending, with insurance often among the first things to go.Old Mutual said its adjusted headline earnings per share (HEPS) would remain positive, but decline by up to 79% to sit between 44 cents and 69.4 cents.HEPS is the main profit measure in South Africa, but strips out certain one-off items that hurt Old Mutual's performance last year. - Nampa/Reuters

South Africa's Old Mutual warns of full-year loss

Kommentaar

Republikein 2026-06-10

Meld asseblief aan om kommentaar te lewer

South Africa's Old Mutual warns of full-year loss

Kommentaar

Republikein 2026-06-10

Meld asseblief aan om kommentaar te lewer

Intekening vereis om toegang tot inhoud te kry. ×

MELD AAN

Advertensie

Intekening vereis om toegang tot inhoud te kry.