- Results from operations up 48% to ZAR1.81 billion
- ZAR2.7 billion paid towards COVID-related death claims
- Gross written premiums increased by 2% to ZAR5.07 billion
JSE-listed financial services giant, Old Mutual Limited said its profitability for the year to date has improved as a result of strong performance in local equity markets which drove higher asset-based fees due to an increase of 6% in average Funds Under Management (FUM).
FUM increased to ZAR1.15 billion, 4% above ZAR1.10 billion reported in the March 2020 quarter.
“The higher closing FUM balance provides a strong asset base on which to earn higher fees in the second quarter,” the Group said in an operating update for the three months ended 31 March 2021.
Results from operations scaled up 48% to ZAR1.81 billion compared to ZAR1.22 billion recorded in the prior year’s comparative period.
Old Mutual revealed that it paid out ZAR2.7 billion towards COVID-related death claims in the three-month period, leaving around ZAR1.3 billion in its reserve set aside for the pandemic.
“We continue to closely monitor our claims experience as future waves and their impacts remain uncertain,” said the Group.
“We have actively engaged with brokers and consultants in our Property and Casualty business regarding business interruption and rescue claims processes and we continue to pay claims as documentation is received.”
The Group said this was a result of good customer retention and pleasing acquisition rates in East Africa and Nigeria as well as ongoing benefits from various strategic partnerships in Old Mutual Insure.
Meanwhile, there was a decrease in Loans and Advances from the prior year was mainly driven by lower footfall in retail branches in South Africa which has not yet fully recovered to pre-COVID levels, and the further tightening of credit criteria in Old Mutual Finance as the Group sort to manage risk appetite in the current environment.
There was, however, a marginal growth in Loans and Advances in the Rest of Africa largely due to the relaxation of lockdown restrictions in East Africa and the ongoing recession in Namibia driving an increase in government payroll-linked disbursements.
Going forward, the Group said that uncertainty over the vaccine rollout and potential third and subsequent waves could place pressure on earnings in the short term.
“However, we remain confident that the strength of our balance sheet and liquidity will enable us to withstand this volatility, deliver on our promises to customers and provide a platform to accelerate growth as opportunities arise,” said the Group.
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