Financial services group Old Mutual said Tuesday (15 March), that high infection rates from the second and third wave of Covid-19 continued to impact its business and employees.
In publishing its annual results for the year ended December 2021, Old Mutual said its mortality experience “has been worse than anticipated, with R6.8 billion in excess death claims”. The group reported that it released R5.3 billion from its pandemic provisions, which partially offset the impact of excess deaths on its profit.
Iain Williamson, Old Mutual Limited CEO, said: “2021 was a really significant year for us, as we recovered from the enormous impacts that Covid-19 had on our operational and financial performance.
“I am proud and very pleased with the resilience and the agility we demonstrated in responding to the challenging operating environment, as well as the opportunities created by our business, which resulted in a strong recovery in both sales and earnings. This has enabled us to strengthen our position in the market.”
Old Mutual said that excluding considerable pandemic claims, the Personal Finance business had an outstanding year, with sales exceeding 2019 levels.
This, it said, was the result of a strong focus on adviser productivity and improving customer experience. Old Mutual reported good traction in the take-up of its new solutions, particularly Old Mutual Protect, which supported the Group’s recovery in the recurring premium business, replacing its previous flagship risk product, Greenlight.
Gross flows increased by 4% to R194.8 billion due to strong inflows in Old Mutual Investments and Wealth Management. Life APE sales increased by 16% to R11.4 billion, due to a strong recovery in sales following improved productivity levels.
Despite improved inflows, net client cash flows declined, mainly as a result of Covid-19 related mortality claims from the Life businesses and lower inflows compared to the prior year in Rest of Africa.
“We have R2.9 billion in pandemic provisions remaining to be utilised against future Covid-19 related mortality claims. There remains uncertainty around the pace of vaccination rollouts across most of our markets, the emergence of new Covid-19 variants and the changes in expected immunity. However, we continue to closely monitor our mortality claims experience”, noted Williamson.
“Looking forward, we expect continued growth in 2022, albeit at a slower pace than 2021. Our business is substantially rectified, a lot simpler than it was only a few years ago, and it is already starting to be amplified in many areas.
“Notwithstanding the uncertainties posed by potential new Covid-19 variants as well as recent events in Europe, we remain optimistic in the Group’s ability to shift gears and accelerate our growth trajectory,” he said.-bustech
