(Alliance News) - Old Mutual Ltd on Monday said it is seeing "encouraging signs of recovery" but remains concerned about the rapidly increasing rate of Covid-19 infections.
Anglo-South African financial services firm said gross outflows for the 12 months ended December 31 were ZAR188 billion, up 10% from the year prior.
Old Mutual saw positive net client cash flow of ZAR10.1 billion in 2020, up from ZAR3.1 billion in 2019. This was driven by strong investment flows across the group in the second half of the year, which were partially offset by higher outflows in Old Mutual Corporate as a result of the deteriorating economic environment, the firm said.
Old Mutual said: "Whilst there are encouraging signs of recovery in our sales metrics, we are concerned about the rapidly increasing rate of Covid-19 infections in our key geographies and the impact that the pandemic could have on our customers, economic recovery, and mortality rates.
"We are currently in the process of finalising our life reserves, considering the global experience of the impact of the pandemic and the potential of a more sustained spread of the virus. There remains a large degree of variability in the data and we are monitoring infection and mortality related claims data on a weekly basis."
Old Mutual added that it has started the process of finalising all outstanding claims for business interruption insurance.
"The recent rulings on this matter by the Supreme Court of Appeal of South Africa have provided legal certainty, and we have therefore commenced with processing valid business interruption claims with specific conditions that are materially the same in nature as those already decided by the courts," Old Mutual said.
Net business interruption and business rescue reserves are expected to increase by between ZAR85 million and ZAR140 million from ZAR464 million reported in the first half.
Old Mutual shares were down 1.6% at ZAR12.65 each in Johannesburg on Monday morning, and 1.8% lower at 60.66 pence each in London.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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Old Mutual Lim. (OMU)