Africa-Press – South-Africa. South
African life insurers are shoring up their capital reserves as they brace for a
fifth wave of coronavirus infections. On
Thursday, Africa’s biggest insurer, Sanlam, said it will hold three times its
typical discretionary capital, increasing reserves to R3 billion rand, to give
it headroom to grapple with uncertainties caused by the pandemic. “The
group will hold a significantly higher level of discretionary capital until
such time that we are satisfied that there is no risk to group earnings and
dividends from the pandemic,” Sanlam CEO Paul Hanratty said in a
statement. Covid-19
deaths led to R4.2 billion of excess claims for Sanlam in 2021.While
fewer than 100,000 people have officially died of the virus in South Africa,
excess deaths during the pandemic climbed to 301,106 in the week ended 5 March. That
metric is seen as a more accurate way of measuring the impact of Covid-19 than
official statistics and means that as many as one in 200 in the country may
have been killed. ALSO READ | Momentum
Metropolitan paid R1bn more claims than usual a month during Covid-19 wave peaksDiscovery
has put dividend payments on ice until it receives certainty on the trajectory
of the virus. The company has not paid out to shareholders since before the
pandemic and held back even as other financial firms reinstated outlays.Standard
Bank-owned insurer Liberty said excess Covid-19 deaths in 2021 were higher than
it assumed when it set its pandemic reserve at the end of 2020. So, it
increased its reserve by R2.4 billion at the end of 2021.In
setting this reserve, the insurer assumed that 100% of the population will
become infected with Covid-19 in the current and subsequent waves, whether they
were previously infected or not and whether vaccinated or not.Momentum
Metropolitan Holdings is one insurer that said its assessments showed that it
didn’t need to create new provisions at the end of 2021. But it will assess the
sufficiency of the existing provisions again in June 2022. The group had R839
million of Covid-19 provisions left, net of tax on 31 December 2021.Additions by Londiwe Buthelezi, Fin24 Get the biggest business stories emailed to you every
weekday.Go to the Fin24 front page.
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