OLD MUTUAL NET CLIENT CASH FLOWS TRIPLE

JOHANNESBURG - Old Mutual net client cash flows more than tripled in its year to end-December amid strong investment flows and improving sales due to advisor productivity, the financial services group has reported.

Net client cash flow of R10.1 billion to end-December was R7 billion higher than the prior year, Old Mutual said in a trading update, adding that while it had experienced encouraging signs of recovery in sales, it is concerned about rising Covid-19 infection rates.

Old Mutual still expects headline earnings per share to fall at least 20 per cent for the year and like many SA insurers is battling with the fallout from Covid-19, which has resulted in hefty business interruption payouts to clients.

subsidiary

In a landmark Supreme Court of Appeal ruling against Momentum Metropolitan Holding’s subsidiary, Guardrisk, in December, the court dismissed with costs Guardrisk’s appeal against a prior ruling that it compensate Cape Town restaurant Café Chameleon for business interruption losses.

This confirmed that insurers are liable, provided there was an occurrence of Covid-19 within a designated radius of the insured premises.

“The recent rulings on this matter by the Supreme Court of Appeal of SA 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 yesterday.

The group said it expects that the net business interruptions and business rescue reserves reported for the year ended December 2020 to increase by R85 million -R140 million compared with R1.13 billion reported for six months ended June — an increase of as much as 12.4 per cent.

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