Liberty to review its Covid-19 reserve

Insurance group Liberty, which set aside R3bn worth of provisions in 2020 to deal with the fallout of Covid-19-related claims, will review its pandemic reserves in June.

The company said yesterday the review would take into account the possibility of new Covid infections.

Insurance companies were in the eye of the storm in 2020 as the economy contracted the most on record, leading to a rise in unemployment and subsequent claims.

There were also higher Covid-related claims.

SA experienced one of the world’s worst death tolls from the pandemic, according to the latest report by the Medical Research Council, putting the figure at 157,000, compared with an official death tally of 52,687.

Releasing its operational update, Liberty said death claims rose significantly in the three months to March, but were not worse than it initially anticipated.

However, Liberty Corporate division experienced high claims exceeding the pandemic reserve, which affected its profitability.

Group long-term insurance indexed new business sales for the March quarter were up 12.4%, with the SA retail business reflecting an improvement in new business inflows due to strong growth in embedded banking product sales.

“In contrast, in the intermediated distribution channels, new business volumes and margin remain a challenge, with a key focus maintained on managing the expense base in a disciplined manner, including continued investment into the group’s strategic initiatives,” Liberty said.

Group total assets under management rose 2.5% to R795bn, largely due to favourable investment market performance.