South African insurer Old Mutual remained resilient in 2020 despite the challenges of COVID-19-related lockdowns, although the company did see a financial impact from the pandemic.
Results from operations (RFO) were 7.7 billion rand (about US$520.5 million), 14% down from the prior year, according to earnings results released by the insurer. Direct COVID-19 impacts for the full year amounted to 6.1 billion rand due to an increase in pandemic reserves, business interruption and rescue claims, and negative mark-to-market losses in Old Mutual’s credit and private equity portfolios.
Adjusted headline earnings of 2.5 billion rand were down 75% from the prior year, impacted by lower shareholder investment returns and Nedbank earnings.
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However, Old Mutual’s solvency position was strong at the end of 2020 thanks to key regulatory approvals and capital management actions that offset lower earnings and additional provisions raised for COVID-19. Return on embedded value also remained positive despite Old Mutual absorbing large negative impacts related to the pandemic, the company said.
“2020 proved to be a formative year for Old Mutual,” said CEO Iain Williamson. “Despite the challenges, we remained true to our purpose of championing mutually positive futures every day for all of our stakeholders. … We have come through an exceptionally difficult year in good shape and extremely well-equipped to build on our core, our brand, our strategy, and our strengths.”