Economy & Politics

Covid-19: the old South African insurer Old Mutual, knee on the ground

Vuyo Lee is the marketing director of Old Mutual, guardian of 175 years of history.

South African insurer Old Mutual, 175, said on Thursday May 28 that he expects more than 20% profit loss in the first half of this year due to the negative effects of the coronavirus.

However, the company, which is owned by global shareholders including the BlackRock Fund Advisors, has said it will take restrictive measures, including lowering costs to deal with COVID -19. In its statement, Old Mutual said that the pandemic is severely hampering its supply in the market and expects the recovery to be slow. “To alleviate the expected pressure on profits, we have implemented a series of management measures aimed at reducing expenses in 2020”, notes the company created in 1845 and listed today in London and Johannesburg.

Yet despite the difficulties, Old Mutual responded well to the internal stress tests. The capital and liquidity levels were considered satisfactory. End of fiscal year June 30, earnings per share (EPS) (the primary measure of earnings in South Africa) is expected to decline 20% year over year after a 33% decrease in operating profit in the first quarter.

As a reminder, since June 2018, the Old Mutual plc shares have been written off and Old Mutual Limited and Quilter plc have become two independent companies, listed on the Johannesburg, Zimbabwe, Malawi, Namibia and London stock exchanges. On October 15, 2018, Old Mutual unbundled its majority stake in Nedbank for the benefit of its shareholders, who were paid 43.2 billion rand, or $ 2.45 billion.

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