Discovery has put aside R3.44-billion war chest for uncertain times

Durban –Insurer Discovery has put R3.44billion aside for Covid-19 claims and lapses to see it through the uncertainties created by the pandemic.

Chief executive Adrian Gore said yesterday that the fund would cover the expected effects for the year to end June to December 2021.

Gore said the fund had been budgeted for in the 2020 reporting year.

“The economy is in a difficult phase right now globally caused by the uncertainty created by Covid-19. However, Discovery has proven to be resilient during this period and we are well-positioned to come out of Covid-19 in a strong position,” said Gore.

Discovery calculated its Covid-19 provisions to estimate the future mortality, morbidity and economic effects of the pandemic by estimating excess mortality and excess lapses expected to arise in 2021 and 2022 on a variety of scenarios by setting a stressed, central and light scenario.

The pandemic has already caused a dent in the group’s full-year results as profits slumped 97% to R176-million, however, core new business rose 5% to R19.17billion despite normalised operating profits falling 22% after providing for the Covid-19 related impacts to R6.07billion.

Discovery did not declare a final ordinary share dividend due to the uncertain and potentially volatile economic environment caused by the pandemic.

It said dividends would be considered when appropriate.

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