Liberty Holdings swings into loss amid Covid-19 provisions
The group has established a pandemic reserve to deal with the fallout from Covid-19, but says death claims to date have been limited
Financial services group Liberty Holdings swung into an almost R2.2bn loss in the six months to end-June, after establishing a pandemic reserve to deal with the fallout from Covid-19.
The group has put aside R3bn for the pandemic, reporting a normalised headline loss of R2.17bn, from headline earnings of R2bn previously. Normalised refers to the group adjusting for the valuation of its property interests, which it says better reflects economic reality.
The group said death claims related to Covid-19 had been low to date, but were starting to increase.
Death and disability payments made by Liberty during the six months increased by 5.1% to R5.3bn.
The insurer and asset manager, which was founded in 1957 by Donald Gordon, said net external third-party cash inflows rose 11% to R14.7bn during the period, largely due to good inflows to money market funds from institutional managers in a risk-averse environment.
However, it has seen pressure on new business volumes in its insurance business as a result of SA’s lockdown.
Net client cash outflows at Liberty Corporate almost doubled to R823m, with the group saying small and medium-sized business clients were under “severe pressure”.
“The future outlook remains very uncertain, both in relation to the extent of claims costs and of economic dislocation, but Liberty is confident that it has the systems and resources to meet the challenges it brings,” the group said.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.