RMI scraps final dividend amid Covid-19 hit
Insurers have felt pressure as a result of the pandemic, which has prompted job losses and a need to make provisions for future claims
Rand Merchant Investment Holdings (RMI), which has stakes in Discovery, OUTsurance and UK insurer Hastings, has scrapped its final dividend as Covid-19 has battered financial markets and the insurance industry.
Headline earnings fell 49% to R1.9bn in RMI’s year to end-June, with insurers under pressure amid the cost to lives and jobs from the pandemic.
RMI has a R44.7bn financial services portfolio, including 25% of Discovery, 27.3% of Momentum Metropolitan and 89.1% of OUTsurance.
Discovery had made a R3.4bn provision for future claims and lapses as a result of the pandemic, and also held on to its final dividend for its year to end-June.
Momentum Metropolitan also opted not to pay a final dividend in its year to end-June, when profits about halved amid the pandemic’s effects on claims and policy lapses.
“The heightened medium-term economic and insurance-related uncertainty across the jurisdictions and businesses within the RMI portfolio has necessitated a revision of RMI’s dividend policy,” the group said.
In afternoon trade on Friday, RMI’s share was down 0.89% to R28.90, having fallen 6.29% so far in 2020.
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