Worst-ever death claims lay bare pandemic’s toll on SA

Mortality payouts almost doubled to a record for South Africa’s fourth-largest insurer by market value as the coronavirus ripped through the country.

Momentum Metropolitan Holdings Chief Executive Officer Hillie Meyer said on Wednesday that the company’s life insurance businesses paid out R10.7 billion ($746 million) in death claims in the year ending in June, compared with an average of R5.6 billion annually over the three years preceding the pandemic.

The firm suffered total mortality losses of R2.8 billion and has added to its reserves after a third wave of Covid-19 infections drove up the number of deaths in its main market. South Africa has the highest number of confirmed coronavirus deaths in Africa, with an official death toll of more than 83 000.

“We have seen that vaccinations not only reduce infections, they also protect people from severe symptoms and hospitalisation, and improve their chances of survival,” Meyer said in a statement. “A faster rollout of the vaccination programme and achieving the stated objective to vaccinate 70% of the population, will certainly help to curb the pandemic to manageable proportions.”

While a vaccination rollout is underway, the nation of about 60 million people is bracing for a fourth wave of infections to hit by December. Fellow South African insurer Discovery has said the severity of the country’s virus outbreak has turned out to be about five times worse than in the UK.

South African life insurers settled claims worth R47.6 billion in the year through March after the deaths of more than one million policyholders, which represents an increase of 309 733 from the same period a year earlier.

Excess deaths in the nation are expected to surpass 250 000.

Despite its abnormally high level of mortality claims, Momentum Metropolitan said it made progress in boosting sales and will pay a dividend of 40 cents per ordinary share for the year.