Liberty tops up pandemic reserve amid Covid-19 death claims

Liberty tops up pandemic reserve amid Covid-19 death claims

The third wave of the coronavirus has necessitated a top-up of insurance giant Liberty Holding's pandemic reserve, which it set up last year to provide for the expected impact of Covid-19 on its business.

In a trading statement on Thursday, the company said: “Consistent with the Beta variant being more severe than the first variants in SA, the impact in 2021 on mortality of the second wave exceeded expectations in the SA Retail and Lib-Hold Corporate businesses.

“This, together with the impact of the current third wave and the associated prevalence of the Delta variant, has necessitated a top-up of the pandemic reserve.

“Although the rollout of SA’s vaccination programme is gaining impetus and will go some way to mitigate the rate and severity of infections, the short-term impact of the pandemic remains uncertain.”

So far, 70,908 people in SA have died of Covid-19 related complications, including 520 deaths reported overnight.

On Wednesday evening, the National Institute for Communicable Diseases said 17,351 new Covid-19 cases had been identified in SA in the 24-hour reporting period, bringing the total number of laboratory-confirmed cases to 2,408,525. This increase represents a 24.4% positivity rate. 

Lib-Hold said it continues to remain well-capitalised, with Liberty Group Ltd remaining comfortably within the capital coverage target range of 1.5 to 2.0 times after taking account of the ongoing operational affects of the pandemic and the increase in the pandemic reserve, demonstrating the financial strength of the business.

The group will file its half-year results on August 4.

It expects to report normalised headline earnings per ordinary share (NHEPS) of between 96.6c and 118c (June 30 2020 NHEPS: loss per share of 802.5c), headline earnings per ordinary share (HEPS) and basic earnings per ordinary share (EPS) of between 75.9c and 92.7c (June 30 2020 HEPS: loss per share of 855.2c, and June 30 2020 EPS: loss per share of 902.4c) for the six-month period ended June 30 2021.