Pays R1.2 billion in Business Interruption catastrophe claims in 2021
16 March 2022: Old Mutual Insure (OM Insure) has delivered strong financial performance for the year ended 31 December 2021, recording a significant recovery following the Covid-19 crisis in 2020, and in some areas surpassing pre-pandemic performance.
OM Insure achieved an improved underwriting margin of 4.8% compared to -3.8% in 2020. The insurer also achieved a solid net underwriting profit of R449 million in 2021, compared to a loss of -R357 million in 2020. Furthermore, OM Insure improved its Gross Written Premium significantly in 2021 to R15,927 billion, compared to R14,771 billion in 2020, recording a growth rate of 8%. It also delivered Results from Operations (RFO) of R543 million, more than 100% higher than the loss of -R131 million recorded in 2020.
“Our business delivered Gross Written Premium growth as we continued to look for ways to make it easier for customers to do business with us in the challenging 2021 environment. Credit Guarantee Insurance Corporation (CGIC) posted 19% growth and iWYZE 13%. Our Personal Lines business grew by 5%, which is significant given the ongoing Covid-19 crisis and the increased catastrophic weather-related events like fires and floods we saw last year,” said Garth Napier, Managing Director at OM Insure.
“Our net claims ratio improved to 59% compared to 67% in 2020, largely due to the absence of Business Interruption related claims. However, this figure was offset by increasing attritional claims in our Retail and iWYZE portfolios,” said Napier.
The insurer paid R1.2 billion in Business Interruption claims in 2021, of which R1 billion was for settlements and R200 million for interim payments. Furthermore, Old Mutual Insure played a significant role in supporting state insurer SASRIA during the nationwide looting, which triggered claims amounting to R32 billion and cost the economy more than R50 billion. To date, the insurer paid 1 079 claims on behalf of SASRIA, to the value of just over R500 million.
Looking ahead, he added that the company is focussed on simplifying its products, processes, and IT systems to unlock further sustainable cost efficiencies across the business, while realising its strategic ambitions of growing the business. In line with this, in February 2021 OM Insure announced it had acquired a 51% stake in One Finance Services Holdings, unlocking new growth opportunities for the business.
“In 2022 we want to strengthen our distribution capabilities and non-insurance revenue streams, while continuing to prioritise support for Small to Medium Enterprises,” concluded Napier.