June 10, 2020 / 12:57 PM / 2 months ago

UPDATE 1-Insurer Sanlam cautious about new business growth on recession worries

(Adds comment, background)

June 10 (Reuters) - South Africa’s largest insurer Sanlam Ltd on Wednesday flagged a cautious stance for the rest of its financial year and said its new business growth potential remains under pressure due to anticipated steep recessions in many of its markets.

The 101-year old company said though the eventual claims from the COVID-19 outbreak remain uncertain, the company’s pandemic reserve of about 760 million rand ($45.93 million) is available to buffer any impact at its life insurance businesses.

Sanlam’s net earnings fell 26% for the first four months of the financial year, ended April 30, from the year-ago period.

“The lockdowns and curfews imposed since the end of March 2020 and throughout April had a significant adverse impact on new business sales performance,” the company said.

South Africa, Sanlam’s largest market, was reeling from a recession even before the COVID-19 pandemic brought all economic activity to a halt in March.

Sanlam, which has been on an expansion drive across Africa, posted a 19% fall in annual profit in March as it recorded several one-time charges. ($1 = 16.5452 rand) (Reporting by Shanima A in Bengaluru; Editing by Ramakrishnan M.)

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