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Is Discovery’s R3.4bn Covid-19 provision enough?

Business News 1 month ago

In mid-June, it warned that it would book an approximate R3.3 billion charge as a reserve for “the potential claims and lapse impact of Covid-19 that are projected to emerge in future periods”.


18 Sep 2020
PREMIUM!
Is Discovery’s R3.4bn Covid-19 provision enough?

The shift comes as Discovery’s overall base continues to grow. As the largest open medical scheme in SA, changes across its base are material. Image: Moneyweb

Prior to the release of Discovery’s full-year financial results to end-June, the market already had a solid indication of what to expect. In mid-June, it warned that it would book an approximate R3.3 billion charge as a reserve for “the potential claims and lapse impact of Covid-19 that are projected to emerge in future periods”. The final provision is R3.442 billion, with nearly 60% of this comprised of the reserve in the Discovery Life (insurance) book. Two further charges have been booked in the UK health (R713 million) and life (R569 million) insurance businesses with a small R181 million charge...

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