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South Africa-based Old Mutual reported a 41 percent rise in annual profit yesterday, but shares in the insurer fell by more than 2 percent as it raised provisions to cover higher-than-expected claims linked to Covid-19 deaths.

Headline earnings per share, the main profit measure in South Africa, rose to 163,8 cents last year from 116,1 cents a year earlier.

Its basic earnings per share stood at 151,3 cents, versus a loss last year, as Old Mutual rebounded from the pandemic though the sector still faces high mortality claims related to the virus.

“I am proud and very pleased with the resilience and agility we demonstrated,” chief executive Iain Williamson said in a statement, adding this resulted in a strong recovery in sales and earnings.

Its operating profit increased more than twofold to R4,38 billion despite excess death claims of R6,8 billion. Old Mutual shares lifted off session lows to trade down 1,1 percent at R12,87 at 12:06.

Williamson told Reuters that the excess deaths related to Covid-19 were likely to continue for the next few years. — Reuters.