(Adds business interruption details)
JOHANNESBURG, Jan 25 (Reuters) - South Africa's third-biggest insurer Old Mutual Ltd (LON:OMU) OMUJ.J said on Monday its headline earnings per share (HEPS) for the year ended Dec. 31 were likely to slump more than 20% on-year, as the COVID-19 pandemic resulted in higher provisions.
The insurer did not share specific numbers on HEPS, the main profit measure in South Africa.
"While there are encouraging signs of recovery in our sales metrics, we are concerned about the rapidly increasing rate of COVID-19 infections in our key geographies," the company said on Monday.
The company said it has started processing outstanding claims of business interruption that occurred due to a lockdown announced by the South African government in the month of April to curb the spread of the coronavirus.
Insurers in the country had refused to honour claims by companies that were shuttered due to the national lockdown as they argued that these claims were not covered under their business interruption policies.
But a court ruling in December overturned an appeal by insurer Guardrisk, forcing other insurers to start processing some claims.