10/03/2020
COVID-19 (Coronavirus) – OLD MUTUAL VIEW:
what you need to know about the impact on Risk cover and Investments Because of the current outbreak of the Coronavirus in 103 countries across the world, and the identification of the first three patients in South Africa who have tested positive as of 08 March 2020, we would like to engage you on our views and response to date.
As a responsible business, we strive to work with our partners –, customers staff, shareholders, regulatory bodies – in an ethical, fair and just manner. We recognise that sustainability stretches across economic, environmental and social spheres. Our framework for ethical business conduct ensures that we are fully compliant with all Governments in the territories where we operate, as well as international bodies, such as the United Nations. Since the outbreak of the Coronavirus, we have monitored its progress from all perspectives. We are in communication with the South African Department of Health, who are following the World Health Organization’s (WHO) strict protocols.
WHAT WE ALL NEED TO REMEMBER
As members of society, we all need to consider our communities and adhere to the following preventative guidelines:
• Wash our hands often with soap and water.
• Avoid close contact with people who are sick.
• Stay home when we are sick.
• Avoid touching eyes, nose, and mouth.
Cover cough or sneeze with a tissue, then throw the tissue in the trash.
• Clean and disinfect frequently touched objects and surfaces using a regular household cleaning spray or wipe.
IMPACT ON THE INVESTMENT MARKETS
The majority of people diagnosed with COVID19 experienced only relatively mild symptoms and made a full recovery. Despite this, COVID19 is now the key theme driving investment markets at least 50% of the time. This means that every time there is new information, there is panic, as was seen in the JSE on the 5th March 2020 after the announcement of the identification of the first case in SA.
Things to remember about the investment markets:
• Markets tend to overreact both on the upside and the downside.
• The current sell-off follows a strong rally late last year and into January.
• While the world economy will suffer a possibly sharp blow, it should be temporary. Once the outbreak runs its course, economic activity should resume.
IF I HAVE AN OLD MUTUAL POLICY, AND I GET DIAGNOSED WITH THE VIRUS, CAN I CLAIM?
We do not have a general exclusion that disqualifies customers from claiming for the virus or illnesses related to it. We will continue to assess claims against the terms and conditions of the policy contracts. And if a claim is valid and meets all claim criteria, we will pay.
Here are some examples of how a few GREENLIGHT benefits could pay out if you were infected with the virus:
GREENLIGHT Death benefit:
• If you die from the Covid-19 virus, or a related illness, we will pay.
GREENLIGHT Sickness Income benefit:
• If the symptoms of the virus result in you being booked off work for longer than your waiting period (7 days or 1 month), we will pay you up to 100% of your net income. We won’t even ask you to prove a loss of income.
GREENLIGHT Temporary Income benefit:
• If you are unable to do your job for longer than your selected waiting period, we could pay you a monthly income for up to 24 months to replace any lost income.
GREENLIGHT Severe Illness benefit:
• If you are diagnosed with the virus and it leads to a listed condition, like chronic kidney failure, we will pay.
WHAT WE SUGGEST YOU DO
1. Speak to your financial adviser to help you review your financial plan.
2. It is key to remember the following investment principles: - Don’t panic, stick to your investment plan to meet your goals; - Stay invested, time out of the market is costly.
If you disinvest, you might miss the recovery and you might be facing penalties. In conclusion, the impact of the Coronavirus is just one more example of volatility in the investment markets. A long-term horizon and a diversified portfolio are the best defense against market volatility. Exercise caution when making investment decisions and ensure that you are adequately covered for risk events. This is where the right financial plan is vital. And remember to wash your hands.
If you have any questions, please contact JD VAN RENEN on (0824536827) or send an email to [email protected].
