Insurer Warns of South African Death Spike in Covid Third Wave

The owner of South Africa’s largest health-insurance administrator, Discovery Ltd., says the country could record an additional 92,500 Covid-19 deaths by the end of the year if the nation’s vaccine program fails.

In the absence of an effective roll-out of inoculations and restrictions to halt super-spreader events during the Easter holidays in April, 92,500 people could die until December, Chief Executive Officer Adrian Gore said in an online presentation on Thursday. If the effect of super-spreader events is curbed by significant progress in the vaccine program, that number should halve.

“The vaccination program has to be successful and has to be rapid,” Gore said.

The government began administering coronavirus vaccines on Feb. 17, dispensing Johnson & Johnson shots to health workers and top politicians. The process of inoculating two-thirds of the population of 60 million in order to achieve herd immunity may take 12 to 18 months.

The biggest challenge will be ensuring that high-risk groups are vaccinated by mid-winter, according to Gore.

“That would be a big victory,” he said.

With more than 1.5 million known coronavirus infections and almost 50,000 deaths recorded by the Health Ministry since March 2020, South Africa has been hit hardest by the pandemic in Africa. Discovery has set aside 3.4 billion rand ($231 million) in anticipation of future Covid-19 claims and insurance-policy lapses in South Africa and the U.K. last year.

While South Africa’s second wave of Covid-19 infections in December and January hitting Discovery harder than the first, the company is expecting earnings to increase by at least 20% for year ending in June, compared to the previous period, it said in a statement on Thursday when it released its financial performance for the first half of the year.

The bullish forecast is “quite bold” and “something the market should not ignore,” Warwick Bam, head of research at Avior Capital Markets, said by phone. “If you focus on mortality being the key risk, Discovery has enough reserved for that. They seem confident.”

©2021 Bloomberg L.P.

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