Momentum warns of cyber security breach

Financial services group Momentum Metropolitan warned on Monday (17 August), that a third party unlawfully accessed a limited portion of data of a subsidiary of the group.

It said in a statement that it became aware of a data breach on its network on Thursday (13 August) and immediately activated its IT security incident plan, which included the implementation of additional systems monitoring and the reinforcement of its IT security.

“The group’s IT teams have been working non-stop to ensure that service to clients remains unaffected.”

“In conjunction with cyber forensic partners, the group has done extensive investigations into the nature and extent of the breach. Based on the investigation to date, the group confirms that information accessed does not contain any client or member data.

“Information accessed contains administrative and financial data that is not expected to prejudice any stakeholders of the group,” it said.

Momentum said it has alerted the authorities and investigations are ongoing.

The group meanwhile, said in a trading statement on Monday that it expects headline earnings per share, and diluted normalised headline earnings per share, to decline by between 45% and 65% for the 12 months ended June 2020.

Momentum Metropolitan said that when it reported results for the nine months to 31 March 2020, it was noted that the impact of the Covid-19 pandemic on the investment markets in South Africa had a significant impact on its results.

The partial recovery during the last quarter of investment market losses that were reported in 3Q2020 was not sufficient to offset the impact of the tough operating conditions created by the Covid-19 pandemic, including the need to raise significant additional reserves for potential Covid-19 related claims and other adverse experience, the insurer said.

The full-year results will, therefore, reflect a decline in diluted normalised headline earnings in the South African retail and corporate life insurance operations, as well as the Shareholder segment, Momentum Metropolitan said.

Momentum said that it has reviewed recent claims experience, publicly available models that project infection and mortality rates of Covid-19 and observed data from relief options that clients have exercised in the preceding three months.

“The expected impact of these items on the applicable mortality, disability and termination assumptions used in the valuation basis of the life insurance operations of the group have been considered, as well as the impact of claims on non-life insurance business in Guardrisk,” it said.

The overall impact is expected to be a reduction in the group’s earnings, headline earnings and diluted normalised headline earnings for the year of R1.3 billion (before-tax) and R1.0 billion (after-tax).

Earnings per share are expected to be further negatively impacted by an impairment on the owner-occupied property of R0.5 billion, which can largely be attributed to property valuations in Sandton, as well as a R200 million write-off to the goodwill of the non-life insurance operations, Momentum said.

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Momentum warns of cyber security breach