Covid-19 job cuts hit SA women hardest: Old Mutual

Johannesburg - Of the three million jobs lost in early lockdown – between February and April 2020 – two-thirds (2 million) were held by women. Now, over a year into the pandemic, the recently released Old Mutual Claim Statistics Report reveals that 58% of 2020 retrenchment cover claims were paid out to women, confirming that the economic impact of Covid-19 hit working women harder than it did working men.

Old Mutual paid out 30% more in retrenchment cover claims in 2020 than in 2019, representing a R3 million increase. “This is one of the highest-ever increases in retrenchment cover claims, directly related to the Covid-19 outbreak and the economic devastation that followed,” explains John Kotze, Retail Protection Product Head at Old Mutual.

The proportion of claims paid to women shot up 21% in 2020 (from 48% in 2019), a clear indication that women faced retrenchment in significantly higher numbers than men last year.

Which provinces were hit hardest?

The Eastern Cape saw the highest increase in Old Mutual retrenchment claims in 2020 at 12% – exactly double its share of 6% in 2019. The Western Cape accounted for 25% of claims (up from 15% in 2019), while KwaZulu-Natal made up 15% of claims (up from 13% in 2019).

Surprisingly, Gauteng, which accounted for 42% of retrenchment claims, recorded a decrease from 53% in 2019, suggesting that jobs were relatively more secure in this province. This is, however, in the context of an overall increase in both job losses and retrenchment claims.

Which age group was hardest hit?

In 2020, those between the ages of 30 and 40 filed the highest proportion of claims across five age brackets (20-30, 30-40, 40-50, 50-60 and 60-70) at 39% - up from 36% in 2019. At the same time, those between the ages of 50 and 60 saw the biggest increase in claims year on year, from 18% in 2019 to 23% in 2020.

What can we learn from 2020 stats in 2021?

“There simply could not have been a sharper reminder to South Africans than 2020 of how important it is to safeguard yourself – and your family – in the event you lose your job,” says Kotze.

Yet, it’s not all gloom and doom. Early this year, the National Income Dynamics Coronavirus Rapid Mobile Survey (NIDS-CRAM) showed that South Africa recovered better than expected numbers of jobs (2.1 million) as the most severe lockdown restrictions lifted. According to Kotze, this partial recovery represents an opportunity for households to reflect on the lessons of mass job losses in 2020 – and to prepare for future economic downturns that may cause an upswing in unemployment once again.

“Being retrenched is stressful enough – the last thing you want is to get yourself into bad debt or risk losing assets like your home or car. If you are currently employed, taking out retrenchment cover now means that, if you are laid off down the line, you will still receive an income to cover your living expenses for a period of time, while you look for another job,” explains Kotze, who believes this type of insurance is a key part of good financial planning and resilience in the face of crisis.

Old Mutual paid out over R14 billion in underwritten, non-underwritten and corporate risk cover claims in 2020. Of this, R6.48 billion was made up of underwritten claims – under which retrenchment cover falls – up from R5.33 billion in 2019.

Click here to read Old Mutual’s 2020 Claims Statistics report.