The man on a mission to revive Old Mutual

Jurie Strydom, the new chief executive office of Old Mutual, Africa’s largest insurer by assets, wants to leverage its scale to win back market share and enhance value.

“Bringing Old Mutual back to where it belongs on the table in South Africa and in Africa as an insurance group” is “really the mission for me,” said Strydom, who took the helm in June.

“That’s going to require cost savings, it’s going to require some operational improvements to improve persistency, but it’s also going to require us to regain market share,” he told Bloomberg on Wednesday after the company posted interim results.

Old Mutual reported a 29% rise in adjusted headline earnings to R4.2 billion in the first half of the year. It described a “cautious but constructive outlook”, and the board authorised a R3 billion share buyback.

The insurer gained as much as 4.2% after its earnings, before paring gains to trade 2.4% higher by 2:38 p.m. in Johannesburg.

Profit margin

Strydom also wants to improve the profit on new insurance policies, known as the value of new business margin. It was 1.3% in the first half, below the company’s 2%-to-3% target range, causing a 6% fall in the insurer’s group equity value to 18.40 rand per share.

“We’re pivoting to return on group equity value and cash generation as our key metrics,” he said. “You’ll see a real focus, particularly on the life side of the business — a drive to improve that VNB margin.”

Old Mutual was founded in Cape Town in 1845 and – as the name suggests — is one of the oldest insurers on the continent.

But it has struggled with client retention in South Africa amid competition on products like credit insurance and funeral plans from lenders, including Capitec, who has been granted licenses from the country’s regulators.  Newer fintech entrants are also fighting for a piece of the action.

Market share

“The market share losses have slowed recently, but they are struggling to recover what was lost,” said Avior Capital Markets analyst Adrienne Damant.

But Old Mutual “has got the chassis in the base to be able to play at a higher level from a market share perspective,” she said.

To grow its South Africa business, the company has set up a new life and savings segment for the country’s largest umbrella fund, with R187 billion in assets under management and administration, and a wealth management business overseeing R442 billion.

It also opened OM Bank to the public in July. The insurer has invested R4.3 billion to build the bank and plans to add a further R1.6 billion to fund its public roll out. The country’s newest lender is expected to make losses of as much as R1.3 billion in 2026 and break-even in three years. 

Beyond South Africa, the insurer is assessing operations to concentrate resources in markets with the greatest potential.

It has already closed life and general insurance operations in Nigeria and Tanzania and plans to exit South Sudan. It is now looking at its operations in China, East Africa and West Africa to ensure they lift returns.