The plan to revive a 180-year-old South African insurance giant

Old Mutual CEO Jurie Strydom has unveiled his plan to re-energise the insurer’s operations in the coming years and improve outcomes for shareholders. 

This comes as Old Mutual has been increasingly seen as a sleeping giant in South Africa’s insurance industry, with immense scale not necessarily translating into strong financial performance. 

Old Mutual was founded in Cape Town in 1845 and is one of the oldest insurers on the continent, with its operations now expanding to East and West Africa. 

The insurer has long gone toe-to-toe with its old foe, Sanlam, but has been left behind over the past decade amid a fast-changing insurance market. 

Sanlam is now the most valuable non-banking financial services firm in Africa, with a market cap of R205 billion. Old Mutual sits with a market cap of R66 billion. 

It has not only lost ground to its oldest competitor, but challengers Discovery and Momentum have also grown strongly over the past decade to be valued at R152 billion and R46 billion by investors. 

Some of this was brought about by the insurer’s lengthy battle with former CEO Peter Moyo, which dragged on for four years and even reached the Constitutional Court. 

This resulted in Old Mutual appointing Iain Williamson as CEO for five years, which saw Williamson stabilise the insurer and build out its standalone banking offering. 

During this ‘holding’ period, other insurers did not waste time in aggressively launching new products and offerings to challenge Old Mutual’s dominant position in some categories. 

Most notably, Discovery launched its own bank during this period, which has scaled rapidly to over one million clients and profitability over the last half of its most recent financial year. 

This is something Old Mutual is looking to replicate with its OM Bank, which is not starting from scratch and already has 140,000 clients without having a full public launch. 

The bank’s success is pivotal to the insurer’s ability to stave off competition from banks that are looking to win over clients to their insurance offering by cross-selling products on their banking apps. 

Upon ascending to the helm of Old Mutual in June 2025, Strydom ticked all the boxes for the insurer’s chairman, Trevor Manuel. 

Crucially, Strydom was seen as the right person to re-energise Old Mutual and leverage its immense scale to unlock value and move on the front foot. 

He has considerable experience in South Africa’s insurance industry, having been CEO of Sanlam Life and Savings, head of Regent Insurance Group, and at the helm of Alexforbes Life. 

Apart from this experience, Strydom has also shown an appetite to disrupt and innovate, having been a fintech investor and the chairman of FSPHub. 

“Bringing Old Mutual back to where it belongs on the table in South Africa and in Africa as an insurance group is the mission for me,” Strydom told Bloomberg after presenting his first set of interim results. 

“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.”

 

The man with a plan

Upon becoming CEO, Strydom told investors that they would see Old Mutual refocus on group equity value and cash generation as its key metrics. 

“You’ll see a real focus, particularly on the life side of the business, a drive to improve that value of new business margin,” he said. 

Old Mutual will also focus on limiting customer churn by cross-selling products to lock clients into its ecosystem. This will improve its market share and give it an edge over banks looking to attract clients to their insurance offerings. 

At the insurer’s 2025 Capital Markets Day, Strydom expanded on his plan to improve Old Mutual’s fortunes by first focusing on unlocking value already within the company and then shifting gears to generating growth. 

Strydom explained that during the unlocking value phase, the immediate priority is to get Old Mutual’s financial metrics consistently into their target ranges. The generating growth phase is likely to see these targets revised upwards. 

Central to the unlocking of value is R2.5 billion in cost savings that have been identified to be implemented by the end of the 2027 financial year.

This is a huge effort, representing a 10% reduction on the company’s 2024 operational costs and will result in cost cuts across the company. 

The effort should end with a more efficient Old Mutual, with a leaner centre, intense cost discipline and the restructuring of management incentives. 

Strydom spent some time explaining the changes that are being made to management incentives, with Old Mutual moving towards line-of-sight cost targets. Strydom said the company lacked such targets in the past. 

Given Old Mutual’s scale, he explained that the company had relatively low hurdles for strategic investments in the past, resulting in capital misallocation. 

These hurdles are being raised to ensure better use of excess cash and enhanced returns for the company and investors. 

Strydom explained this using Old Mutual’s recent acquisition of 10X Investments for R2.2 billion, which will give it exposure to South Africa’s fast-growing passive investment space and exchange-traded funds. 

Old Mutual has historically also had a significant presence in Africa, which was expected to drive faster growth for the company. 

In some cases, this has not played out, with Old Mutual already shutting down its life and general insurance operations in Nigeria and Tanzania, with plans to exit South Sudan. 

The company is also analysing its operations in China, East Africa, and West Africa to ensure they improve their performance in the coming years. 

Strydom said Old Mutual still wants to maintain its scale in Africa, but ensure it remains profitable for the company. 

The graphics below show Strydom’s efforts to change Old Mutual’s key metrics and deliver performance incentives. 

Banking on growth

Central to Old Mutual’s second phase of generating growth is the success of its banking offering, which is not starting from zero. 

The company plans to leverage its extensive client base in South Africa to win over insurance clients to the new offering, giving OM Bank access to around seven million clients. 

On top of this, the bank is busy onboarding many of its existing Money Account clients, which it said is more than 500,000 individuals. 

OM Bank CEO Clarence Nethengwe explained at the Capital Markets Day that the bank is currently onboarding over 5,000 new clients a day. 

This is adding to its existing 140,000 clients, many of whom come from its Money Account offering, which the bank has already won over before launching publicly. 

While this growth is impressive, it is still some distance from the 2.8 million clients it estimates it needs to be profitable by 2028. 

Nethengwe said the bank is expected to win over 1.1 million clients from outside the Old Mutual Group, making OM Bank a key driver of future growth for the insurer’s other businesses and not just banking. 

Winning over clients is not only crucial to make the bank profitable, but is also increasingly seen as a protective move for its insurance business, with banks looking to make significant inroads into the insurer’s core offering.

Old Mutual also expects its banking app to drive significantly greater interactions with its products, with it estimating around 24 times more interactions per client per year.

This provides immense opportunities for Old Mutual to use the banking app to cross-sell its insurance and investment products to clients.

OM Bank will also take over the Old Mutual Finance business, which sits with a R15.5 billion loan book, which it says is profitable, and a strong branch network with 346 branches and 2,200 staff.

These two existing ‘banking’ businesses will be coupled with Old Mutual Connect, the insurer’s mobile virtual network operator. 

This brings around 161,000 customers with 249,000 activated SIM cards into the fold. Old Mutual said it averages 1,300 daily in-branch SIM card RICAs. 

The combination of these offerings under the bank gives it immense scale relatively quickly and a physical branch network that does not require significant investment to build out.