Bringing Old Mutual back to where it belongs

Old Mutual CEO Jurie Strydom wants to bring the insurance giant back to where it belongs among South Africa’s premier financial institutions. 

South Africa’s oldest insurer has fallen by the wayside in some respects in recent years, with it coming out at the end of a five-year ‘holding’ period after a lengthy battle between its board and former CEO Peter Moyo. 

Iain Williamson was appointed CEO following the fallout and stabilised the business while making progress on its standalone bank, OM Bank, as part of the company’s broader ambitions to become an integrated financial services provider. 

However, while Old Mutual was stabilising, its competitors were not sitting idle. For example, Discovery launched its own bank and has scaled it to 1.5 million clients, with it now generating a profit and able to stand on its own two feet. 

Old Mutual is looking to replicate this success with OM Bank, which has gotten off to a strong start ahead of its hard public launch later this year. 

Perhaps the best way to understand Old Mutual’s holding period is by comparing it to its age-old rival, Sanlam, which has gone from strength to strength and is now Africa’s largest non-bank financial institution. 

With a market capitalisation hovering around R200 billion, roughly three times that of Old Mutual’s, Sanlam is also getting in on the banking game through a deepening of its partnership with billionaire Patrice Motsepe’s GoTyme Bank.

The surging valuations of Sanlam, Discovery and Momentum, on the back of strong financial performances, are perhaps why Strydom feels Old Mutual is not where it belongs. 

Old Mutual, given its scale in South Africa, presence on the continent, and its lucrative asset management business, has all the assets to be at the head of the pack. 

Strydom is the man tasked with executing this in reality, with an immense R300 million incentive package to match the scale of the task. 

Daily Investor asked Strydom, following the insurer’s 2025 financial results on 17 March, what it means for Old Mutual to be back where it belongs. 

“I think that is two things. One is in terms of customer acquisition and activity, the brand reach in South Africa and on the continent,” Strydom said. 

“But obviously, that is related to shareholder value. You cannot claim to put Old Mutual back where it belongs without a corresponding increase in shareholder value.” 

Man on a mission

Old Mutual’s share price has had a dismal run since listing on the JSE on 26 June 2018, with its listing price of R27.79 more than double its current R14.62 per share. 

The company maintains that this share price is far off the group equity value of Old Mutual, which is above R19 per share. 

Strydom is looking to narrow this gap and surpass it, with his incentive package outlining a target share price of R21.74 by May 2030 for the CEO to receive his full remuneration. 

This puts Strydom’s interests clearly in line with shareholders, and now the CEO is looking to extend this throughout the company. 

“Our strategy is that of two phases – unlocking value and generating growth. We are clearly aligning the creation of shareholder value to how we compete as a business for customers,” Strydom said. 

“We are making that link, giving that clarity. I feel like we have created a lot of that clarity. There is an understanding of what we need to do. It is really about executing on that.” 

Strydom is seen as the right person to re-energise Old Mutual and leverage its immense scale to unlock value and put it back 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.

Strydom said the insurer is making good progress on executing its two-phased strategy, with the immediate priority being to get Old Mutual’s financial performance indicators consistently within the target range. 

This includes growing its dividend per share by 6% to 9% per annum for the next three years, a return on net asset value of 15% to 17%, a net underwriting margin of 5% to 8%, and a return on group equity value of 14% to 16%. 

Strydom said that in the generating growth phase, these targets may be revised upwards as OM Bank gains traction and Old Mutual invests in expanding its presence in Africa. 

Pulling all the levers

Much of the CEO’s focus has been on reorganising Old Mutual’s incentive structures and performance indicators to drive better accountability. 

This includes making Old Mutual’s clusters, including banking, life insurance, short-term insurance, and asset management, fully autonomous. Strydom said these clusters have to own their strategy and performance. 

Strydom explained that management incentives have been shifted towards line-of-sight cost targets, as the company previously lacked such targets.

The autonomous clusters are coupled with the creation of a lean centre through cost-saving initiatives and increased efficiency at a group level. 

This is central to unlocking value, with R2.5 billion in cost savings identified for implementation by the end of the 2027 financial year.

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

“Our big levers to pull to get us to achieve our targets are relatively simple. They are costs, new business volumes, persistency, and customer traction with the bank,” Strydom said. 

“Those are the four big things that make up the work we have to do to execute on our strategy.”

In particular, in South Africa, the key focus is to increase the competitiveness of the business to generate growth and unlock value, with all the levers already existing. 

“OM Bank is, I would say, a very particular opportunity for us to contest that banking pool. So, I would put that in a separate category in South Africa,” Strydom said. 

“If you look geographically at the business in Africa, we have said that we need to earn the right to deploy capital into new geographies, and we will honour that.” 

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.

“If you look at the returns we are currently achieving, we need to improve those, get the margins up, and that gives us the right to then invest further into new businesses or countries,” Strydom said. 

The sheer scale of Old Mutual is one of the reasons why Strydom is so excited by the opportunity to be CEO of the 180-year-old insurer. 

“I just think the breadth and depth of the business is amazing. It touches every corner of the economy, from mass markets and funeral products to lending and private equity,” he said. 

“And then across the continent as well, it is just extraordinary. I love challenges. I love interesting problems. I love opportunities, and there is no shortage of them in this group.”