Old Mutual happy on its new path after separation
CEO Peter Moyo says the business can now focus on growing value in optimal environments
With the sale of its Latin American business finalised earlier in April, Old Mutual is now set on a new path and positioned exactly where management wanted it to be when it initiated the managed separation process, says CEO Peter Moyo.
Moyo, who has been at the helm for almost a year, told Business Day the company is well capitalised, having received the proceeds of the Latin American sale, but is going to focus for now on making its existing businesses more competitive.
The sale of the Latin American operations, which included Old Mutual Colombia, Old Mutual Mexico and Latin American investment adviser Aiva, was completed on April 1. The company is now left with operations in 13 African countries and a joint venture in China, Old Mutual Guodian.
It still has some exposure to London but Moyo said this is “very small”.
“The business is today optimally set for what we’ve always wanted,” he said. “We are in the countries where we believe we know how to manage the exposure, how we will grow the business and how we will deploy capital. What drives us is not the number of countries we operate in. Our focus is on how we can grow shareholder value and bring very decent returns to shareholders,” he said.
After listing in London in 1999, Old Mutual ambitiously expanded across multiple geographies and had the biggest presence in the rest of Africa compared to other local insurers. Sanlam has now taken the crown as the biggest pan-African insurer after the acquisition of Moroccan insurer Saham Finances.
Moyo said Old Mutual is happy with its existing footprint on the continent and remains committed to all 13 countries, including Zimbabwe.
“Zimbabwe is managed by a team that is doing a very good job under very difficult circumstances. Our business in Zimbabwe is doing very well. However, the challenge we have faced is the valuation of the functional currency and how we translate that into rands. But that has now been resolved. We are committed to being in that market,” said Moyo.
As for giving Old Mutual a competitive edge in SA, Moyo said the group will launch a new product soon.
“We are putting out possibly the best life insurance solution in the market pretty soon. It’s a new way of doing business that is going to be much easier for our customers,” said Moyo.
Old Mutual is also investing heavily in technology to increase its market share, especially in the personal finance space where it has been experiencing fund outflows while also struggling to grow life insurance sales. The insurer now has 34 products it is able to sell directly online after deploying 64 robo-advisers in its business in 2018.