Old Mutual lobbied hard for its shareholders to accept its managed separation, which was approved barely a month before the proposed split into two listed entities — the UK-based Quilter listing on Monday June 25 and the Africa-based Old Mutual Ltd on Tuesday June 26. Somewhat bizarrely, Old Mutual Plc will become a subsidiary of Old Mutual Ltd, though it will remain a British company with board meetings in London. And the liabilities connected to the failed Bermuda operation remain on the books.
The company hopes to see the highest boost from East Africa, which has had annualized growth of 5.5% over three years. There has been an increase in insurance sales through mobile devices, which have spread from 45% to 80% of the African population since 2010. Even a comparatively developed economy such as Kenya has an insurance penetration of only 2.8% of GDP (compared with 17% in SA). But it has not been easy to build a sustainable business in the region. The company made a R61m loss; its acquisition of the UAP insurance business was supposed to add scale but has instead brought interminable restructuring. Old Mutual has at least always had some brand presence in East Africa. It is a complete unknown in West Africa. However, it is determined to get a foothold in Ghana and Nigeria — Ghana has insurance penetration of just 1.1%, and Nigeria at 0.3% could have astonishing potential.
Original Post on BusinessLive.