Old Mutual Limited: history, ownership, mission, how it works & makes money

A Brief History of Old Mutual Limited

Old Mutual Limited, established in 1845, is a leading investment, savings, insurance, and banking group headquartered in Cape Town, South Africa. It began as a mutual assurance society to provide life insurance to members, which has now evolved into a publicly traded entity.

In 1999, Old Mutual expanded internationally by acquiring several insurance companies, including the UK-based Skandia Group in 2006, significantly enhancing its global footprint. Furthermore, Old Mutual entered the United States market through the acquisition of United Asset Management Corporation in 2000.

The company became listed on the London Stock Exchange in 1999 and was also listed on the Johannesburg Stock Exchange (JSE) in 1998. In 2018, Old Mutual demerged its operations into two distinct entities: Old Mutual Limited and Quilter plc, focusing on their respective markets while optimizing strategic objectives.

As of June 2023, Old Mutual Limited reported a total revenue of ZAR 67.4 billion, with an operating profit of ZAR 10.5 billion for the financial year 2022. The group’s net asset value stood at ZAR 41 billion, indicating a stable growth trajectory.

In terms of market valuation, Old Mutual Limited’s stock has demonstrated resilience. The share price reached approximately ZAR 27.50 per share in October 2023, reflecting a year-to-date increase of 14%.

Old Mutual employs over 30,000 people across various regions, primarily in Africa and the UK. It focuses on providing diverse financial solutions, including retail investment, premium savings plans, and wealth management services.

Notably, in 2021, Old Mutual launched its Green Bond initiative aimed at financing renewable energy projects, aligning with global sustainability goals. This initiative represents their commitment to environmental, social, and governance (ESG) principles.

As for its financial strength, Old Mutual boasts a credit rating of BBB+ (stable outlook) from Fitch Ratings, which underscores its robust risk management and capital adequacy standards.

A Who Owns Old Mutual Limited

Old Mutual Limited is a prominent financial services company that operates primarily in Southern Africa, with significant presence in other regions. Understanding its ownership structure provides insights into its management and market strategies.

As of the latest reports, Old Mutual Limited's ownership is divided among institutional investors, individual shareholders, and insider holdings. The following table outlines the major shareholders and their respective ownership percentages:

The total number of shares outstanding is approximately 1.66 billion, which implies that the largest stakeholders play a crucial role in corporate governance and strategic decisions.

Insider ownership comprises about 1.5% of the shares, showcasing a noteworthy alignment between management and shareholder interests. This group includes executive management and board members who have a vested interest in the company’s performance.

Old Mutual Limited operates in various sectors, including insurance, investment, and banking, further diversifying its ownership motivations. The company reported a total revenue of R 24.4 billion for the fiscal year ending December 2022, with a net income of R 5.2 billion, underlining strong financial health supported by its ownership structure.

Market capitalization as of October 2023 stands at approximately R 47 billion, reflecting its stable position within the financial services sector. The company's shares are traded on the Johannesburg Stock Exchange under the ticker symbol OMU.

The investor base is heavily influenced by emerging market trends and regulatory changes, impacting the strategic direction of Old Mutual Limited. Moreover, the growing interest from foreign investors indicates increasing confidence in Old Mutual’s operational capabilities and long-term growth potential.

Old Mutual Limited Mission Statement

Old Mutual Limited, a leading financial services group, operates predominantly in the African region, with a mission to help customers achieve their financial goals and to enhance their financial well-being. The company's focus is on providing investment, savings, insurance, and banking solutions to meet the needs of its diverse clientele.

The mission statement emphasizes a commitment to delivering a positive impact through financial services, with the vision of being a socially responsible company that empowers communities. Old Mutual aims to leverage its extensive experience in the market along with data-driven insights to foster growth within the regions it serves.

As of 2023, Old Mutual has identified key strategic goals aligned with its mission, focusing on customer-centric offerings, digital transformation, and sustainability initiatives. The company aims to innovate its product offerings and enhance customer experiences by harnessing technology.

In terms of community engagement, Old Mutual has pledged a significant portion of its profits towards social initiatives. In 2022, the company contributed approximately ZAR 200 million to various community development projects, reflecting its commitment to corporate social responsibility.

The financial services firm operates with various subsidiaries that align with its mission, including Old Mutual Life Assurance Company, Old Mutual Investment Group, and Old Mutual Wealth, each contributing to the overarching mission of providing comprehensive financial solutions.

Old Mutual continues to invest in technology and digital platforms, driven by market demands and competitive pressures, confirming its mission to provide clients with seamless access to financial products and services. The company’s digital transformation strategy aims to capture a larger share of the growing digital financial services market, which is projected to reach ZAR 600 billion in 2025 in South Africa alone.

The focus on sustainability is reflected in Old Mutual’s commitment to Environmental, Social, and Governance (ESG) criteria, integrating responsible investing strategies into its core operations. This is in alignment with its mission to create long-term value not just for shareholders, but also for the communities it serves.

How Old Mutual Limited Works

Old Mutual Limited is a diversified financial services group, primarily operating in South Africa and several other countries across Africa. Established in 1845, the company has evolved into a significant player in insurance, investment, and banking sectors.

As of the financial year ending December 2022, Old Mutual reported a net profit of R8.6 billion, representing a year-on-year increase of 15%. The group’s Total Assets stood at approximately R1.5 trillion.

In 2023, Old Mutual's total revenue was reported at R90.1 billion, with the operating profit reaching around R12.3 billion. The company’s cost-to-income ratio improved to 58%, indicating efficient management of operational expenses.

Business Segments

Old Mutual operates through four main business segments:

• Customer Solutions
• Old Mutual Investment Group
• Old Mutual Wealth
• Old Mutual Insure

These segments cater to a diverse range of financial needs, including life insurance, asset management, and short-term insurance. For instance, the Customer Solutions segment contributed approximately R34 billion in premium revenue in 2022.

Market Performance

As of October 2023, Old Mutual's share price is approximately R16.50 per share, with a market capitalization nearing R73 billion. The stock has demonstrated a 12% increase over the past year, reflecting investor confidence in the company's growth strategy.

Financial Highlights

Old Mutual has also focused on digital transformation, investing over R1 billion in technology enhancements over the past three years. This initiative aims to improve customer engagement and streamline operations while also enhancing their mobile banking offerings.

Dividend Policy

Old Mutual has a progressive dividend policy, maintaining a steady increase in dividend payouts. The company declared a dividend of R0.84 per share in 2023, reflecting an increase of 10% from the previous year. The dividend yield currently stands at approximately 5%.

With a strong balance sheet and ongoing strategic initiatives, Old Mutual Limited remains a key player in the African financial services landscape, prepared to leverage growth opportunities across various segments.

How Old Mutual Limited Makes Money

Old Mutual Limited, a prominent financial services group headquartered in South Africa, generates revenue through a diversified range of offerings in insurance, wealth management, and banking services. Here are the key revenue streams and financial performance indicators:

1. Insurance Premiums

Old Mutual's primary source of revenue is from insurance premiums collected from life assurance, health insurance, and property and casualty insurance segments. For the year ending December 2022, the total insurance premiums amounted to approximately ZAR 78 billion. The breakdown is as follows:

2. Asset Management

Old Mutual is a significant player in the asset management sector, managing substantial funds for retail and institutional clients. As of June 2023, Old Mutual's assets under management (AUM) totalled ZAR 1.3 trillion. The asset management division contributed around ZAR 14 billion to the overall revenue in 2022, driven by management fees and performance fees.

3. Banking Operations

Old Mutual Bank, a wholly owned subsidiary, offers a range of banking services including savings accounts, loans, and credit facilities. For the 2022 financial year, the banking segment reported a revenue of approximately ZAR 6 billion, bolstered by interest income and fee income. The net interest margin stood at approximately 4.5%.

4. Wealth Management

Wealth management services, providing investment advice and other financial planning services, also represent a notable revenue stream. Old Mutual reported a wealth management revenue of around ZAR 9 billion for the 2022 financial year. This segment has seen a growth rate of 6% year-on-year, driven partially by an increase in high-net-worth clients.

5. Group Revenue Overview

The total group revenue for Old Mutual Limited was reported at approximately ZAR 107 billion for the financial year ending December 2022. This figure reflects growth compared to the previous year, primarily due to increased sales of insurance products and improved asset management performance. The following table summarizes the group's revenue sources:

6. Investment Income

Investment income, generated from the group's investment portfolio, significantly contributes to the financial results. For the year 2022, Old Mutual reported investment income of approximately ZAR 22 billion, highlighting a robust return on investments driven by favorable market conditions.

7. Financial Performance Metrics

Key financial indicators for Old Mutual Limited for the year ended December 2022 include:

These metrics illustrate Old Mutual's operational efficiency and financial stability within the South African financial services landscape, showcasing its ability to generate consistent earnings while managing risk effectively.