By Adelaide Changole.
Old Mutual said profit declined for the first time since 2022 as risk-off sentiment from conflicts in the Middle East curbed investment returns at Africa’s biggest insurer by assets.
Adjusted headline earnings fell 30% to R2.95 billion ($184 million) in the six months through June, while the Johannesburg-based company declared an interim dividend of 40 cents per share.
US-Iran tensions since February disrupted seaborne traffic through the Strait of Hormuz, lifting the costs of energy and fertilisers and fuelling prices.
The increase in import costs saw annual inflation in Old Mutual’s biggest market, South Africa, accelerate at the fastest pace in two years in June to 5%, before easing to 4.3% in July. A protracted conflict makes it less likely that it will return to the central bank’s 3% target as quickly as policymakers had suggested before the escalation.
Old Mutual Chief Executive Officer Jurie Strydom, who took the helm in June, has made improving the profitability of new insurance policies, measured by the value of new business margin, a priority.
Value of new business rose 32% in the period, helping lift the margin by 10 basis points to 1.4%. That remains below the company’s target range of 2% to 3%. Group equity value increased 4% to R20.66 per share.
The board has approved a further R1 billion buyback as it seeks to enhance shareholder returns. Old Mutual has spent R5.5 billion purchasing stock since 2023.
The company has named Ranen Thakurdin as its group chief financial officer-designate, effective January 1. He will succeed Casper Troskie, who is retiring on April 30, 2027.
Old Mutual — founded in Cape Town in 1845 — has struggled with client retention in South Africa amid competition on products such as credit insurance and funeral plans from lenders including Capitec Bank Holdings.
To grow its South Africa business, the company restructured its life and savings segment in 2025.
The new unit now includes the Old Mutual SuperFund — South Africa’s largest commercial multi-employer retirement fund, with more than 5 730 firms participating and a wealth-management business overseeing R640.3 billion by June, 37% more than a year earlier.
The units helped drive the insurer’s gross flows up 21%.
Meanwhile, Old Mutual has invested more than R4 billion into its new bank, which it opened to the public late last year. The insurer plans to spend a further R2 billion to fund its rollout in 2026 and 2027.
The country’s newest lender is expected to make losses of as much as 1.3 billion in its first year and reach monthly break-even by 2028. It has 742 000 customers, compared with 284 000 in 2025, and R1.38 billion in deposits.
Beyond South Africa, the insurer is assessing operations.
It has closed life and general insurance operations in Nigeria and Tanzania and plans to exit South Sudan. It’s now looking at operations in China, East Africa and West Africa to ensure they lift returns.