Old Mutual posts improved performance, credits better profits

  • Profits in the Mass and Foundation Cluster were up
  • The non-repeat of COVID-19 business interruptions  and rescue claims contributed to improved profits
  • Gross flows increased to R146.63 million
  • Loans and advances were however, 10% down

Harare – JSE-listed financial services giant, Old Mutual Limited says its results from operations are above the prior year for the period ended 30 September 2021, driven by improved profits in the Mass and Foundation Cluster.

In a voluntary operating update, Old Mutual said the improvement in profits in Mass and Foundation Cluster resulted from strong risk sales and improved credit experience due to a deliberate focus on tightening of credit criteria and more selective offers to customers in Old Mutual Finance.

“The non-repeat of significant mark to market losses that occurred in the prior year and higher asset-based fees in Old Mutual Investments positively impacted profits.

“The non-repeat of the significant level of COVID-19 business interruption and rescue claims from the prior year as well as the release of Credit Guarantee Insurance Corporation (CGIC) reserves in Old Mutual Insure further contributed to improvement in profits,” the Group said.

The Group’s sales momentum continued into the third quarter compared to the same period in the prior year, which was impacted by the lockdown period, with Life APE Sales up 18%

“Current year sales benefited from strong risk sales in Mass and Foundation Cluster as productivity levels continue to gradually lift from prior-year levels as well as higher risk and guaranteed annuity sales in Personal Finance driven by the recovery in single and recurring premium sales,” the Group added.

Gross flows for the period were up 7% to R146.63 million from a comparative of R137.44 million recorded in the same period last year due to good flows from single premium annuity sales in Personal Finance and strong flows in Wealth Management’s platform resulting from improved rates on the fixed bond products.

Growth was also witnessed in the Group’s gross written premiums as they improved by 7% to R15.1 million from R14.09 million supported by growth experienced across all lines of business except for the commercial and agricultural portfolio in Old Mutual Insure.

“Good customer retention, pleasing acquisition rates and economic activity, as well as new business sales, contributed to growth in gross written premium for the rest of Africa,” the Group said.

Old Mutual, however, recorded a 10% decline in loans and advances to R18.1 million owing to a decline in disbursements due to tightening of credit criteria in the prior year in Old Mutual Finance that has resulted in better credit experience as the Group manage its risk appetite in the current environment.

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