Old Mutual Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Old Mutual is an international insurance, savings, and wealth management company, headquartered in London, with recognized brands in South Africa, the United States, the United Kingdom (UK), Europe, Latin America, India, China, and Australia.

Old Mutual was founded as the Mutual Life Assurance Society of the Cape of Good Hope in South Africa in the British Cape Colony in 1845, and demutualized on July 12, 1999. Old Mutual’s stock is listed (with percentage of shares in parentheses) on the London Stock Exchange [LSE] (64.69), the Johannesburg Stock Exchange [ JSE] (31.52), the Zimbabwe Stock Exchange [ZSE] (1.64), the Namibian Stock Exchange [NSE] (0.29), and the Malawi Stock Exchange [MSE] (0.1). The company has American Depository Receipts (ADRs) available through the Bank of New York. The company is organized around four customer-centered global regions: North America, Europe and Latin America, South Africa, and Asia Pacific.

The company follows a philosophy of decentralization to allow each of its units to react quickly to local economic market conditions and regulation. Recognizing changes in demographics, lifestyles, and wealth management, the company has positioned itself to shift from life products to open-architecture (investment funds run by third-party fund managers) unit trusts and mutual funds with lower front-end charges.

Old Mutual’s North American operations are in the United States, Canada, and Bermuda. In the United States, Old Mutual’s asset-management brands and boutique affiliates include Old Mutual Asset Managers; Old Mutual Capital; Acadian Asset Management; Barrow, Hanley, Mewhinney & Strauss, Inc.; Dwight Asset Management Co.; Rogge Global Partners; The Campbell Group; Ashfield Capital Partners; Analytic Investors; Clay Findlay; 2100 Capital Group; Copper Rock Capital Partners; Heitman; ICM; Larch Lane Advisors; Liberty Ridge Capital; Lincluden; Provident Investment Counsel; Thompson Horstmann & Bryant; and Thompson, Siegel & Walmsley Investment Management. In North America, the company’s life insurance brands are Old Mutual Financial Network and Old Mutual Bermuda. Old Mutual Bermuda alone accounts for 25 percent of all funds managed by Old Mutual. The North American region accounts for £170.1 billion of funds under management by Old Mutual.

In 2006 Old Mutual acquired Skandia, an insurance (Skandia Life), internet banking (SkandiaBanken), and financial services (Selestia Investment Solutions) firm based in Sweden that expanded its scope of operations by 20 countries. Old Mutual’s UK, Nordic, European, and Latin American operations are in the UK, Sweden, Norway, Finland, Denmark, Switzerland, Austria, Poland, the Czech Republic, the Netherlands, France, Germany, Hungary, Italy, Portugal, Spain, Colombia, Mexico, and Chile. In Europe, Old Mutual’s asset management brands include Old Mutual and Palladyne. The Europe and Latin America region accounts for £60.6 billion in funds under management by Old Mutual.

Old Mutual’s operations in southern Africa are in South Africa, Botswana, Kenya, Malawi, Namibia, and Zimbabwe. The operations in southern Africa include asset management, life insurance, banking, and general insurance. The company’s asset management brands in this region include Old Mutual Investment Group, Marriott Income Specialists, SYmmETRY, and Umbono Fund Managers.

Old Mutual’s banking group, Nedbank Group Ltd. (Nedbank Retail, Nedbank Capital, Nedbank Corporate, and a 50.1 percent interest in Imperial Bank), has assets of some 489 billion Rand and operates branches in South Africa, Lesotho, Malawi, Namibia, Swaziland, and Zimbabwe. Old Mutual has a 75 percent interest in a general insurance company, Mutual & Federal (M&F), which provides automobile, fire, property, and casualty insurance in South Africa, Namibia, Botswana, and Zimbabwe. Old Mutual plans to sell its interest in M&F to Royal Bafokeng Holdings. The South Africa region accounts for 41.7 billion Rand of funds under management by Old Mutual.

Old Mutual’s Asia Pacific operations are in Australia, India, Hong Kong, and China. In India, Kotak Mahindra Old Mutual Life Insurance Ltd. (KMOM) is part of a joint venture (26 percent interest) with the Kotak Mahindra Group. KMOM currently operates 106 branches in 74 cities throughout India. In China, Skandia BSAM is part of a joint venture (50 percent interest) with the Beijing State-owned Asset Management Co. (BSAM). Skandia BSAM is authorized to operate in Beijing, Shanghai, Jiangsu Province, and Guangdong Province. The Asia Pacific region accounts for £6.5 billion in funds under management by Old Mutual (£6.4 billion in Australia alone).

Total assets under management in fiscal 2007 were approximately £279 billion. Total assets under management were derived from the United States (61 percent), Europe (22 percent), southern Africa (15 percent), and the rest of the world (2 percent). In fiscal 2007, Old Mutual delivered a European Embedded Value (EEV) adjusted operating profit from its longterm business of about £1,621 million and an International Financial Reporting Standards (IFRS) adjusted operating profit about £1,624 million.

Operating profits by region for 2007 were as follows: 70 percent from southern Africa operations (£1,254 million), 15 percent from Europe and Latin America operations (£268 million), and 15 percent from operations in the United States (£260 million).

Bibliography:

Old Mutual, oldmutual.com (cited March 2009);
Old Mutual South Africa, www.oldmutual.co.za (cited March 2009).

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