Old Mutual Essay

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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).


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

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