No split for Old Mutual’s local business
Old Mutual Namibia says local operations will not be affected by London headquartered Old Mutual Plc’s decision to implement a management separation process.
The insurance giant announced in March that it would split its businesses into Nedbank, Old Mutual Asset Management, Old Mutual Emerging Markets and Old Mutual Wealth (OMW).
But in an interview with the Windhoek Observer this week, Old Mutual Namibia Spokesperson Quinten Potgieter said the development, which Old Mutual PLC says is progressing well, will not have a direct impact locally as the Namibian operations will continue to be part of the Old Mutual Emerging Markets business.
“There is no change. They continue with their existing local operational structures and local boards as part of the Old Mutual Emerging Markets business,” Potgieter said.
According to the group’s plan, which aims to reduce the holding company’s debt through asset disposals, Old Mutual Plc will retain mainly the Old Mutual Emerging Markets (OMEM) business by unbundling its United States and United Kingdom operations, among others.
The insurance group will also cede a portion of 54.1 percent shareholding in banking group, Nedbank, to a newly-created South African holding company, which will be used to distribute Old Mutual group’s shareholding in Nedbank to shareholders on the register of the new South African holding company.
This would leave Old Mutual Emerging Markets (OMEM) as the principal business within that group.
Old Mutual Emerging Markets operates in 18 countries across Asia, Africa and Latin America, namely Botswana, China, Colombia, Ghana, India, Kenya, Malawi, Mexico, Namibia, Nigeria, Rwanda, South Africa, South Sudan, Swaziland, Tanzania, Uganda, Uruguay and Zimbabwe.
Speculation has been rife that the business split my benefit locals through the separate listings of the group’s Namibian interest on the Namibian Stock Exchange to allow the participation of locals in the business, with Nedbank Namibia recently revealing that it would consider a local listing, but Potgieter said the company is still weighing its options.
“The Old Mutual Namibia Group is looking at all various options in preparation of the enactment of the New Equitable Economic Empowerment Framework (NEEEF),” he said.
Commenting on the local operations performance, the Old Mutual Namibia Spokesman said the company’s short-term business has been negatively affected by the economic slowdown, which has seen consumer disposable incomes dwindling and government spending significantly reduced on items such as cars, among others, were it draws most of its businesses.
“Our short term protection offering has been negatively impacted in line with the general slowdown as manifested by lower sales of assets (buildings, vehicles, equipment, furniture etc.) that require protection.
“While the economic slowdown is most definitely felt by all Namibians, our efforts to partner and advise customers in a way that meets their expectations while considering their individual unique circumstances and our ability to tailor our products offering with flexible benefits and affordable pricing has allowed our valued customers to retain their savings and risk products.”
The Old Mutual unit’s challenges come as the local insurance sector is poised for tough times ahead, with financial services industry regulator, the Namibia Financial Institutions Supervisory Authority (Namfisa) warning early in the year of the negative impact of a slowing economy and rising inflation on the sector.
The country’s economy is expected to slow down to 4.3 percent this year, before rising to 5.9 percent in 2017 according to the Namibia of Namibia.