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Old Mutual has delivered higher earnings in the first half of the year as both life annual premium equivalent (APE) sales and gross flows grew by a fifth.The group said on Tuesday that results from operations per share increased 11% to 126.3c, supported by positive growth in Old Mutual Life and Savings earnings and strong contributions from Old Mutual Investments and Old Mutual Africa Regions.This was partially offset by lower underwriting earnings in Old Mutual Insure relative to the strong prior period and investments to scale Old Mutual Banking. Results from operations were up 7% at R5.28bn.Life APE sales and gross flows both grew by 21% while the value of new business was up 32% at R569m. The group attributed the result to strong sales growth, continued cost discipline and improved persistency experience. The increase in Life APE sales was mainly driven by strong group risk and annuity sales in Old Mutual Corporate, higher living annuity and endowment sales in Wealth Management, as well as strong retail and corporate sales growth in Old Mutual Africa Regions, it said.Excluding some large Old Mutual Corporate risk sales secured in the current period, which are not expected to recur at the same level in the second half of the year, Life APE sales increased by 12%.The value of new business increased by 32%, while the value of new business margin improved by 10 basis points, supported by higher sales volumes and a more profitable business mix in Wealth Management, Old Mutual Corporate and Old Mutual Africa Regions. “This was achieved despite continued industry-wide pressure on guaranteed annuity volumes in Personal Finance,” the group noted.Gross flows increased by 21%, primarily driven by strong inflows in Wealth Management, particularly into the local platform business and the inclusion of 10X Investments. In Old Mutual Africa Regions, growth was driven by strong money market inflows in Malawi and improved unit trust flows in East Africa.Gross loans and advances remained stable year on year. Gross written premiums increased by 3% supported by growth in Old Mutual Insure, partially offset by the effects of currency movements and lower renewals as a result of underwriting management actions in Old Mutual Africa Regions, it said.An interim dividend of 40c per share was declared, representing growth of 8%. The board has approved a further R1bn share buyback. This follows the completion in May of its previous R3bn programme. The group said it delivered cumulative cost savings of R936m against the 2024 expense base and is on track to achieve its cost savings target of R2.5bn by the end of 2027. Customer acquisition and deposit growth in OM Bank “continued to track well during the period”, it said, with customer numbers increasing to 742,000 and retail deposits increasing to R1.4bn.“Leveraging the group’s distribution footprint and integration opportunities supports our pathway to profitability by financial year 2028,” it said. “We are on track to deliver on our medium-term targets.”Old Mutual said South Africa’s gradually improving fiscal position and sovereign credit rating trajectory supports a positive macro backdrop. “Across Old Mutual Africa Regions, growth prospects are broadly constructive and inflation trends are moderating in most markets, while Malawi continues to experience inflationary and currency pressures.”The group’s strong first-half sales volumes include some large non-recurring gains, and sales growth is likely to moderate over the second half, it said.The group also announced the appointment of Ranen Thakurdin as CFO designate of Old Mutual and Old Mutual Life Assurance Company (South Africa) from January 1. He will succeed Casper Troskie as group CFO, subject to regulatory approval.Thakurdin, who is currently the group chief risk officer and a member of the executive committee, joined Old Mutual in 2018 and has held several senior leadership positions across the group’s finance and risk functions.He will work alongside Troskie before formally assuming the role of group CFO in April. Troskie will retire at the end of April.Business Day
