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Annual Report 2023

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INTEGRATED REPORT 2023 For the year ended 31 December 2023 DO GREAT THINGS EVERY DAY About our report Our Integrated Report is supplemented by a suite of online publications and information. These reports can be accessed on our corporate website. When read with the reporting suite, this Integrated Report provides information aimed at meeting the needs of providers of capital. Our reporting suite Old Mutual 2023 Reports INTEGRATED REPORT 2023 For the year ended 31 December 2023 CORPORATE GOVERNANCE REPORT 2023 For the year ended 31 December 2023 REMUNERATION REPORT 2023 For the year ended 31 December 2023 SUSTAINABILITY REPORT 2023 For the year ended 31 December 2023 CLIMATE REPORT 2023 For the year ended 31 December 2023 TAX TRANSPARENCY REPORT 2023 For the year ended 31 December 2023 ANNUAL FINANCIAL STATEMENTS Consolidated and separate For the year ended 31 December 2023 DO GREAT THINGS EVERY DAY DO GREAT THINGS EVERY DAY DO GREAT THINGS EVERY DAY DO GREAT THINGS EVERY DAY DO GREAT THINGS EVERY DAY Integrated Report Corporate Governance Report Remuneration Report Sustainability Report Climate Report Tax Transparency Report Annual Financial Statements Our Integrated Report provides a balanced view of our value creation story. It shares our strategic journey to becoming our customers’ first choice to sustain, grow and protect their prosperity. Although primarily aimed at our providers of capital, it will be of interest to all stakeholders invested in understanding our unique value creation story. Our Corporate Governance Report provides an overview of Old Mutual’s approach to corporate governance. The report focuses on how we do business in accordance with sound governance practices, which are informed by the highest ethical standards, integrity, transparency and accountability. The report will be of interest to investors, regulators and analysts. Our Remuneration Report provides insight into how we address remuneration-related activities and disclosures and reflects how our rewards purposefully align performance outcomes with shareholder interests, while balancing our need to be an attractive employer. The report is of interest to investors, employees, regulators and analysts. Our Sustainability Report reflects on our sustainability journey, sharing insights into how we manage our most significant environmental, social and governance (ESG) risks and opportunities. The report will be of interest to investors, analysts and a wide range of stakeholders. Our Climate Report contains information about the Group’s climate- related activities, policies, governance, strategy, risk management, metrics and targets. The report provides information that enables stakeholders to assess our progress in our climate adaptation journey. The report will be of interest to all our stakeholders. Our Tax Transparency Report concisely outlines our tax philosophy, communicates how the tax strategy is interconnected to the Group strategy and demonstrates our commitment to being a responsible taxpayer. The report is of interest to regulators, investors and analysts. Our Annual Financial Statements contain information relating to the Group’s financial position and performance. The consolidated and separate financial statements were audited in terms of the Companies Act, 71 of 2008 (as amended) (Companies Act). The report is of interest to investors, analysts, regulators and other stakeholders. Enquiries Investor relations Langa Manqele T: +27 (0)82 295 9840 E: investorrelations@oldmutual.com Communications Wendy Tlou T: +27 (0)83 301 9663 E: oldmutualnews@oldmutual.com Application of the King IV principles statement The application of the King Report on Corporate Governance™ for South Africa, 2016 (King IV)1 principles statement is a comprehensive index in our Corporate Governance Report. It details our arrangements, processes and systems for governing and managing various areas of the organisation to achieve the required governance outcomes. The statement confirms the application of the King IV principles as required by the Johannesburg Stock Exchange (JSE) Listings Requirements. Our design theme for the 2023 annual reporting suite is centred around movement and progression in modern Africa with our insights depicted as a guiding light for our customers in uncertain times. Our imagery alludes to the embodiment of development, speed and success in embracing technological advancements while maintaining a human touch when creating, executing and delivering growth across all our operating regions. 1 Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved 1 Integrated Report 2023 About our report continued Approval The Old Mutual Limited (Old Mutual or the Group) Board of directors (Board) acknowledges its responsibility for ensuring the integrity of this Integrated Report and confirms that the report is presented in accordance with the International Integrated Reporting Framework. The Board has considered the operating context, strategy and value creation business model. This report addresses all issues that are material to or that could materially affect Old Mutual’s ability to create value. In the Board’s opinion this report fairly presents the Group’s integrated performance. The Board confirms that the Group complies with the provisions of the Companies Act relating to its incorporation and operates in conformity with its Memorandum of Incorporation. The Board approved this report for release on 27 March 2024. Defining value Value creation is the result of how we apply and leverage our resources and strategy in delivering financial performance and positive outcomes for our stakeholders. We focus on improving the quantum of the value delivered for each of our stakeholders and the quality of the experiences. List of Board members: Independent Non-executive Directors Trevor Manuel (Chairman) Prof Brian Armstrong Albert Essien Olufunke Ighodaro Itumeleng Kgaboesele Jaco Langner John Lister Dr Sizeka Magwentshu-Rensburg James Mwangi Nomkhita Nqweni Busisiwe Silwanyana Jurie Strydom Stewart van Graan Non-executive Directors Thoko Mokgosi-Mwantembe Executive Directors Iain Williamson (Chief Executive Officer) Casper Troskie (Chief Financial Officer) Integrated thinking Our approach to embedding integrated thinking in our organisation is continuous and takes into account the relationship between the resources and capitals we use to create value and the potential trade-offs inherent in our strategic choices. We strive to report transparently, reflecting value created, preserved and eroded. By understanding how these values interact we are able to deliver sustained growth in the short, medium and long term for all our stakeholders. How we consider materiality and material matters Our Integrated Report aims to provide our current and prospective shareholders and other stakeholders with the information they need to assess Old Mutual’s ability to adapt to change, its resilience in the face of existing and potential challenges and its ability to create or preserve value over time. We conduct an annual materiality determination process to identify and assess the information and material matters to include in our Integrated Report. We consider double materiality, which recognises that external factors can impact our business and our business can impact society and the environment. Identify We identify relevant information and material matters based on previous reports, feedback from engagements with key stakeholders, internal documentation, global searches, peer benchmarking and reviews of external and industry information. In determining material information which might impact the Group, we consider these external and internal factors: 1. The operating context, including the macroeconomic and socio-political environment in which we operate, evolving industry trends and regulatory changes 2. Our Risk Management Framework and our top risks and opportunities 3. Stakeholder expectations 4. Strategy and strategic objectives Prioritise We analyse and distil the information identified and we rank material information according to its relevance in the current context considering the potential likelihood and impact on our sustainability and resources on which we rely. We also consider factors that are material to our short, medium and long-term value creation. Our material matters are: Macroeconomic and socio-political environment Changing customer expectations and needs Talent management Climate change Technological disruption Regulatory requirements Refer to operating context on pages 38 to 45 for more detail on our material matters Approve The material matters disclosed in this report are approved by: » Non-financial Key Performance Indicators Steering committee1 » Executive committee » The Board The Board Risk committee assesses and approves the top 10 risks. Reporting Our report covers those issues that have the potential to significantly impact the Group’s performance, its ability to generate sustainable shared value and influence our strategy and business model in managing and responding to risks and opportunities. This information is expected to change over time as the macroeconomic environment changes, new trends develop and the needs and expectations of our stakeholders evolve. 1 The Non-financial Key Performance Indicators Steering committee is a forum sponsored by the Chief Financial Officer and attended by relevant executive members. The Steering committee is mandated to approve the non-financial key performance indicators that have been identified by the various working groups for the purposes of business planning, monitoring and reporting externally. The committee also governs the working groups and escalates matters arising from the working groups to the executives 2 Integrated Report 2023 About our report continued Integrated reporting process Our Integrated Report was prepared using content and insights from Executive committee discussions, Board papers, business plans and reporting information requirements of the International Integrated Reporting Framework. Thematic working groups under the supervision of their respective executive members representing our segments and subject matter experts produced the content that is disclosed in this report. The Group Executive committee contributes towards the content and are involved in various approval processes which include a cross-review of content across the reporting suite and final approval. The Board provides final sign-off for the publication of the report. Our 2023 Integrated Report Reporting scope and boundary Reporting period This report covers the activities of the Group for the period 1 January 2023 to 31 December 2023. Any material events after this date and up to the Board approval date of 27 March 2024 are included. All data is at 31 December 2023 unless otherwise specified. Operating activities We report on the primary activities of the Group. Our financial and non-financial reporting boundary aligns with our financial statements boundary and includes the Group, our operating subsidiaries, joint ventures, and key associates. Due to hyperinflation in Zimbabwe and the barriers to access capital by way of dividends, we exclude the results of the Zimbabwe business from adjusted headline earnings. Financial and non-financial reporting Our report includes financial and non-financial information: Reporting frameworks » Integrated Reporting Framework (2021) » King IV » JSE Listings Requirements for debt and equity issuers » Companies Act » Insurance Act, 18 of 2017 Certain financial information included in this report was extracted from the audited consolidated annual financial statements, which were prepared in accordance with International Financial Reporting Standards (IFRS). Ensuring the integrity of our report The Board ensures the integrity of our report through our integrated reporting process and various levels of sign-off and approval by Group executives, Board committees and ultimately the Board. The Board relies on our combined assurance model which is overseen by the Audit committee that assures aspects of our business operations and reporting. These assurances are provided by management, Group internal audit and independent external sources. The financial information disclosed in the report has been assured by our external auditors. Governance (pages 16 to 28) Stakeholders’ value creation and business model (pages 29 to 37) Operating context (pages 38 to 45) Risk and opportunity management (pages 46 to 57) Performance against strategy (pages 58 to 72) Performance (pages 73 to 104) We have implemented changes to improve the presentation in this report. We continually improve and refine our non-financial data collation processes and definitions used when reporting. This may result in a re-presentation of prior year data for increased comparability. This will enhance the completeness and accuracy of the reporting of our non-financial data over time. Combined assurance Combined reviews by management and internal audit were performed to ensure the accuracy of our reporting content, with the Board and its sub-committees providing oversight. Although this report has not been audited, it contains certain information that has been extracted from the audited consolidated annual financial statements for the year ended 31 December 2023 on which an unmodified audit opinion has been expressed by the Group’s joint independent external auditors, Ernst & Young and Deloitte & Touche. Our Group internal audit provided limited assurance for non-financial information disclosures. Forward-looking statements This report contains certain forward-looking statements of Old Mutual Limited’s plans, goals and expectations relating to its future financial condition, performance and results, and estimates of future cash flows and costs. Words such as ‘believe’, ‘anticipate’, ‘intend’, ‘seek’, ‘will’, ‘could’, ‘may’, ‘project’ and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their nature, all forward-looking statements involve inherent risk and uncertainty because they are based on assumptions related to future events and circumstances which are beyond Old Mutual Limited Group’s and its affiliates’ control. These include economic and business conditions and market-related risks i.e., equity fluctuations, interest rates, inflation, and deflation. These circumstances could arise from the impact of competition, legislation, the policies and actions of regulatory authorities, and the timing and impact of any uncertain industry changes. Any forward-looking information contained in this report was not reviewed or reported on by Old Mutual Limited’s external auditors. The Old Mutual Limited Group and its affiliates undertake no obligation to update the forward-looking statements contained in this report and other related supplementary reports or any other forward-looking statements it may make. Nothing in this report shall constitute an offer to sell or solicitation of an offer to buy securities. Report navigation Strategic focus areas Holistic coverage of customer needs Distribution and digital engagement Operational efficiencies Strategic growth businesses Strategic growth markets Agile delivery driven by engaged employees Our stakeholders Investors Intermediaries Customers Communities Employees Regulators Six capitals FC Financial MC Manufactured HC Human IC Intellectual NC Natural SC Social and relationship Risk and governance Top risks Governance Navigation tools More information available online Information within this document Other reports within the reporting suite 3 Integrated Report 2023 CONTENTS Overview of the Group 2023 reflections Overview of our business 46 Risks and opportunities 47 Our approach to risks and opportunities 49 Risk management An established history for over 178 years 51 Top risks 5 6 7 8 9 The core of who we are 10 Our strategy 12 13 Sustainability Segments 15 Our values, culture and ethics 16 Governance overview 17 Message from the Chairman 19 Our Board 21 Board responsibilities 23 Board composition, tenure and skills 25 Message from the Chief Executive Officer 27 Our Executive committee 29 Our stakeholders and value creation 30 Our stakeholders 31 33 Stakeholder management Stakeholder value creation 36 Our value creation business model 38 Operating context 39 Material matters overview 40 Macroeconomic and socio-political environment Industry trends 41 44 Regulatory changes 58 Performance against strategy 59 Growing and protecting the core 64 Unlocking new growth engines 68 Agile delivery driven by engaged employees 71 Rewarding strategic performance 73 Group financial performance 74 Group highlights 75 Group financial review 77 Balance sheet and capital metrics Supplementary income statement 81 83 Group financial performance 84 Segment performance 85 Mass and Foundation Cluster 88 Personal Finance and Wealth Management 91 Old Mutual Investments 94 Old Mutual Corporate 97 Old Mutual Insure 101 Old Mutual Africa Regions 4 Integrated Report 2023 OVERVIEW OF THE GROUP In this section 2023 reflections Overview of our business An established history for over 178 years The core of who we are Our strategy Sustainability Segments Our values, culture and ethics 6 7 8 9 10 12 13 15 5 Integrated Report 2023 2023 reflections INVESTORS CUSTOMERS EMPLOYEES » 81c (2022: 76c) total dividends per share » 49c dividend per share on the Bula Tsela Scheme » 14% increase to R8.3 billion (2022: R7.3 billion) for results from operations » 11.1% (2022: 9.4%) return on net asset value » R1.3 trillion (2022: R1.2 trillion) in funds under management » 2.2 million (2022: 1.8 million) Old Mutual Rewards members » R120 million worth of Old Mutual Rewards points redeemed in 2023 » Old Mutual ranked strongest insurance brand and eighth strongest brand in South Africa in 2023 » Coolest insurance brand at the Sunday Times Next Gen Awards » 42% (2022: 42%) female senior managers » 55% (2022: 61%) black senior managers » Additional grant of 5.04 million Bula Tsela shares to employees INTERMEDIARIES REGULATORS COMMUNITIES » R119.7 million (2022: R100.3 million) invested in training intermediaries » 178% (2022: 188%) Group solvency » Level 1 broad-based black economic empowerment (B-BBEE) rating since 2019 » R18.5 million (2022: R15.3 million) in bursaries » 10 035 (2022: 5 270) small, medium and micro-sized entities (SMMEs) reached ENVIRONMENT » Old Mutual Alternative Investments are funders into 39% (2021: 31%) of South Africa’s installed renewable energy capacity in 2022 » 22% (2022: 23%) reduction in Group operational carbon emissions footprint against 2019 baseline » Old Mutual became a signatory to the Nairobi Declaration on Sustainable Insurance RESPONSIBLE INVESTMENT » AA MSCI ESG rating on the Old Mutual ESG Equity Fund » R166.8 billion (2022: R146.2 billion) funds invested in the green economy » 999 522 (2022: 968 245) active stewardship and resolutions voted on » Won Asset Owner of the Year at the Africa Impact Investment Awards GOVERNANCE » 44% (2022: 42%) black South African Board members » 31% (2022: 29%) female Board members » Remuneration Report of the Year at the South African Reward Association awards » Recognised by PwC for the third year running in their Building Public Trust through Tax Reporting publication 6 MSCI ESG RATINGIntegrated Report 2023 Overview of our business operating in 14 countries South Africa Southern Africa East Africa West Africa Asia South Africa Tied advisers 11 776 Employees1 21 839 Customers2 6.5 million Namibia Botswana eSwatini Malawi Zimbabwe Tied advisers 756 Employees1 3 294 Customers 2.5 million South Sudan Kenya Uganda Rwanda Tanzania Tied advisers 759 Employees1 1 460 Customers 2 million Ghana Nigeria China Tied advisers 660 Employees1 314 Customers 1.4 million Tied advisers 9 Employees1 348 Customers 0.2 million In China, we provide life insurance and investment solutions to high-net-worth retail customers through a 50:50 joint venture with China Energy Capital Holdings, a subsidiary of China Energy (a state owned enterprise). Old Mutual is a premium African financial services Group that offers a broad spectrum of financial solutions to retail and corporate customers across key market segments in 14 countries. Old Mutual’s primary operations are in South Africa and other African regions, and we have a niche business in China. We are well positioned in the insurance market with a large customer base, a valuable and trusted brand, and most of our core businesses holding leading market positions while making investment in our growth engines and markets. We have structured our operating segments to deliver our products and services to our customers according to their needs. Segmental results from operations (R million) 5 000 2 500 0 (2 500) 10% 3 710 3 369 22% 1 846 1 517 (1%) 1 240 1 227 19% 1 718 1 449 (23%) >100% 1 116 678 524 535 (22%) Mass and Foundation Cluster Personal Finance and Wealth Management Old Mutual Investments Old Mutual Corporate Old Mutual Insure Old Mutual Africa Regions Net result from group activities 2022 2023 (1 478) (1 798) Results from operations by line of business (R million) 10 000 28% 7 396 5 765 8 000 6 000 4 000 2 000 0 (2 000) 33% 1 384 1 845 (65%) 1 049 372 30% 590 766 Life and Savings Asset Management Banking and Lending Property and Casualty 2022 2023 1 Other includes net result from group activities and central costs allocated to segments. Total results from operations R8 343 million (2022: R7 310 million) Listed on five stock exchanges (38%) (1 478) (2 036) Other1 1 We have refined our definition of employee and restated the 2022 numbers. Our workforce is defined as permanent and non-permanent Old Mutual employees South Africa Namibia Malawi Zimbabwe United Kingdom and contingent workers which include consultants, contractors, service providers and vendors 2 Customer numbers for South Africa include policy count for Old Mutual Insure 7 Integrated Report 2023 An established history for over 178 years For 178 years, we have invested funds in a way that enables our stakeholders to thrive. As we look back to the early years of our business, we reflect on key achievements while Africa was undergoing significant changes. We present our milestones in today’s context, while understanding that South Africa, Zimbabwe, Namibia and Kenya, among others, were not countries when we were founded, but rather colonies or protectorates of the United Kingdom. A track record of delivery 1845 1895 1954 1971- 1982 1998 Our Group was established in Cape Town as South Africa’s first mutual life insurance company Started expanding in Africa with an office opened in Zimbabwe, followed by Namibia in 1920 and Kenya in 1930 1 million policies sold and opened offices in Malawi Annual income increased from R100 million to R1 billion Opened our first call centre of 40 people in Mutualpark, Pinelands 2014 - 2015 2013 2005 1999 Acquired majority in UAP and Faulu Bank in East Africa Expanded into West Africa with offices in Nigeria and Ghana Signed our first B-BBEE deal Demutualised and listed on the London Stock Exchange 2018 Anchored in Africa by listing on the JSE and launched South Africa’s first ESG index unit trusts 2020- 2021 Nedbank unbundling in 2021 2022 2023 Outlook Concluded second B-BBEE deal: Bula Tsela Migrated 1.85 million policies in our legacy risk book to a new platform and Bula Tsela declared its first dividend Launch our bank, a milestone in our integrated financial services journey 8 Integrated Report 2023 The core of who we are Our purpose is to champion mutually positive futures every day We want to be our customers’ first choice to sustain, grow and protect their prosperity, which is anchored in our purpose. This means that we aim to be their preferred partner for financial wellness and help them achieve their lifetime financial goals. We believe that creating value for customers ultimately drives value creation for shareholders. We create value through solutions delivered against our integrated financial services and interconnected strategy. We offer comprehensive solutions across Africa to meet our customers’ needs at every life stage. We will accompany them on their life journey as a trusted steward through multiple channels, platforms and comprehensive financial products and services anchored in rewards that aim to promote behaviours linked to holistic financial wellness. We conduct business responsibly to deliver a sustained positive impact across all our stakeholders: customers, employees, intermediaries, investors, regulators and the communities in which we operate. We through our lines of business ... ... by offering holistic solutions and financial advice Sustain Banking and Lending » Transactional banking » Personal loans » Business loans Grow Protect Savings and Investments » Long and short-term savings Asset Management » Wealth management » Investment solutions Catering to our customers’ lifetime financial needs Life Insurance and funeral cover » Life insurance, critical illness, disability » Retirement, annuities and endowments » Medical insurance Property and Casualty Insurance » Property, specialty and credit risk insurance We deliver our solutions through our distribution channels We embrace a human-led, technology-enabled distribution model. We deliver personalised advice and solutions using real-time data and insights through our extensive distribution network and strong digital engagement to ensure our customers and advisers can interact with us in a way that is most convenient for them. Our face-to-face and digital channels provide customers more choice as we move towards delivering a consistent omnichannel experience.   41 117 (2022: 39 238) Tied and independent intermediaries Our intermediaries are the competitive advantage through which we deepen our relationship with our customers in various segments. They are core to our ability to execute our integrated financial services ambition, differentiated by holistic advice, face-to-face interactions, trust and relevance built through meaningful engagements. 1.4 million (2022: 1.2 million) Active digital users The MyOldMutual integrated needs based goals and financial wellness ecosystem encompasses digital platforms such as the Old Mutual app, WhatsApp, USSD and an online platform that seamlessly integrates into a digital experience. Our service centres, advisers and customers can see and engage with the ecosystem. 796 (2022: 826) Retail branches 48 331 (2022: 48 731) Worksites Our retail branches facilitate a seamless customer experience by providing direct access to products, servicing and advice. Our branches recruit intermediaries from the communities in which we operate. Branded ATMs support our retail branch network to improve access and convenience for customers. Worksites enable us to take an advice-led approach by offering solutions to our customers in their workplace as an extension of the employee value proposition. Our worksites have skilled financial advisers who assist our customers with preserving their wealth and achieving better retirement outcomes. 9 Integrated Report 2023 Our strategy We formulated our strategy considering our operating environment, evolving customer needs, the competitive landscape and rapidly changing technological advancements. Our strategy seeks to ensure the delivery of sustainable value creation for our business to the benefit of all our stakeholders over the short, medium and long term. Our strategy is anchored in our victory condition of becoming our customers’ first choice to sustain, grow and protect their prosperity. Our value creation framework spans two broad themes: growing and protecting the core and unlocking new growth engines. We took a deliberate portfolio approach to growth by distinguishing between these themes, to ensure we are able to generate sustainable long-term value at an aggregate portfolio level. Our core businesses represent the majority of our portfolio and are the dominant contributors to our stable cash generation and earnings. Our new growth engines are a small part of our portfolio and represent newer sources of revenue streams for the Group over the long term. Each theme is supported by strategic focus areas that articulate how we will deliver value. This is underpinned by agile delivery driven by engaged employees. Our five value drivers link our strategic actions and the value creation impact for the Group. They also inform the prioritisation of these actions to ensure maximum value creation for customers and shareholders alike. R V I C T ORY CON DIT I O N U O To be our customers’ 1st choice to sustain, grow and protect their prosperity V A L U E DRIVERS e u n R e v e gr o w t h O U TCOME O p er m ar a ti n g i n g s s h t g n e v i t i t e p m Co stre e f C a f c i p e i t n a c l i e s RESPONSIBLY BUILD THE MOST VALUABLE BUSINESS IN OUR INDUSTRY Execut i o n and deli v e r y Integrated financial services Refer to pages 58 to 72 for our performance against our strategy Strategic focus areas Growing and protecting the core Holistic coverage of customer needs Distribution and digital engagement Operational efficiencies Unlocking new growth engines Strategic growth businesses Strategic growth markets Enabled by Agile delivery driven by engaged employees The circles reflect the value drivers impacted by each strategic focus area. 10 Integrated Report 2023 Our strategy continued Building the integrated financial services business of the future The delivery of holistic financial services that prioritises great customer and adviser experience, will empower our customers to move towards financial wellness and have financial freedom and security. One of our most valuable strategic assets is our large customer base. We will focus our efforts on delivering more value to our existing customers through integrated financial services. Integrated financial services is a natural extrapolation of our victory condition. Partnering with our customers on their journey towards financial wellness is at the heart of our integrated ecosystem. Our approach to building a distinctive integrated financial services ecosystem leverages off our existing strengths to ensure we are our customers’ lifetime financial partner of choice. Key components of our ecosystem include: 1. Advice-led Advice-led conversations support our customers with the right solutions at the right time. We have strong expertise through one of the largest tied adviser networks in South Africa, equipped with industry-leading advice tools. 2. Integrated We aim to provide a customer experience that is integrated across our holistic solution set and our channels. Our customers benefit through our rewards programme by having multiple products with us and making good financial decisions in support of their personal financial goals. 3. Tech-forward We provide an always-on experience, enabled by modern technology, so our customers can interact with us when and how they want to. 4. Trusted Trust is a key driver of consideration and brand usage. It is a critical enabler of business performance. Customers associate the Old Mutual brand with trust and we continue to ensure that we earn and maintain this trust every day. For more information on industry and customer trends refer to page 41 in our operating context Board focus: Strategy governance The Board is responsible for setting and steering the Group’s strategic direction. During the year the Board: » Continued to monitor the steps implemented to embed the Group’s medium and long-term strategy, focusing on delivering an integrated financial services offering » Monitored the impact of competitors and disruptors on the industry and the Group’s response thereto » Supported management in refining the Group’s strategy for Old Mutual Africa Regions » Supported management in the appropriate strategic allocation of capital , focusing on organic and inorganic opportunities which support innovation and competitive positioning » Continued to consider and monitored the return on capital the Group is generating for our shareholders 11 MYOLDMUTUALFINANCIAL PLANCustomerLifeEventsRewardsAccount AggregationFinancial EducationBudgetingPersonalisedRecommendationsDigitalised ServicingCUSTOMERADVISERSDATA PLATFORMLIFE & SAVINGSASSET MANAGEMENTBANKING& LENDINGPROPERTY& CASUALTYIntegrated Report 2023 Sustainability Broad-based sustainability is central to our identity and an integral part of our core business strategy. Our approach recognises the interconnectivity between economic, social and biological and physical systems, and the urgency to transform our collective growth path to be more socially inclusive, low carbon and resource efficient. Creating shared value and sustainable transformation are at the core of how we do business. We recognise that the success of our business is integrally linked to the wellbeing of the economies we form part of and operate in. In building the most valuable business in our industry, we strive to create a positive and sustainable impact across our communities, the environment and broader society. Our ability to effectively manage risk and create long-term value for all our stakeholders are inextricably linked to the wellbeing of the broader economy and society. Our response to sustainability is shaped by the material environmental, social and governance issues impacting our business and stakeholders in Africa, our commitment to act responsibly and treat all stakeholders fairly, including policyholders, shareholders, employees, communities, regulators and media and our core business competencies. Our efforts are further guided by local and international frameworks such as the United Nations Principles for Responsible Investing, Code for Responsible Investing in South Africa, Global Reporting Initiative and the United Nations Sustainable Development Goals. Our impact cuts across several Sustainable Development Goals. Material ESG issues Group response Related material matters Environment Climate change is the key environmental risk facing our Group and poses a threat to the sustainability of our business operations and the communities and countries in which we operate. We respond to the challenges posed by climate change by focusing on decarbonising our operational footprint. Our responsible investment practices recognise, evaluate and incorporate material ESG risks and opportunities into our asset investment and ownership decisions in our proprietary and customer investment portfolios. This investment philosophy allows asset managers and≈asset owners to focus on offerings solutions that address key global issues, such as energy scarcity, agriculture, infrastructure and education, while delivering sustainable risk-adjusted returns. Climate change Regulatory requirements As signatories to the Net Zero Asset Manager Initiative and the Net Zero Asset Owners Alliance and given the carbon intensity of South Africa’s listed market, the Just Transition to decarbonise the economy is core to our responsible investment strategy, which aims to further strengthen our regional leadership position in ESG investments. We identified three priority issues based on the most urgent risks to South Africa, namely, Just Transition, water security and inequality. Refer to our Climate Report Social Social challenges such as extreme poverty, inequality and unemployment are primary systemic challenges across Africa. We believe the key to addressing poverty, inequality and unemployment over the long term lies in education and job creation. We contribute to employment through education, skills development, and entrepreneurship initiatives across all the countries in which we operate. Our financial education and inclusion initiatives aim to increase financial literacy in our communities to shift financial behaviour towards economic transformation and inclusion. We focus on our core savings and protection solutions and our ongoing efforts to deliver sound advice to our customers. Our transformation strategy is based on core B-BBEE scorecard pillars as stipulated in the South African Department of Trade and Industry Codes of Good Practice and the Financial Sector Code. The updated Group transformation policy, approved by the Responsible Business committee, strengthened the function of preferential procurement to embed a culture of transformation across our procurement value chain, strengthened the profile of SMME development and reaffirmed our commitment to empowerment financing and employment equity. Macroeconomic and socio-political environment Changing customer expectations and needs Regulatory requirements Talent management Refer to our Sustainability Report Governance Governance failures across the public and private sectors remain persistent long-term sustainability challenges for Africa. We believe that good corporate governance is fundamental to the Group’s success, sustainability and legitimacy. Our Group Governance Framework drives top-down governance and our organisational ethics and values set the standards for our corporate governance. Our strategy and planning processes are supported by sound risk management principles and processes. We take our contribution to preventing financial crime seriously. We believe in the transparent disclosure of our responsible remuneration policies and practices, as well as our approach to responsibly managing our tax affairs. Regulatory requirements ESG is governed by the Old Mutual Board, supported by the Responsible Business committee and operationally by the Responsible Business Executive committee and the sustainability team. Key sustainability metrics are included in the Group scorecard to link sustainability performance to executive remuneration. Refer to our Corporate Governance Report 12 Integrated Report 2023 Segments Our operating segments are structured to deliver our products and services according to the needs of our customers and are supported by our centralised enabling functions. Mass and Foundation Cluster Personal Finance and Wealth Management Old Mutual Investments Simple financial services offerings Target markets Lines of business Retail customers in the low-income and lower-middle-income markets Types of offerings » Risk and lending » Transactional banking » Savings Key distribution channels » Tied advisers, sales agents and financial consultants » Third-party channels » Call centre and digital channels Holistic financial advice and long-term financial solutions Target markets Lines of business Retail customers in the middle and high-income markets and high-net-worth individuals Types of offerings » Long and short-term risk, savings, lending, income and investment solutions » Wealth management Key distribution channels » Tied and independent financial advisers » Direct and digital channels Refer to pages 85 to 87 for Mass and Foundation Cluster’s performance in 2023 Refer to pages 88 to 90 for Personal Finance and Wealth Management’s performance in 2023 Asset management and investment solutions Target markets Lines of business Institutional and retail customers, as well as multi-managers Types of offerings » Listed equity, unlisted and multi-assets investments » Fixed income and credit investments » Income solutions investments » Unlisted assets investments » Shareholder credit and asset liability management Key distribution channels » Our investment solutions are accessible to the other segments, linked investment service providers, multi-managers and asset consultants Refer to pages 91 to 93 for Old Mutual Investments’ performance in 2023 Old Mutual Corporate Old Mutual Insure Old Mutual Africa Regions Traditional employee benefits, including group assurance, investments and advisory solutions Short-term insurance solutions Target markets Lines of business Small, medium and large enterprise employers, retirement funds and other benefit funds, as well as their members and employees Types of offerings » Retirement investments and administration » Group risk » Reward benchmarking, management and advisory services » SME funding and support » Health and wellness, member education and advice Key distribution channels » Intermediaries » Consultants » Direct and digital channels Target markets Lines of business Retail, commercial and corporate customers Types of offerings » Personal insurance » Commercial insurance » Niche (specialised) insurance » Reinsurance Key distribution channels » Tied advisers » Independent brokers » Direct and digital channels » Partnerships Insurance, banking and asset management services across 12 countries in Africa Target markets Lines of business Corporates, SMMEs and retail customers Types of offerings » Medical insurance, short and long-term insurance » Asset management, discretionary and retirement savings and annuity solutions » Transactional and corporate banking and lending » Rewards and value-added services Key distribution channels » Brokers and advisers » Partnerships » Direct and digital channels Refer to pages 94 to 96 for Old Mutual Corporate’s performance in 2023 Refer to pages 97 to 100 for Old Mutual Insure’s performance in 2023 Refer to pages 101 to 104 for Old Mutual Africa Regions’ performance in 2023 Line of business key Life and Savings Protection solutions for certain risk events including life, critical illness, disability and funeral cover. Long-term savings solutions include retirement and traditional savings products. Asset Management Retail savings and investment products including unit trusts and institutional capabilities across all major assets classes including listed and unlisted equity, credit, fixed income, property and infrastructure. Banking and Lending A wide range of banking and lending solutions included unsecured lending, simple retail banking solutions and structured credit. Property and Casualty A range of short-term insurance solutions for loss of property liability and cover for personal, commercial, specialty and credit risks. 13 Integrated Report 2023 Segments continued Our segments are supported by our enabling functions Our enabling functions are centralised Group functions that support segments and lines of business by setting Group-wide strategic objectives and overseeing Group-wide projects. Group governance Group strategy, sustainability and economics Group human capital OMiX Public affairs Group risk, compliance and actuarial Group finance Changes to optimise our enabling functions OMiX OMiX creates the innovative products, technology solutions and customer experiences that form the critical foundation for Old Mutual to become our customers’ first choice to sustain, grow and protect their prosperity. We achieved some exciting milestones in our agile transformation journey by implementing our new operating model which integrated our products, customer support and servicing, technology and operations, and Group marketing functions into OMiX, a function centred on delivering smart experiences that matter by leveraging new technologies, data and connections that intersect customers and advisers, product and technology and other diverse strengths of our business. By consistently focusing on smart experiences, leveraging technology and data, and changing the way we work, we will be better positioned to deliver on our promise to customers. Group strategy, sustainability and economics In enhancing capacity, alignment and delivery against the Group strategy, the Group sustainability and economics team has been integrated into the Group strategy function to elevate the role of sustainability within strategy development and decision making and align it to best practice. Public Affairs The public affairs function encompasses financial education, Group communications, Group stakeholder relations, the Old Mutual Foundation, the Old Mutual Education Trust, transformation and empowerment, and the Masisizane Fund. This function provides strategic direction and long-term planning, monitoring and coordination of multiple areas and activities that deliver against our commitment to the communities in which we operate. 14 Integrated Report 2023 Our values, culture and ethics We believe an ethical culture is critical to doing business responsibly. Our values are key to building this work environment, and we ensure that we lead with integrity and respect to drive employee, customer and investor confidence in our business. l s e u a v r u O We foster a culture where our employees and leaders are aligned with our values. Our values guide our interactions with each other, our customers, communities and other stakeholders. We adopted the following values, which are fundamental to building our organisational and ethical culture CUSTOMER DIVERSITY INNOVATION INTEGRITY Champion the customer The power of diversity and inclusion Agile innovation that makes a difference Always act with integrity RESPECT Respect for each other and the communities we serve ACCOUNTABILITY Accountability & trust Our culture We believe that our culture is key to our ability to deliver on our strategic ambitions. Our integrated financial services strategy is anchored in our victory condition, “to be our customers’ first choice to sustain, grow and protect their prosperity”. We will achieve this through agile delivery driven by engaged employees. Our culture focuses on winning in the market through engaged, high- performing teams who are equipped to deliver to our customers. Our leaders unite these teams, creating the ideal environment for high performance and enabling our employees to deliver and thrive. Our culture is underpinned by the heart of our business – our people, namely our customers and our employees. While our Board is responsible for setting and steering the Group’s culture, our leaders and employees are supported by organisational structures and processes to bring our culture to life by reinforcing our desired behaviours. Old Mutual’s organisational culture is built on four cornerstones: Building high-performing teams through inclusive leaders who enable our employees to unite as high performers who live our values and strive for and drive excellence because they are engaged, psychologically safe, have a sense of belonging and inclusion and are trusted and accountable Executing and delivering at speed through agile innovation, problem solving and continuous improvement Being customer centric with teams that are set up and supported to deliver to our customers and have a customer service mindset Winning in the market by providing an exceptional customer experience 1 2 3 4 Our organisational culture and behaviours are continuously reinforced through communication and engagement, performance management, organisational structures, training and incentives. These help employees understand what drives decisions and behaviours from their leaders. To guide our culture transformation journey, we developed a culture and engagement model to improve the way we do things in the organisation. Our model forms the basis of the Pulse Culture and Engagement Survey, which was launched in 2019 and gives employees the opportunity to provide feedback on their experience of the organisation. The full Pulse Culture and Engagement Survey is conducted every second year with mini Pulse surveys in between. The insights from the results are used to drive organisational change to achieve the desired culture. Refer to the performance against strategy: agile delivery driven by engaged employees section for results of the 2023 survey on page 69 Our ethics Ethics are defined as universal principles on what is right and wrong. These principles inform how Old Mutual conducts its business and treats all its stakeholders. Our ethics are embedded in our culture and translate into individual behaviours and organisational outcomes felt by employees and third parties with whom we conduct business. To ensure that behaviours and outcomes are positive and beneficial to all stakeholders, we must create a common and shared understanding of what a healthy culture is. At Old Mutual, we adopted values which were fundamental in building our organisational and ethical culture. We strive to conduct our business responsibly and ethically. We ensure our behaviour is consistent with our policies, code of ethics and relevant regulations applicable to African financial services companies. Our code of ethics, the Maadili Charter (Maadili meaning ethics in Swahili) defines ethical behaviour as following the spirit and intention of the law and treating our stakeholders and competitors fairly and respectfully. It outlines behaviours that are consistent with our values and provides guidance for decision making. It is supported and extended by several policies, including our Anti-bribery and Corruption Policy and our Conflicts of Interest Policy. The Maadili Charter applies to all Board members and employees and is reviewed regularly and revised accordingly to ensure a progressive ethical culture. We undertake an annual ethics attestation process wherein all employees (a) are trained and assessed on the Maadili Charter and the Conflicts of Interest Policy, (b) accept the Maadili Charter and Conflicts of Interest Policy, declare their outside business interests, and (d) declare gifts received or given. In 2023 there were enhancements and changes to our annual attestation processes. Some of these were necessitated by legislation, which included screening employees for financial crime offences and proactively identifying politically exposed persons. 95% of existing employees and 80% of newly appointed employees participated in the annual attestation process. This is a positive outcome as, historically, this level of participation for existing employees was reached after the consequence management (corrective action) process had been invoked. Governance of ethics The Board The Board is responsible for setting and steering the Group’s culture. Board members are individually and collectively accountable for their ethical and effective leadership of the Group. Ethics governance structures Old Mutual’s internal and external ethics governance mechanisms include a whistleblower hotline, e-mail and website for reporting actual or suspected unethical or unlawful behaviour by directors, employees or external third parties. These are supported by strong investigative capabilities and rigorous disciplinary processes and sanctions. The Executive committee As delegated by the Board, management is responsible for implementing and executing the Maadili Charter and supporting policies and effective monitoring, control and assurance thereof. The Executive committee is also responsible for ensuring the effective operation of the ethics governance structures. Refer to the Corporate Governance report for details on how ethics are governed 15 Integrated Report 2023 GOVERNANCE OVERVIEW In this section Message from the Chairman Our Board Board responsibilities Board composition, tenure and skills Message from the Chief Executive Officer Our Executive committee 17 19 21 23 25 27 16 Integrated Report 2023 Message from the Chairman Trevor Manuel Chairman In 2023, Old Mutual continued creating value for our stakeholders, despite a backdrop of seismic geo-political shifts and volatile international markets. Focused execution, responsible capital allocation and sophisticated financial risk management underpinned our growth and ensured that the Group performed well against the strategy. We are pleased with our overall positive financial results achieved in the face of tough economic challenges. Our customer focused approach has enabled us to generate strong new business and continued sales momentum in 2023. We delivered double digit sales growth of 17% across our life segments as we grow market share profitably within our key markets. Consequently, we delivered exceptional value of new business growth of 37%. The effects of state capture continue to be felt in all spheres of South African society. While there has been an effort to restore the institutions and rebuild the economy, more work is necessary to eradicate corruption completely and regain institutional strength. Against this backdrop, it is crucial that regulators adopt a pragmatic approach, striking a balance between fiscal requirements and providing clear regulations and long term regulatory certainty. Foreign investors disinvested more than a trillion rand from South African equities and bonds over the past decade, primarily due to regulatory uncertainty and execution stasis. This money is being redirected to competing markets that appear to be on a more sound governance and regulatory footing. This is a stark reminder that Africa, particularly South Africa, has to compete to attract and retain investment. This is an ongoing challenge, and Old Mutual stands ready to collaborate with regulatory authorities and government stakeholders to create an environment conducive to business growth and investment. 2024 is destined to be a record-breaking election year, with 19 African countries scheduled to go to the polls. This will likely extend the period of political uncertainty, but may also signal the beginning of a new regulatory environment in many countries. Committed to customers We remain committed to generating sustainable and suitable returns for all our stakeholders. We accomplish this through partnerships that drive the creation of responsible business. We take our responsibility as the stewards of our customers’ savings and financial wellbeing seriously. Our products and services are constantly evolving to help our customers manage their savings and mitigate financial risks. The Board is particularly pleased with the increase in our sales metrics during the year, which reflects our customers’ trust in our organisation. Strengthening our integrated financial services ecosystem is a key strategic customer focus. Our approach involves partnering with our customers on their life journey to achieve financial wellness. We leverage our advanced technology and our committed people to sustain, grow and protect our customers’ prosperity, ensuring we become their lifetime financial partner of choice. This ecosystem will be further enhanced with the launch of our new bank in 2024, which should accelerate the integration of Old Mutual’s financial services. The bank’s use of artificial intelligence (AI) is expected to dramatically speed up processes, keep operating costs and bank charges low, and facilitate the development of convenient and relevant new financial offerings. Meeting specific sustainability and ESG challenges We see our business as a force for good that is accountable to customers, employees, shareholders and other stakeholders. Broad based sustainability goals and environmental, social and governance (ESG) principles are an integral part of our core business strategy and specific ESG metrics are included in our remuneration structures. Our approach recognises the interconnectivity between economic, social and biophysical systems and the urgency to be more socially inclusive, low carbon and resource efficient. As a signatory to the United Nations Global Compact, we are active contributors to the Sustainable Development Goals. In particular, our commitment to responsible investment practices entails recognising, evaluating and scrupulously incorporating material ESG risks and opportunities into investment and ownership decisions. We deepened our active stewardship footprint by consistently monitoring key metrics and calling out irregularities and discrepancies when we encounter them. Climate change is a key environmental risk facing our Group, posing a threat to the sustainability of our business operations and the communities and countries in which we operate. As a signatory to both the Net Zero Asset Manager Initiative and the Net Zero Asset Owners Alliance, Old Mutual plays a leading advocacy role in the Just Transition. We made significant progress towards achieving our Net Zero Asset Owners Alliance 2025 intermediate targets. We also transitioned funds to track the MSCI World Climate Paris Aligned Index and the Old Mutual Investment Group launched the Old Mutual Global ESG Active Fund, which targets listed global companies with high governance ratings and low carbon emissions. Climate change brings opportunities for Africa. We have untapped renewable energy potential, a young workforce and significant natural resources, all of which can drive green industrialisation and economic growth. Old Mutual has invested more than R167 billion in the green economy over the last year and this will remain a focus going forward. Stronger through transformation We retained our broad-based black economic empowerment level 1 status and made strong progress in gender diversity, meeting our target for female representation on the Board. We set ambitious targets for women in leadership positions, supported by multiple targeted development opportunities. Our employees continued to navigate the dynamic macro- environment adeptly, including embracing the new ways of working. The Board ensured employees received holistic support, while the business, with our backing, invested in attracting and retaining critical skills and nurturing a high-performance culture. One of our 2023 transformation highlights was increasing the minimum salary of our employees in South Africa to R180 000 per year. This makes me very proud, especially because we are among the first companies in the financial services sector to take a decisive step towards narrowing the wage gap and one of the first to provide voluntary disclosure in our Remuneration Report. 2023 also had the first dividends flow to the participants in Old Mutual’s Bula Tsela B-BBEE deal. Bula Tsela was launched in 2022 to help broaden Old Mutual’s shareholding by providing shares to  black South Africans. 17 Integrated Report 2023 Message from the Chairman continued Governance Good corporate governance is fundamental to the Group’s success, sustainability and legitimacy. The Board spent significant time ensuring that the organisation-wide corporate governance principles, frameworks and risk management practices function as designed, recognising this as one of our key stewardship responsibilities. We maintained our focus on succession planning during the year. In particular, we are committed to replacing the six directors set to rotate off the Old Mutual Board by 2026. The Board also maintains keen oversight of executive management succession planning, ensuring that we have a pipeline of talent and a strategy refresh the team. The appointment of Busisiwe Silwanyana and Jurie Strydom to the Board last year reflects our succession planning efforts. We wish them a stimulating and productive tenure. We are pleased that a significant majority of our shareholders are satisfied with the Board’s work over the past year. All ordinary and special resolutions were passed at our Annual General Meeting held in May 2023 and the 2022 Remuneration Policy and implementation report received more than 84% and 95% support, respectively. In closing Looking ahead, I believe we will continue building on the momentum gained in 2023 by further expanding and enhancing our integrated financial services offering. However, we expect the operating environment to remain uncertain and volatile. I would like to thank the respected members of the Board for their unflagging dedication to the Company and all its stakeholders. I would also like to thank our CEO, Iain Williamson, and the executive team for their astute leadership and steady direction. Together with their talented teams, they make it possible for the business to consistently deliver excellence to all our stakeholders. Last, but not least, I want to express my appreciation to all our loyal Mutualites for the positive impact they make in the lives of our customers and communities. Ngiyabonga! Kea leboga! Baie dankie! Thank you! Asante! Trevor Manuel Chairman of the Board 18 Integrated Report 2023 Our Board Independent Non-executive Directors t r o p e R e c n a n r e v o G e t a r o p r o C e h t m o r f t c a r t x E Trevor Manuel (67)1 Chairman Prof Brian Armstrong (62)1 Albert Essien (68)1 Olufunke Ighodaro (60)1   NDip, EMP Appointed: 2016  Tenure2: 8 years BSc (Eng), MSc (Eng), PhD Appointed: 2020  Tenure2: 3 years BA (Hons), EDP Appointed: 2015  Tenure2: 8 years Expertise brought to the Board: Finance and audit, information technology, leadership, listed corporates, responsible business, risk management, strategy Committee membership: Corporate Governance and Nominations, Responsible Business Other listed directorships: 0 Expertise brought to the Board: Digital ethics, digital transformation, information technology, listed corporates, remuneration and performance management, responsible business, risk management, sales and distribution, strategy Committee membership: Related Party Transactions, Responsible Business, Technology and Platforms Other listed directorships: 0 Expertise brought to the Board: Finance and audit, listed corporates, remuneration and performance management, responsible business, risk management, strategy Committee membership: Responsible Business, Risk Other listed directorships: 0 BSc (Hons), FCA (ICAEW), CA(SA)   Appointed: 2020  Tenure2: 3 years Expertise brought to the Board:  Finance and audit, information technology, listed corporates, remuneration and performance management, risk management, strategy Committee membership: Actuarial, Audit, Corporate Governance and Nominations, Risk Other listed directorships: 3 Itumeleng Kgaboesele (52)1  Jaco Langner (50)1  John Lister (65)1  Dr Sizeka Magwentshu- Rensburg (64)1  Lead Independent Director BCom, PDip (Acc), Dip (FMI), CA(SA) Appointed: 2016  Tenure2: 7 years Expertise brought to the Board: Finance and audit, remuneration and performance management, risk management, strategy Committee membership: Actuarial, Audit, Corporate Governance and Nominations, Remuneration Other listed directorships: 0 BCom, FASSA, FFA Appointed: 2021  Tenure2: 2 years BSc (Stats), FIA Appointed: 2017  Tenure2: 6 years BA, MBA, DPhil Appointed: 2017  Tenure2: 6 years Expertise brought to the Board: Actuarial, finance and audit, information technology, listed corporates, remuneration and performance management, risk management, sales and distribution, strategy Committee membership: Actuarial, Audit, Remuneration Other listed directorships: 0 Expertise brought to the Board:  Actuarial, finance and audit, information technology, listed corporates, responsible business, risk management, strategy Committee membership: Actuarial, Audit, Corporate Governance and Nominations, Risk Other listed directorships: 0 Expertise brought to the Board:  Finance and audit, information technology, responsible business, risk management, strategy Committee membership: Corporate Governance and Nominations, Remuneration, Responsible Business Other listed directorships: 0 1 Age as at 31 December 2023 2 Tenure considers the length of time served on either of the previous Old Mutual Emerging Markets or Old Mutual plc Boards or the Old Mutual Limited Board post listing in 2018, as at 31 December 2023 South Africa Ghana Nigeria United Kingdom 19 Integrated Report 2023 Our Board continued Independent Non-executive Directors continued t r o p e R e c n a n r e v o G e t a r o p r o C e h t m o r f t c a r t x E James Mwangi (46)1 Nomkhita Nqweni (49)1 Busisiwe Silwanyana (50)1 Jurie Strydom (48)1 BA (Econ) Appointed: 2017  Tenure2: 6 years Expertise brought to the Board: Information technology, remuneration and performance management, responsible business, strategy Committee membership: Corporate Governance and Nominations, Related Party Transactions, Responsible Business, Technology and Platforms Other listed directorships: 0 BSc, PDip (Inv Mgt), LDP, AMP Appointed: 2021  Tenure2: 2 years Expertise brought to the Board: Finance and audit, listed corporates, remuneration and performance management, responsible business, strategy Committee membership: Actuarial, Audit, Responsible Business Other listed directorships: 1 BCom (Fin Acc), BCom (Hons), PGDA, MBA Appointed: 2023 Tenure2, 3: 0 years Expertise brought to the Board: Finance and audit, listed corporates, risk management, strategy Committee membership: Actuarial, Audit, Risk Other listed directorships: 2 BBusSc (Hons) (Act), FIA, CFA, MBA Appointed: 2023 Tenure2, 3: 0 years Expertise brought to the Board: Actuarial, finance and audit, listed corporates, remuneration and performance management, risk management, sales and distribution, strategy Committee membership: Actuarial, Audit, Risk Other listed directorships: 0 Non-executive Director Executive Directors Stewart van Graan (68)1 Thoko Mokgosi- Mwantembe (62)1 Casper Troskie (60)1   Chief Financial Officer Iain Williamson (53)1   Chief Executive Officer  BCom (Hons), PMD   Appointed: 2017  Tenure2: 6 years BSc, MSc, SEP, MRP Appointed: 2017  Tenure2: 6 years Expertise brought to the Board: Information technology, listed corporates, responsible business, sales and distribution, strategy Committee membership: Corporate Governance and Nominations, Related Party Transactions, Risk, Technology and Platforms Other listed directorships: 2 Expertise brought to the Board: Information technology, listed corporates, remuneration and performance management, responsible business, sales and distribution, strategy Committee membership: Remuneration, Technology and Platforms Other listed directorships: 2 BCom (Hons), PGDA, CA(SA) Appointed: 2018  Tenure2: 5 years Expertise brought to the Board: Actuarial, finance and audit, listed corporates, remuneration and performance management, risk management, strategy Other listed directorships: 0 BBusSci (ActuariSci), GMP, FASSA Appointed: 2019  Tenure2: 4 years Expertise brought to the Board: Actuarial, finance and audit, information technology, listed corporates, remuneration and performance management, risk management, strategy Committee membership: Responsible Business, Technology and Platforms Other listed directorships: 0 1 Age as at 31 December 2023 2 Tenure considers the length of time served on either of the previous Old Mutual Emerging Markets or Old Mutual plc Boards or the Old Mutual Limited Board post listing in 2018, as at 31 December 2023 3 Appointed to the Board on 4 December 2023 Independent Non-executive Directors 13 (81%) 1 (6%) Non-executive Director 2 (13%) Executive Directors South Africa Kenya 20 Integrated Report 2023 Board responsibilities How does the Board committees support the Board in discharging its responsibilities? The seven committees of the Board assist in discharging its duties and responsibilities. These committees are also responsible for overseeing the defined governance domains of the Group Governance Framework. There are formal reporting structures and processes for the Executive committee to manage the Group as per delegated authority and to provide the Board and its committees with the requisite information to support their oversight duties, as shown in the infographic alongside. The Board annually reviews the mandate and terms of reference of each committee to ensure effective oversight of and control over the Group’s operations. The Board considers and reviews committee composition and the allocation of roles quarterly. This ensures all committees have the necessary knowledge, skills, experience and capacity requirements, effective collaboration, efficient use of Board resources and a balanced distribution of power. The Board committees are chaired by independent Non- executive Directors and are constituted of a minimum of three members with the necessary combination of knowledge, skills, experience and capacity. The committees report to the Board through their Chairpersons. In certain instances, Board committees have overlapping responsibilities. Different committees may consider the same Board material and apply different perspectives as mandated. Committee Chairpersons are responsible for ensuring that matters relevant for consideration by another committee are reported to that committee. Overlapping committee memberships assist in this regard, as do the formal committee reports to the Board, where matters of importance for Board members and other Board committees are highlighted. Executive committee The Board appoints the Chief Executive Officer and has established a framework for the delegation of authority to the Chief Executive Officer. This promotes independent judgement and assists with balance of power and the effective discharge of the Board’s duties. Refer to the Corporate Governance Report for our leadership roles The Chief Executive Officer has established an organisational structure, including the Executive committee, for the Group. This enables the execution of its strategic mandate. The Executive committee meets weekly in between scheduled meetings, or when required. The Executive committee makes the requisite decisions regarding operational matters and provides oversight over the responsibilities falling within the mandate of the Chief Executive Officer. Executive committee sub-committees also interrogate and review papers before formal submission to the relevant Board sub-committees. t r o p e R e c n a n r e v o G e t a r o p r o C e h t m o r f t c a r t x E OLD MUTUAL LIMITED EXECUTIVE COMMITTEE Old Mutual Limited Board committees Audit committee Corporate Governance and Nominations committee Related Party Transactions committee Remuneration committee Responsible Business committee Risk committee Technology and Platforms committee Group Executive committees Balance Sheet Management Quarterly Business Review committee Management Remuneration committee Responsible Business committee Risk committee Technology and Platforms committee Subsidiary committees Subsidiary Boards/ subsidiary management 21 Integrated Report 2023 Board responsibilities continued How does the Board govern the Group? The Board is responsible for ensuring that the governance arrangements across the Group enable it to discharge its oversight and fiduciary duties effectively, balancing clear accountability and devolution of responsibility. To achieve this, the Board and Executive committee operate and oversee a Group Governance Framework, in line with international best practice, legislative requirements and King IV. The Group governance framework determines how the Board executes its direction and oversight responsibilities and how the exercise of power within the Group should be approached and conducted. It also sets a framework for the minimum governance requirements over various governance domains relevant to the Group. The Group Governance Framework acknowledges that the Group has significant and geographically diverse operations, with equity listed on five stock exchanges and debt issued on the JSE. It is therefore structured into a proportional model with five categories. Operating and complying with the Group Governance Framework provides the Board with assurance that the Group is operating as it directs, appropriately managing risk, complying with applicable legislation and regulatory requirements and applying the principles of effective governance as expressed in King IV. This underpins the achievement of clear governance outcomes and sustainable value creation across the Group. The Group Governance Framework Steering committee reviews the Group Governance Framework annually to ensure it remains relevant and functions as designed and submits its proposed changes to the Corporate Governance and Nominations committee for approval. Boards of selected subsidiaries attest to the application of the Group Governance Framework annually. t r o p e R e c n a n r e v o G e t a r o p r o C e h t m o r f t c a r t x E How are subsidiaries governed? The Group Governance Framework sets the minimum Group governance requirements for subsidiaries, allowing for country- specific legislation and applicable country corporate governance codes as an overlay. The Group Governance Framework in no way absolves or places a restraint on subsidiary Boards’ ability to execute their fiduciary duties. It outlines the requirements of the Old Mutual Limited Board in discharging its duties across the Group. The Board has constructed lines of accountability as per the Group Governance Framework and various policies, risk appetite limits and financial management frameworks are approved at Board level. Management is expected to manage within those limits and report any breaches and exceptions to the Board. GROUP GOVERNANCE FRAMEWORK Each category of Company level within levels 1 to 5 has specific governance requirements, duties and powers, as defined by the Group Governance Framework. These are outlined in governance domains. 1 2 3 4 5 PRIMARY LISTED ENTITY HOLDING COMPANY WITH OWN OPERATIONS NON-OPERATING HOLDING COMPANIES OPERATING ENTITIES OTHER GOVERNANCE DOMAINS Actuarial Assurance Board specific Capital and liquidity Compliance Information technology Responsible business Risk Strategy and performance Talent and reward Key Group Governance Framework principles Proportional and fit for purpose Devolution of responsibility Avoid duplication Ensure comprehensive regulatory compliance 22 Integrated Report 2023 Board composition, tenure and skills What is the composition and tenure of the Board? The Board consists of 16 members with the necessary qualifications, collective skills and expertise required to guide and steer our large and complex Group. The maximum tenure in the Group is three terms of three years and the retirement age for directors is set at 70 years. These requirements are subject to the discretion of the Corporate Governance and Nominations committee. The committee evaluates the Board’s composition quarterly to ensure an appropriate balance of knowledge, skills, experience, diversity and independence. It also considers its succession plan and rotation schedule. The committee considers, in advance of the Annual General Meeting, the directors required to rotate, in accordance with the rotation schedule. We also ensure, through quarterly declarations of their external board memberships by our Board members, that they are not overcommitted in terms of their representation on other listed boards. We limit the number of listed and large unlisted directorships of our directors to five (including Old Mutual Limited). In our Board appointment protocols, we caution against the over-extension of our directors and provide guidance on matters to consider before accepting other directorships outside of the Group. In terms of the JSE Listings Requirements, the Board must set transformation targets, which are in the Board Appointment and Diversity Policy. Our performance against these targets and other key data points are below: How is directors’ independence assessed? The Group assesses directors’ independence annually from the perspective of a reasonable and informed third party. The assessment is based on, among other things, prevailing circumstances, the definition of independence in terms of the Companies Act, King IV guidance on assessing independence (substance over form), conflicts of interest (whether perceived or actual) and other relevant considerations. The 2023 independence assessment did not result in changes to any directors’ designations. What changes were made to the Board and committee composition during the year? Board member Appointment date to the Board Nature of change Impact on committee membership Busisiwe Silwanyana 4 December 2023 t r o p e R e c n a n r e v o G e t a r o p r o C e h t m o r f t c a r t x E Demographic diversity (%) Gender diversity (%) Jurie Strydom 4 December 2023 2023 2023 ● White South African ● Black South African ● Non-South African 2023 31% 44% 25% 2022 29% 42% 29% ● Male ● Female 2023 69% 31% 2022 71% 29% Target 50% NOT ACHIEVED The achievement of these targets will inform future Board appointments. Target 30% ACHIEVED Appointed as independent Non-executive Director of Old Mutual Limited Appointed as independent Non-executive Director of Old Mutual Limited Appointed as a member of the Actuarial committee on 11 December 2023 Appointed as a member of the Audit committee on 11 December 2023 Appointed as a member of the Risk committee on 11 December 2023 Appointed as a member of the Actuarial committee on 11 December 2023 Appointed as a member of the Audit committee on 11 December 2023 Appointed as a member of the Risk committee on 11 December 2023 98% scheduled Board meeting attendance Average age 58 years 23 Integrated Report 2023 Board composition, tenure and skills continued What knowledge, skills and experience does the Board have? The Board has identified, and continues to consider, the individual skills required to provide effective oversight over a large financial services conglomerate using a skills matrix. The Corporate Governance and Nominations committee reviews the skills matrix of the Board and its committees quarterly, identifying skills gaps, which guide decisions on future Board appointments and inform training requirements. The process also considers directors’ level of institutional knowledge. Preference is given to executive and/or industry experience when filling skills gaps on the Board, as the Board believes that these skills enable effective functioning and facilitates robust oversight by Board members with the requisite practical experience. Number of Board members with recognised executive industry expertise1 in a particular field t r o p e R e c n a n r e v o G e t a r o p r o C e h t m o r f t c a r t x E Strategy Risk management Finance and audit Actuarial 5 Information technology Remuneration and performance management Sales and distribution 5 Responsible business Listed corporates 12 12 10 11 9 16 Strong strategic and risk management expertise required to successfully govern and steer the Group to ensure shared value outcome Key experience required for effective governance, oversight and tracking of performance of a financial services organisation Important expertise given the significance of our life business and the material impact of actuarial shifts on the results Key expertise in the context of the rapidly evolving operating environment and fundamental technology shifts within the financial services industry Remuneration and performance management expertise is required to steer the Group in retaining, attracting and developing the talent and skills required in our organisation Key strategic driver for a financial services organisation Essential range of expertise required to effectively govern and guide the Group in future proofing the business. This includes climate risk, corporate social investment and governance expertise 1 See expertise brought to the Board on pages 19 and 20 12 Important expertise required to effectively govern the Group, which is listed on five stock exchanges The Board is satisfied that the directors have the appropriate balance of knowledge, skills, experience, diversity and independence to govern the Group effectively, considering its nature, size and scale of operations, and the laws and customs governing its actions. How often do directors rotate and retire from the Board? In terms of our Memorandum of Incorporation, all directors are subject to retirement by rotation and re-election by our investors at least once every three years. Newly appointed directors may hold office only until the next Annual General Meeting, at which point they retire and become available for re-election by our shareholders on the recommendation of the Board. At the Annual General Meeting held on 26 May 2023, all five of the directors who were up for re-election were elected, after making themselves available for re-election in line with our Board Charter. When identifying directors with the longest term in office since their last election, we consider their date of appointment as a Non-executive Director of Old Mutual Emerging Markets and/or Old Mutual plc, whichever is earlier, as these companies preceded the listing of Old Mutual Limited on the JSE. The time served on either the Old Mutual Emerging Markets or Old Mutual plc Board is added to the time served on the Old Mutual Limited Board in considering rotation and tenure decisions. How does the Board ensure that effective succession plans are in place for directors and executives? The Corporate Governance and Nominations committee is responsible for succession planning for the Board and key executives. The Board has an agreed succession pipeline, which identifies immediate and planned successors for all directors on the Board, including the specific roles fulfilled by these directors, such as committee Chairpersons. During 2022 the Board commenced engagements to expand its medium-term succession plans. Of particular focus was the succession plans for the eight directors who are scheduled to rotate off the Old Mutual Board between now and 2026. The succession pipeline for the Executive committee was also considered, particularly for the Chief Financial Officer, who reaches retirement age in 2024. 24 Integrated Report 2023 Message from the Chief Executive Officer Iain Williamson Chief Executive Officer Our strong financial delivery, despite the increasingly challenging macroeconomic environment, demonstrates both the resilience of our business and sound strategic choices. The operating environment continued to be challenging in 2023 for the Group and our stakeholders. Inflation eased during the year and the recession many had forecast at the start of the year did not materialise, customers remained under pressure due to high interest rates, petrol costs and unemployment as well as an ongoing confidence crisis which had a restrictive effect on economic growth. Despite this, we demonstrated resilience in the face of these economic conditions and created value for our stakeholders by focusing on our strategic initiatives during the year. Reflecting on our financial performance Our business remains well positioned for growth and continues to demonstrate its ability to provide customers with high quality solutions that sustain, grow and protect their prosperity. We have delivered profitable top line growth in a competitive environment while maintaining balance sheet strength and shareholder investment returns, including share buyback of R1.5 billion completed in October 2023. Life APE sales recorded robust growth of 17% from the prior year. This was primarily due to strong savings sales in Old Mutual Corporate, resilient retail and corporate sales in East Africa as well as higher guaranteed annuities sales in Personal Finance. We also delivered good growth of 14% on gross flows and gross written premiums. Our value of new business increased by 37%, with a corresponding increase of 10 bps in the value of new business margin. This was driven by increased risk sales and effective cost management in the Mass and Foundation Cluster and a higher proportion of profitable corporate sales in East and West Africa. The strong growth in guaranteed annuities sales and a shift in mix towards higher margin funds in Personal Finance contributed positively to the value of new business and value of new business margin. 1 African Development Bank Group: Macroeconomic Performance and Outlook (MEO), January 2024 2 McKinsey Report: Reimagining economic growth in Africa, June 2023 3 World Bank estimates Results from operations increased by 14% from the prior year. This was primarily driven by higher expected returns on the contractual service margin across our life businesses as well as positive economic variances due to good market performance. Profits also benefited from positive risk experience in Old Mutual Corporate and higher risk sales volumes in Mass and Foundation Cluster. Our dividend policy targets an ordinary dividend cover range of 1.5x to 2.0x adjusted headline earnings. The Old Mutual Limited Board declared a final dividend of 49 cents per share, with total dividends declared in 2023 amounting to 81 cents per share. Sustainable value creation Old Mutual is a leading financial services player and one of the largest asset managers in Africa. We remain mindful of our ability to positively impact the communities and economies in which we operate. The financial services sector plays a fundamental role in creating access, driving inclusion and empowerment and responsibly advocating for the millions of people who depend on us daily. With our roots firmly in Africa for over 178 years, we believe in the immense potential of Africa and its people. Africa’s long term growth outlook is significant. Over the immediate horizon, latest research1 shows that Africa is expected to account for 11 of the world’s 20 fastest growing economies in 2024. This is linked to factors such as the demographic dividend, as the continent is set to become home to the largest and youngest population by 20502. In addition, the full implementation of the African Continental Free Trade Area can further uplift economic growth and potentially lift 30 million people out of extreme poverty3. We also see opportunities in driving sustainable growth and building resilience against climate risks by accelerating the development of clean energy solutions. In recent years, investor trust and confidence in Africa has eroded, and decisive action is needed to rebuild and reposition it as a leading emerging market destination. In South Africa, the ongoing energy crisis, logistical challenges across our ports and railways, and service delivery challenges remain key constraints to economic growth. While we have a collective responsibility – partnering across the private sector, public sector and civil society – our ability to successfully unlock Africa’s full potential requires policy certainty and stability. As a responsible business, we are actively engaging in industry organisations such as Business Leadership South Africa (BLSA). Through Business for South Africa (B4SA), a structure of BLSA, our membership enabled us to play a part in supporting government to implement key priority interventions in the areas of energy, transport and logistics, crime and corruption, together with government counterparts. This included supporting the National Energy Crisis Committee. The National Energy Crisis Committee Energy Action Plan has shown substantial progress in its first year, addressing objectives such as ending load shedding, regulatory reforms, approval process streamlining and encouraging private sector investment in energy. At Old Mutual, creating positive futures is a core part of our identity. Sustainability is fundamentally integrated into our business activities. By responding to issues that are most relevant to our customers and operating context, we aim to positively contribute towards the economic environment and social outcomes while delivering business value. We do this through our focus on responsible investing, enabling climate action by supporting the Just Transition to a green economy and by driving financial wellness. As an asset owner, we seek to drive real-world outcomes through our various investment mandates. Our responsible investment approach encompasses the integration of ESG factors into our investment decisions, active stewardship, supporting industry-wide responsible investment initiatives and through public disclosures of our responsible investment policies and practices. As an asset owner, we seek to drive real-world outcomes through our various investment mandates. We invested R30.7 billion in renewable energy, R167 billion in the green economy and R1.3 billion in the low-income and affordable housing sector. We support climate action through our commitment to the Net Zero Asset Managers Initiative. To achieve our Net Zero Asset Owner Alliance 2025 intermediate targets, we aim to transition the global listed equity assets under management in our portfolios to net-zero aligned benchmarks by one-third each year until 2025. More recently, we signed the Nairobi Declaration on Sustainable Insurance, which further cements our commitment to progressing this agenda. The Nairobi Declaration on Sustainable Insurance commits member organisations to take action on some of humanity’s biggest challenges, including climate change, biodiversity loss, extreme hunger, human rights violations, poverty and social inequality. We actively drive financial wellness through our focus on financial inclusion, financial education and financial empowerment. We enable formal financial inclusion through our distribution reach to ensure that our financial solutions are easily accessible, and by developing affordable and accessible financial solutions. We have a multi-channel distribution footprint, including a large intermediary force of 41 117 tied and independent intermediaries, allowing us to be closer to the communities we serve. We continue to refine and launch new solutions to meet our customers’ most pressing needs, such as Old Mutual Health Solutions in South Africa and our fintech solution O’mari in Zimbabwe. Our financial education initiatives seek to bridge the knowledge gap to improve financial literacy and reaches 20.2 million people across Africa. We remain a leader in broad-based transformation and empowerment. This is reflected in our ongoing commitments to uplift not only our customers and broader communities, but also our employees. In South Africa, we retained our level 1 B-BBEE contributor status for the fourth consecutive year. We strive to be an employer of choice and in this regard have progressed our policies in support of fair and responsible pay. In 2023 we took a significant step towards reducing the wage gap for our South African employees by increasing the minimum annual salary to R180 000 per year effective 1 April 2023 and the policy was changed to ensure that South African based employees are appointed at this new minimum pay line. Through Bula Tsela, our broad-based share scheme, we delivered tangible value to retail shareholders by declaring the scheme’s first cash dividend. We also extended Bula Tsela to employees through an additional grant of shares as part of the Employee Share Scheme for new black, South African employees who joined the Company. These initiatives demonstrate our commitment to supporting meaningful financial empowerment across the South African landscape. 25 Integrated Report 2023 Message from the Chief Executive Officer continued Reflection on our strategy Our strategy remains anchored in our victory condition of becoming our customers’ first choice to sustain, grow and protect their prosperity. We believe in putting our customers front and centre of everything we do. This creates a solid foundation for sustainable long term growth and is key to building the most valuable business in our industry. It is central to our integrated financial services business of the future, which sees us partnering with our customers on their journey towards financial wellness. Given the continued challenges and financial pressures facing our customers, the need for a trusted financial partner is more imperative now than ever before. Old Mutual was recognised as one of South Africa’s top 10 strongest brands (Brand Finance Top 100 Brands Report, 2023), which confirms that our customer-led efforts are increasingly being recognised in the market. enhancing the adviser experience continues to yield encouraging results. We implemented targeted intervention, such as point of contact resolution, which resulted in an uplift in the overall adviser experience. We noted a material reduction in service-related complaints compared to the prior year. Old Mutual was the only insurer to improve its Net Promoter Score in the independent adviser market, according to a market survey (2023 NMG Survey, Net Promoter Score across independent financial advisers). From a distribution and digital engagement perspective, one of our top priorities is to improve the range of self-service offerings across our digital platforms. We expanded the functionality, making it easier for customers to purchase new products, access an adviser and manage their policies with us. Our direct and digital distribution channels, such as iWYZE and Pineapple, experienced solid growth as we sought to ensure accessibility through channels that are convenient to our customers. Active digital users across our Life and Savings businesses reached 1.4 million, up 17% from 2022. I am very proud of our continued progress in building the integrated financial services business of the future. Our successful strategic and operational delivery over 2023 supports us on our journey to building these integrated capabilities, and further embeds our competitive advantages in our chosen markets. Growing and protecting the core Across our core Southern African businesses, we focus on growth through the holistic coverage of customer needs, driving distribution and digital engagement and delivering operational efficiencies. We are encouraged by the positive trajectory in lead indicators, such as increasingly positive market sentiment, customer and intermediary feedback. Our progress reflects our unwavering commitment to maintaining the trust and loyalty of the customers and advisers. In the South African entry-level market, our ongoing shift to underwritten life sales, through Old Mutual Protect, supported good sales growth in our Mass and Foundation Cluster. As a result, we experienced a sustained market share recovery in this segment. We remain the market leader for risk and savings. This bears testament to the competitiveness of our risk value proposition and the strength of our distribution capabilities. The enhancements to MyOldMutual are progressing well. We launched a pilot of the latest version of our goals capability to a cohort of customer and advisers and continue to refine and iterate this based on user feedback. We delivered multiple enhancements to our Old Mutual Rewards programme and continue to see growth in membership numbers and customer engagement. We rolled out the programme to Old Mutual Namibia, further extending the availability of our integrated ecosystem across Southern Africa. Membership reached 2.2 million, up from 1.8 million at December 2022, exceeding our internal targets. Our efforts are being recognised as Old Mutual Rewards was a finalist at the International Loyalty Awards and received three accolades at the South Africa Loyalty Awards. Our Net Promoter Score improved to 70 (2022: 67), which validates that our actions resonate with our customers. Our relentless focus on We continue to reap the benefits of our ongoing journey to modernise and simplify our technology estate, with 2023 marking an important milestone in this journey. We concluded the migration of Greenlight, our legacy risk book in South Africa and Namibia, onto our new retail platform and decommissioning the old platforms is underway. Following the migration, our legacy Greenlight book and Old Mutual Protect proposition are on a single retail platform. This is a significant step in simplifying our South African life insurance operations while delivering operational efficiencies. We also embarked on further modernisation in our short term insurance operations, with Old Mutual Insure migrating its core platforms to the cloud, resulting in efficiencies and cost savings. The next step in our journey is to follow a similar process for our savings solutions by launching our new Savings and Income proposition and migrating our legacy book onto the Old Mutual Protect platform. Ultimately, this brings us closer to realising our integrated financial services business of the future and continually delivering value to our customers and shareholders. Having all our customers on a single technology platform for both our risk and savings solutions allows us to deliver a unified customer and adviser experience. It also allows us to benefit from our scale, which translates to a more competitive and lower cost to serve into the future. Unlocking new growth engines Our bank build in South Africa represents a critical component of delivering on our integrated financial services business of the future. An enhanced transactional banking capability allows us to partner with our customers, while generating new revenue streams for the Group. We remain on track and within budget with our bank build. In East and West Africa, our ‘pivot to corporate’ strategy continues to deliver pleasing results. In West Africa, we celebrated our 10-year anniversary in Ghana. Over the past 10 years, our business has grown to become an important part of the financial services landscape. We have made demonstrable progress in delivering innovative solutions for our customers. We have a good market position in Ghana Group Life, which is a market that is expected to be a growth engine for premiums in West Africa. The Corporate Group Life Assurance segment has a market share of 15% and is placed second within the industry. Outlook We remain committed to deliver profitable top line growth and new business by delivering an integrated holistic suite of solutions to our customers that leverages our leading distribution and digital capabilities. We will drive effective cost management to enable growth and profitability for the Group as we build our integrated financial services business of the future. We will continue to deliver on strategic initiatives to achieve our victory condition of becoming our customers’ first choice to sustain, grow and protect their prosperity. In March 2024, Old Mutual was selected as the winner of the News24 Long-Term Insurer of the Year award which recognises high client satisfaction scores as well as an assessment of our strategy, societal contribution and transparency. Our integrated financial services business of the future, which has our customers’ financial wellness at its core, and the planned launch of our bank are important building blocks to get even closer to our customers and be part of their everyday lives. Our section 16 submission for the bank build was completed and submitted early in 2024 and we are now awaiting approval from the Prudential Authority. As part of the section 16 submission, we were required to have the banking systems and processes independently verified in a working end-to-end scenario. In January 2024, we announced the sale of our full stake in UAP Insurance Tanzania, our short term insurance business to a group of current minority shareholders, pending regulatory approval. This decision follows a strategic review that identified challenges in achieving the desired returns on capital for the Tanzanian business. We remain committed to East Africa and will continue to strengthen our investment in corporate and retail propositions to position the business as a leading integrated financial service provider. We will expand our corporate offering, distribution channels, and customer base in East and West Africa. I want to thank all my colleagues for their passion and commitment in putting our customers front and centre of everything we do, which has enabled us to deliver robust operational and financial performance in a difficult operating environment. I thank our customers for trusting us to help them navigate their financial affairs as we remain that certain friend in uncertain times. To all our stakeholders, we appreciate your continued support and engagement. Our focus remains on building the integrated financial services business of the future, anchored in our victory condition of becoming our customers’ first choice and in doing so responsibly building the most valuable business in our industry. Iain Williamson Chief Executive Officer of Old Mutual Limited 26 Integrated Report 2023 t r o p e R e c n a n r e v o G e t a r o p r o C e h t m o r f t c a r t x E Our Executive committee Iain Williamson (53)1 Chief Executive Officer Casper Troskie (60)1   Chief Financial Officer  Celiwe Ross (44)1  Director: Group Strategy, Sustainability, People, Public Affairs  Clarence Nethengwe (52)1  Managing Director: Mass and Foundation Cluster BBusSci (ActuariSci), GMP, FASSA Service years1: 30 years Appointed to Executive committee: August 2015 Experience: Three decades of financial services experience spanning various roles at Old Mutual across employee benefits, personal finance, corporate development, distribution, technology and finance. Iain’s previous roles include Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of Old Mutual Emerging Markets. BCom (Hons), PGDA, CA(SA) Service years1: 5 years Appointed to Executive committee: March 2018  Experience: Extensive financial services experience serving as the former Chief Financial Officer of Standard Bank Group, Liberty Group and a partner at Deloitte. Casper served on the boards of Liberty Holdings, Liberty Group and STANLIB. BSc (MinEng), MBA  Service years1: 6 years Appointed to Executive committee: June 2018 Experience: Financial services experience with roles at Standard Bank focusing on project and structured finance and origination. Celiwe is the former leader of Egon Zehnder’s financial services practice advising clients on leadership needs and team effectiveness. BProc, BA, LLM, MBA, AMP, EDP Service years1: 14 years Appointed to Executive committee: June 2017  Experience: Former General Manager of Sales and Distribution for Mass and Foundation Cluster. Prior to joining the Group, Clarence practised as an attorney for over ten years and worked as a judicial officer for more than five years. Clement Chinaka (53)1  Managing Director: Old Mutual Africa Regions Garth Napier (45)1  Managing Director: Old Mutual Insure  Kerrin Land (50)1  Managing Director: Personal Finance and Wealth Management Khaya Gobodo (45)1  Managing Director: Old Mutual Investments BSc (Computer Science and Statistics), AMP, FASSA, FFA Service years1: 32 years Appointed to Executive committee: January 2017  Experience: Served in various roles at Old Mutual, including Chief Actuary and General Manager of Actuarial at Old Mutual Life Assurance Company (Zimbabwe) Limited, Head of Channel Finance, strategy executive at Retail Affluent and Head of Group Planning and Business Insights at Old Mutual Emerging Markets. 1 Age and service years as at 31 December 2023. BCom (Hons), MBA Service years1: 5 years Appointed to Executive committee: November 2018  Experience: Former Managing Director of Pep Africa and independent Non-Executive Director of Afrocentric Group board, with extensive experience in management consulting and strategy. BSc (Stats and Econ), Advanced Leadership Certificate, FASSA   Service years1: 28 years Appointed to Executive committee: February 2020  Experience: Served in various roles at Old Mutual, including Chief Executive Officer of Old Mutual Wealth and Business Development and Operations Director at Old Mutual Investment Group. Kerrin is a member of several Old Mutual Group companies and industry boards. BCom, MSC (Investment Management), CFA Service years1: 6 years Appointed to Executive committee:  January 2019  Experience:  Served in various roles at large, medium and boutique asset management firms. Khaya is the former Strategic Head of the Quality Capability at Ninety One Asset Management and the founding partner and former Chief Investment Officer of Afena Capital. South Africa South Africa Zimbabwe Zimbabwe 27 Integrated Report 2023 t r o p e R e c n a n r e v o G e t a r o p r o C e h t m o r f t c a r t x E Our Executive committee continued Prabashini Moodley (44)1  Managing Director: Old Mutual Corporate  Richard Treagus (58)1 Chief Risk Officer Zureida Ebrahim (47)1  Chief Operating Officer  BBusSc (Actuarial Science), FASSA Service years1: 21 years Appointed to Executive committee: November 2019 Experience: Served in various roles at Old Mutual across Personal Finance and Old Mutual Investment Group. Prabashini is the former Chief Financial Officer of Mass and Foundation Cluster. BBusSc (Actuarial Science), FIA, FASSA   Service years1: 35 years Appointed to Executive committee: October 2015 Experience: Served in various roles at Old Mutual, including Finance Actuary for the Individual Life division, Group Assurance Executive, General Manager of Product Development and General Manager of Savings Solutions. 1 Age and service years as at 31 December 2023. BCom (Economics and Law), MAP Service years1: 2 years Appointed to Executive committee: November 2021 Experience: Over 17 years’ experience in the insurance sector. Zureida is the former Chief Executive Officer of Client Engagement Solutions at Momentum Metropolitan and a member of the Momentum Metropolitan Executive committee focusing on transactional banking and client digital experience. Demographic diversity (%) Gender diversity (%) 2023 2023 ● White South African ● Black South African ● Non-South African 2023 36% 55% 9% 2022 33% 58% 9% ● Male ● Female 2023 64% 36% 2022 58% 42% Combined tenure 184 Changes to the Executive committee composition during the year Executive committee member: Maserame Mouyeme Date: 31 July 2023 Retired as Executive committee member South Africa 28 Integrated Report 2023 OUR STAKEHOLDERS AND VALUE CREATION In this section Our stakeholders Stakeholder management Stakeholder value creation Our value creation business model 30 31 33 36 29 Integrated Report 2023 Our stakeholders At Old Mutual, we champion mutually positive futures for our stakeholders and our business. We act ethically and conduct our core business activities to create sustainable value for the Group while benefiting and prioritising our shareholders, customers and employees and addressing the needs of broader stakeholders and the environment. The material relationships disclosed in this report have a significant influence or interest in the Group. They are founded on the Stakeholder Relations Framework, which prioritises stakeholders based on materiality and legitimacy. A stakeholder is material if they have the ability to influence the future of the organisation. We consider the potential of stakeholders’ actions, views or behaviour that could impact or influence Old Mutual’s strategy, performance and reputation. Stakeholders are legitimate when they have a direct relationship with Old Mutual’s dealings and interests. Customers Intermediaries Employees Our customers are the lifeblood of our business and we aim to be their first choice. Our customer base ranges from low-income to high-net-worth individuals, as well as SMMEs, large corporates and institutions. 12.5 million (2022: 11.9 million) Customers1 70 (2022: 67) Net Promoter Score R1.3 trillion (2022: R1.2 trillion) in funds under management Our intermediaries are a crucial link between Old Mutual and our customers. Intermediaries establish relationships with new customers and provide appropriate advice based on their needs. The disclosures in this report consolidate intermediaries into two groups: tied advisers (operating under Old Mutual’s licence) and independent intermediaries or brokers (operating under their own licence). Our physical distribution network includes: Tied advisers Independent financial advisers Independent brokers Franchise advisers Corporate consultants Sales agents We have a skilled and diverse workforce. Our people are our greatest competitive advantage, and we continue to prioritise their welfare. We rely on our highly motivated and engaged employees to put our customers first with every interaction. We have a workforce2 of 31 032 (2022: 29 460) comprised of: » 27 265 (2022: 25 893) employees » 3 767 (2022: 3 567) contingent workers Employee turnover Senior management 22% (2022: 26%) Women 42% (2022: 42%) Black people3 55% (2022: 61%) Investors Communities Regulators We rely on our investors for financial capital to ensure our operations can compete in their chosen markets and drive sustainable growth. 59% (2022: 61%) of our investors are South African. international shareholding Our communities include: We recognise the interdependence between our business and the communities we serve. To uplift our communities, we look beyond our operations to include socio-economic development in a way that is impactful and sustainable. Who invests in us 6.6% 2.6% 0.8% 1.5% 5.7% 2023 Top five shareholders. » PIC 16.76% » BlackRock Advisors LLC 4.51% » The Vanguard Group Inc 3.62% » Allan Gray 3.44% » Sanlam Investments 2.92% ● Institutions ● Brokers ● Employees ● Corporates ● Individuals ● Other 82.8% Citizens of the countries in which we operate Non-profit organisations Partners and suppliers Our business operates in a highly regulated environment, and our regulators play a key role in overseeing the financial soundness of our business, the strength of our governance processes and the treatment of our customers. We are regulated by 176 regulatory bodies and various laws in each country of operation. Total number of regulators 15 9 13 21 2023 17 10 16 48 10 17 ● Non-banking financial services ● Banking financial services ● Revenue services ● Financial crime ● Competition ● Labour and transformation ● Company and Listing Requirements ● Foreign exchange ● Data and privacy ● Other Total 48 10 17 16 10 17 21 13 9 15 176 Refer to our Sustainability Report to see details of ESG initiatives that create value for our stakeholders 1 Customer numbers for South Africa include policy count for Old Mutual Insure 2 We have refined our definition of employee and restated the 2022 numbers. Our workforce is defined as permanent and non-permanent Old Mutual employees and contingent workers which include consultants, contractors, service providers and vendors 3 The percentage relates to South African employees 30 Integrated Report 2023 Stakeholder management We create value for the organisation that delivers financial returns to our investors and positive outcomes for our stakeholders and society through our activities, interactions and relationships. Our stakeholders are the individuals or groups with a material interest in our decisions and activities. Our stakeholders provide useful insights about matters that are important to them, including economic, environmental and social issues that affect our ability to create value. Our commitment Three core commitments form the foundation of our stakeholder engagement mandate: » Our first commitment is to create value for all our stakeholders. Knowing our stakeholders and understanding their needs is important to us, as this forms the basis of all our relationships. Wherever there is shared value, there is a lasting commitment to building and growing together. » Our second commitment is to adhere to strong corporate governance in managing our relationships. Our Stakeholder Relations Policy ensures that the standards by which we operate across all our markets align with international best practices. The policy supports and promotes a stakeholder-inclusive model, consistent with Principle 16 of King IV and the AA1000 Stakeholder Engagement Standard. The policy is implemented through initiatives and engagements aimed at developing, delivering, monitoring and maintaining strong relationships between Old Mutual and material stakeholders. » Our third commitment is to follow a method of structured strategic engagement, allowing us to monitor and evaluate the quality of our relationships and their impact. Old Mutual has built strong relationships with key stakeholders across our markets of operation. During 2023, we proactively engaged these material stakeholders including governments, regulators, investors, communities and employees. We continued to strengthen these relationships by collaborating to address current socio-economic issues such as education, climate crisis, disaster and humanitarian relief support, as well as advance transformation. To fulfil these commitments we manage, govern and monitor our stakeholder engagements. Manage Govern Our dedicated central stakeholder relations function is responsible for implementing the requirements and deliverables in the Stakeholder Relations Policy to ensure that we observe effective industry and international practices in managing the needs and interests of our stakeholders. In the current year we: » Updated the Stakeholder Relations Policy » Developed and executed integrated engagement plans » Strengthened our stakeholder capability and management in Old Mutual Africa Regions through training on stakeholder relationship identification, mapping, engagements, reporting and measurement » Conducted the stakeholder relationship audit The Responsible Business committee oversees effective stakeholder engagement on behalf of the Board and in line with policy, governance codes and best practice. The Board, through the Responsible Business committee: » Reviewed the stakeholder relations audit findings on the strength of our material stakeholder relationships in South Africa and key markets in Old Mutual Africa Regions » Performed the annual review of our stakeholder engagements » Reviewed the engagement improvement plan aimed at addressing identified material issues and strengthening our Stakeholder Governance Framework Our stakeholder relationships were further overseen by the following Board committees: » Customers: Responsible Business committee and OMLACSA committee for Customer Affairs » Intermediaries: Responsible Business committee and OMLACSA committee for Customer Affairs » Employees: Remuneration committee and Responsible Business committee » Investors: The Board, Corporate Governance and Nominations committee and Audit committee » Communities: Responsible Business committee » Regulators: The Board, Audit committee, Responsible Business committee and Risk committee Monitor The Board monitors the quality and effectiveness of our stakeholder relationships and engagements. Stakeholder risks are incorporated into the risk management process and are identified, assessed, mitigated, and reported on in the same way as other risks. Refer to the Corporate Governance Report for a summary of interactions and topics covered by Board stakeholder engagements Our subsidiaries’ Boards adopt Old Mutual Limited’s Stakeholder Relations Policy and ensure that the applicable requirements are implemented and complied with. Subsidiary Boards must ensure local regulatory requirements are included in the policies adopted at a subsidiary level. We are proud of our decision as a business to be a responsible social partner within our markets, actively participating in industry bodies and professional associations that seek to drive financial inclusion in Africa. We are purposeful in lending our voice to conversations that shape the future of our continent, using international platforms, such as Angaza Women to Watch in Banking and Finance, Africa Insurance Organisation and the World Economic Forum to support the global sustainability agenda. We engage with our stakeholders regularly to understand, account for and respond to their needs and interests. We strive to build trust and a willingness to engage among our stakeholders to continuously improve the quality of our relationships. 31 Integrated Report 2023 Stakeholder management continued Building social and relationship capital We focused on improving and sustaining social and relationship capital through structured strategic engagements anchored in good corporate governance and shared value. Assessing stakeholder sentiment is integral to our Stakeholder Governance Framework, which is aligned to the Group Stakeholder Relations Policy and other related policies. We are working towards refining the methodology by measuring the materiality and legitimacy of our stakeholders and using an index to measure the strength of our relationships. Our objective is to embed disciplines that require intent, consistency and effectiveness in the practice of stakeholder management across the Group. This will transition: » The relational imperatives of the business from value extraction to value exchange » The approach of the business to stakeholder management from reactive to proactive » The stakeholder engagements of the business from irregular responses to structured strategic engagements, to continuously drive enhanced performance The effective management and monitoring of the organisation’s stakeholder relationships are therefore central in safeguarding our business performance, protecting our licence to operate and ensuring that our external relationships deliver value to the organisation, its stakeholders and the communities in which we operate. OUR STAKEHOLDER RELATIONS ACTIVITIES ARE BASED ON THE FOLLOWING OVERARCHING PRINCIPLES: Four principles » Inclusivity: This requires the business to understand the needs and priorities of its stakeholders in order to establish behaviours and activities that are mutually beneficial » Materiality: We recognise that stakeholders have the ability to materially influence the decisions made, actions taken and performance achieved by the Group, and this assists us in determining the relevance and significance of an issue to us and our stakeholders » Responsiveness: Organisational responsiveness is achieved by making prompt decisions, taking pre-emptive actions and the timely execution of actions, strategic interventions, and targeted communications with stakeholders » Impact: We are responsible for monitoring, measuring and accounting for how the actions of the organisation affect its broader ecosystems. Identified impacts are incorporated into stakeholder engagement activities and periodic materiality assessments inform governance, strategy, goal setting and operations, to enable more informed decision making and responsiveness Initiatives identified to improve relationships: » Partnering with governments, businesses and stakeholders to address climate change impacts, responding to communities’ immediate needs and providing humanitarian relief during times of distress » Collaborating with Brand South Africa and businesses at the 2023 and 2024 World Economic Forum meetings in Davos, where climate and energy were top of the agenda » Becoming the first corporate to partner with the African Continental Free Trade Area to launch the Africa Collective forum, which seeks to amplify the voice of and increase participation in the African agenda at the World Economic Forum » Delivering stakeholder and community engagements to support the Bula Tsela B-BBEE Scheme, which will transform the financial futures of beneficiaries, including our employees and communities » Engaging with governments in Old Mutual Africa Regions on value created through our operations and the ease of doing business, including through bilateral meetings with ambassadors and government representatives in the host countries and South Africa » Leading engagements, partnerships and thought leadership on the two-pot retirement system to create awareness and emphasise the importance of long-term preservation of funds to improve retirement outcomes 32 Integrated Report 2023 Stakeholder value creation Our interactions with stakeholders can materially influence our strategic thinking, actions and business performance. Therefore, we must monitor and measure these relationships effectively and transparently. By understanding our stakeholders’ needs and priorities, we ensure our Group strategy facilitates behaviours that are mutually beneficial. To the extent possible, our stakeholders can provide input into decisions that could potentially impact them. By following this approach, our strategy safeguards our business performance, protects our licence to operate and ensures our stakeholder engagements continue to promote mutually beneficial outcomes. Customers Intermediaries What our stakeholders care about » Meeting their financial goals » Investment performance and access to local and offshore markets How we engaged » Traditional distribution channels (including branches and intermediaries) » Personalised engagement, insight and advice » Innovative, flexible, personalised and affordable » Strategic partnerships and worksites » Digital apps and tools that enable products » Competitive and transparent pricing » Omni-channel experience and ease of use » Fast and efficient customer service » Responsible and appropriate advice » Easy access to funding for SMMEs » Relief in times of significant financial difficulty self-service » Customer communication » Media channels » Bespoke events and sponsorships » Annual and interim events and reports Focus areas in 2023 » Progress on delivering an integrated financial services experience for our customers, including launching health solutions in South Africa while building our banking offering » Providing value-for-money financial solutions to our customers in a responsible way » Developing our smart goals financial wellness platform Value created Relationship value for customers » Integrated financial services to sustain, grow and protect their prosperity and meet their financial goals » Peace of mind from partnering with a trusted and respected brand » Efficient delivery and timely payment of claims and benefits » Enhancing our digital channels to make it easier » Easy access to advice and services to interact with us » Using robotics to simplify our processes, giving time back to customers by reducing servicing and processing time » Improving our brand marketing and advertising » Providing easy access to funding to SMMEs through SMEgo » Financial education and Old Mutual Rewards through a channel of customers’ choice Relationship value for Old Mutual » Income generated from products and services that serve our customers’ needs » Ability to reach customers through new and existing distribution channels » Opportunities to cross-sell to our customers through our integrated financial services What our stakeholders care about » Ease of doing business in assessing customers’ current financial context, setting financial goals, reflecting on their present state and required future state, preparing for unplanned events and funding goals through savings and investments » Digital capabilities that enable holistic advice, engagement, sales, servicing and practice management » Product and regulatory training » Fair incentives that reward efforts » Association with a brand that delivers on its promises » Being enabled to meet a broad range of their customers’ needs » Understanding adviser daily experiences in servicing customers and removing the impediments to execution and delivery » Transforming the adviser base in the market Focus areas in 2023 » Research to understand the daily experiences of intermediaries in servicing customers » Simplifying tools and processes and expanding servicing capabilities, including providing dedicated support » Providing ongoing training to improve the experience of our intermediaries through our sales academies » Continuing to provide market-related incentives and rewards to our intermediaries » Providing a comprehensive range of solutions through value-enhanced propositions » Using technology to automate administration, effective record keeping and communication to free up time for advisers to service customers » Launched initiatives to support succession in independent financial adviser practices How we engaged » Market-leading training and development through sales and advice academies » Branches and worksites » Digital apps and tools and toolkits to enhance their efficiency and productivity » Conferences, roadshows and bespoke events (online and in person) » Annual and interim events and reports Value created Relationship value for intermediaries » Access to training and development » Market-related financial rewards, incentives and remuneration models » Enhanced customer relationships » Practice management has provided the required frameworks and tools for advisers to navigate internal and external environments, manage stakeholders, and predict and mitigate risk Relationship value for Old Mutual » Significant competitive edge that serves a wide range of customers » Maintaining customer satisfaction levels » Accessing new customers and better servicing of existing clients » Execute our integrated financial services ambition » Have face-to-face interactions with our customers » Build trust and relevance through meaningful engagements with our customers » Drive sales growth » Agent efficiency and productivity 33 Integrated Report 2023 Stakeholder value creation continued Employees Investors What our stakeholders care about » Transparent reporting and disclosures » Long-term sustainable financial returns and distributions » Understanding the capital allocation decisions and the drivers for unlocking value and growth » Effective strategic execution, earnings consistency and How we engaged » Investor roadshows and annual update » Stock Exchange News Service announcements » Annual General Meetings » Local and international conferences sustainable operational performance attendance » Experienced management team and stability » Strong financial control environment, including corporate » Annual and interim events and reports » One-on-one meetings with significant governance and ethics frameworks investors Focus areas in 2023 » Maintaining a well capitalised and efficient balance sheet » Strong delivery of our operational objectives and the Group Value created Relationship value for investors » Sustainable returns on investment strategy » Maintaining transparent reporting and disclosures in line with reporting standards, and internal policies and procedures » Improving returns on capital with a focus on segmental capital efficiency, return on net asset value optimisation and value of new business Relationship value for Old Mutual » Access to financial capital which, in turn, supports long-term growth » Ability to fund operational objectives and contribute positively to other stakeholders How we engaged » Pulse Culture Surveys » Workday, our digital human capital technology solution » Leadership sessions and employee forums » Employee resource groups that drive transformation, inclusivity and diversity » Internal communications, intranet, monthly organisation magazine and broadcasted channel » Management roadshows and town hall meetings » Annual and interim events and reports » Collective bargaining for organised labour and employee formations » Employee assistance programme, which provides counselling and advisory services » Wellbeing seminars, emotional impact sessions for teams under stress, segment wellness days and weekly articles through our intranet » Digital learning opportunities, talent programmes and employee bursaries Value created Relationship value for employees » Fair and responsible pay » Financial and non-financial rewards » Access to skills development and training opportunities » Being part of an organisation where they feel engaged, empowered and motivated » Flexible hybrid working model Relationship value for Old Mutual » Skilled, experienced and high-performing individuals in the right jobs who contribute to our purpose, victory condition and values » Enhanced employee satisfaction and retention What our stakeholders care about » Competitive reward structures and benefits » Career growth, succession planning and access to training and skills development opportunities » An inclusive, diverse and equitable culture that is safe and enabling » Addressing mental health and overall wellness » Flexibility in our operating model to promote work/life balance » Right to freedom of association » Transformation Focus areas in 2023 » Introduced a minimum salary aligned to our commitment to fair and responsible pay » Driving our culture transformation journey based on the insights of our Pulse Culture Survey and providing feedback and action plans » Upskilling and reskilling employees to develop various technical and role-specific skills and behaviour to enable a future-fit workforce » Leadership development programmes targeting junior, middle, senior and executive levels in the organisation » Progressive revision of our Parental Leave Policy making it more inclusive and gender-neutral » Refining our hybrid working model while remaining agile in our approach to accommodate various employee roles in the organisation » Executive wellbeing health risk assessments for senior leaders to address and support health or psychosocial risk factors identified » Talent management through strategic succession planning » Refreshed required learning approach to support our focus on ethics, risk and compliance and employment relations policies 34 Integrated Report 2023 Stakeholder value creation continued Communities What our stakeholders care about » Responsible business behaviour and outcomes » Financial education and inclusion » Skills development and employment opportunities » Access to supplier enterprise development opportunities » Community development » Education support » Access to funding programmes » Climate change activism » On-the-ground support during crises How we engaged » Community projects and outreach campaigns » Financial education workshops, lectures and media training » Offering bursaries for tertiary education » Supplier development initiatives » Media channels » Conferences and seminars » Annual and interim reports » Thought leadership podcast series on responsible lending » Professional bodies and associations » Direct partnerships » Financial donation and giving time to social development initiatives » Our employee volunteer initiatives Focus areas in 2023 » Providing literacy and numeracy programmes to scholars » Reaching people across Africa through our financial inclusion and financial education initiatives » Support in humanitarian disaster relief efforts, including community recovery and risk reduction initiatives » Continued to invest in the training and development of our suppliers to help their businesses become sustainable » Our enterprise and supplier development programme supports SMME growth by developing business skills through collaborative training and mentorship » Providing bursaries and workplace experience opportunities to students, learners, interns and trainees » Progressing the agenda on black asset managers by including smaller industry players in our value chain and member representations on trustee Boards and climate change Value created Relationship value for communities » Gradual improvement in literacy levels, rising awareness of importance of the role of parents in education and enhanced access to quality education » Awareness of preserving our environment » Increased capacity to respond to disasters resulting in reduced loss of life and livelihoods » Resilient communities » Access to bespoke financial education, skills development initiatives and financial inclusion » Access to advice, products and services that support business development » Through our enterprise and supplier development fund, we create jobs, a market for small businesses and maximise targets for the enterprise and supplier development element on the Financial Sector Charter scorecard Relationship value for Old Mutual » Opportunity to positively influence our broader ecosystem Regulators What our stakeholders care about » Legislation that protects customers » Compliance with laws, regulations and standards in the industry we operate in, including regulatory reporting » Contribution to the national fiscus through corporate taxes » Provision of quality products and services to our customers » Maintain the integrity of the market by preventing market manipulation, insider trading and other activities that could undermine the market’s fairness and efficiency » Sustainability and resilience of industry participants they regulate, which strengthens the financial services sector » Ensuring systemic and organisational resilience regarding climate change and its related risks Focus areas in 2023 » Implementing IFRS 17 across the Group » Maintaining strong solvency positions across the Group in line with our internal solvency targets » Continued focus on maintaining robust risk management and control systems within the Group » Strengthening operational resilience and oversight of third party risk » Delivering on the enterprise supplier development fund as part of our strategy to support SMMEs » Maintaining our commitment to transformation in South Africa; Old Mutual is proud to have maintained our level 1 B-BBEE status » Participated in the retirement reform developments in South Africa and made substantial progress with the implementation of the developments in our business » Engaged with the Prudential Authority on our climate change strategy and milestones reached » Risk management through the identification of politically exposed persons and screening for financial crime offences How we engaged » The Chairman, Board and Audit committee met with the Prudential Authority in South Africa on separate occasions during the year » The Boards of our subsidiaries also engaged with regulators in their regions regularly » Participating in public forums » Actively partake in the processes shaping new regulations and bills in the jurisdictions where we operate » Contributing to discussions with industry bodies and industry forums » Delivering on our responsible business agenda » Continued focus on strengthening the control environment and solidifying the quality of our customer service Value created Relationship value for investors » Direct and indirect tax contributions in the regions where we operate » As a responsible industry participant, we contribute to a more predictable, efficient and confident regulatory environment that support the overall health and sustainability of the industries we operate in Relationship value for Old Mutual » Ability to effectively manage regulatory risk » Ability to strategically align our business to emerging regulatory requirements and maximise the value to other stakeholders » Maintaining our reputation of being a responsible and sustainable business For information on the quantification of value created, preserved or eroded for our stakeholders, please refer to our business model on pages 36 to 37 For information on the Board’s engagement with our stakeholders, refer the Corporate Governance Report For information on how we discharged our responsibilities to our stakeholders, refer to the Sustainability Report 35 Refer to the Corporate Governance report for details on how ethics are governed Integrated Report 2023 s l a t i p a C l a t i p a C e c n a n r e v o g 1 s t u p n I Our value creation business model Through our integrated business model, we actively manage the resources and relationships we rely on to create sustainable and responsible value for our stakeholders. FC Financial HC Human MC Manufactured IC Intellectual SC Social and relationship NC Natural Our shareholder and debt funding underpins our strong capital base and supports our operations and fund growth. Financial capital includes the funds our customers invest with us. Our culture and our people, tied advisers, our collective competencies, experience, motivation to innovate and investment in skills development increases our competitiveness and capabilities. The physical and digital infrastructure through which we conduct business activities includes our branch network, digital platforms and information technology estate, which we are enhancing and simplifying. We rely on our trusted brand and franchise value, strategic partnerships and innovative capabilities and expertise. Our relationships with all our stakeholders are important to us, including deep ties with the communities we operate in. Our business activities require us to use natural resources, with a resulting influence and impact. » Audit committee » Related Party Transactions committee » Risk committee » Technology and Platforms committee » Related Party Transactions committee » Remuneration committee » Responsible Business committee » Technology and Platforms committee » Audit committee » Related Party Transactions committee » Responsible Business committee » Risk committee » Technology and Platforms committee » Audit committee » Corporate Governance and Nominations committee » Related Party Transactions committee » Technology and Platforms committee » Audit committee » Related Party Transactions committee » Responsible Business committee » Risk committee » Technology and Platforms committee » Responsible Business committee » Risk committee » Equity of R58.6 billion (2022: R60.2 billion) » Borrowed funds of R16.1 billion (2022: R16.7 billion) » Funds under management of R1.3 trillion (2022: R1.2 trillion) » 31 032 (2022: 29 460) workforce » 41 117 (2022: 39 465) tied and independent intermediaries » 691 interns and trainees » R241.6 million (2022: R176.4 million) invested in employee and leadership learning and development » Average age of employees 37 (2022: 37) » Additional grant of 5 million shares to the value of R60.1 million to black employees through Bula Tsela Employee Share Scheme » 796 (2022: 826) retail branches » 48 331 worksites (2022: 48 731) » 193 (2022: 189) branded ATMs » AI and robotics capabilities using data-driven insights » Fully functional and enhanced digital platforms » Largely cloud based information technology estate in South Africa » A 178-year track record of delivering financial solutions » Strong strategic partnerships » Scalable digital capabilities built in simplified and secure technology estate » Innovative culture underpinned by the right employee skillset and mindset » 2.2 million (2022: 1.8 million) » 12.5 million (2022: 11.9 million) Old Mutual Rewards members customers » R106.2 billion (2022: R100.8 billion) claims and benefits paid » 66% (2022: 43%) of our supplier base constitutes SMMEs » R66.7 million (2022: R102.8 million ) in entrepreneurial funds disbursed by Masisizane Fund » R18.5 million (2022: R15.3 million) spent on bursaries » Contributed to transformation and empowerment in South Africa » Increased unemployment, poverty and inequality in the regions where we operate » Load shedding is causing disruption to business operations due to degradation in telecommunication services and internet connectivity » R30.7 billion (2022: R26.7 billion) of proprietary assets invested in renewable energy » R2 billion (2022: R2.2 billion) of proprietary assets invested in water and sanitation » 22% (2022: 23%) reduction in emissions since 2019 » 24% (2022: 22%) reduction in electricity usage since 2019 » Integration of material climate- related risks and opportunities into investment decisions » Six Green Star rating from Green Building Council of South Africa for Mutualpark » Increased electricity and water disruptions in South Africa » Longer-term implications of climate change pose risks to many of our capitals, particularly natural capital l a t i p a C i s t n a r t s n o c » Surges in inflation in emerging and developing economies » Affordability concerns due to difficult operating environment » Balancing strategic investment with cost-cutting initiatives » Currency devaluation in our African markets and their ability to remit earnings 1 Unless specified, all input data is at year end » Attracting and retaining top talent with the right skills in a competitive environment » Hybrid working reduces in-person work and collaboration between employees » Slow digital adoption rates among advisers and customers » Increased digitalisation needs to be enabled by effective information security controls » Agility to rapidly respond to competition threats posed by digitisation and platform based ecosystems Refer to the Corporate Governance Report for details of the various committee mandates 36 Integrated Report 2023 We perform our core business activities Gather capital by providing financial advice, savings and investment solutions Invest this capital to achieve returns for our customers, in ways that are good for society Through our Segments Supported by our Enabling functions Protect our customers by taking on and pooling risk that they are unable to carry individually To deliver holistic solutions and financial advice catering to our customers’ lifetime financial needs and delivering on our victory condition Governance and sustainability We govern our activities in a way that ensures we deliver on our strategy. At the same time, we focus on scaling our positive impact on the communities in which we operate and the wider environment. Stakeholder outcomes1 Customers Intermediaries Employees Investors Communities Regulators » R120 million worth of Old Mutual Rewards points redeemed in 2023 » 1.4 million (2022: 1.2 million) active digital users » 47 851 (2022: 53 000) claims initiated via WhatsApp, USSD and websites » 70 (2022: 67) customer Net Promoter Score » Enabled the generation of 2 716 invoices to the value of R1.8 billion (2022: R94.7 million) on SMEgo platform » Facilitated the disbursement of R6.2 million (2022: R9.6 million) in funding to SMMEs » R8.1 billion (2022: R7.4 billion) paid in fees and commission » R119.7 million (2022: R100.3 million) spent on intermediary training » R14.3 billion (2022: R12.4 billion) paid in salaries and benefits » In South Africa, 55% (2022: 61%) of senior management is black » 4.86 (2022: 4.84) employee Net Promoter Score » 22% (2022: 26.1%) employee turnover » Full-year dividend of 81c (2022: 76c) per share » First Bula Tsela dividend of 49c per share » 14% increase to R8.3 billion (2022: R7.3 billion) for results from operations » Improved financial performance, with return on net asset value up by 170 bps to 11.1% (2022: 9.4%) » R1.2 billion (2022: R780 million) in interest paid » R1.5 billion in share buyback transactions » R166.8 billion (2022: R146.2 billion) invested in the green economy » R1.3 billion (2022: R1.4 billion) of proprietary assets invested in low-income housing » R18.5 million (2022: R15.3 million) in bursaries » 10 035 (2022: 5 270) SMMEs reached » 20.2 million2 (2022: 36.6 million) people reached for financial education » 9 million (2022: 6 million) financial wellness activities completed on Old Mutual Rewards » R15.6 billion (2022: R14.7 billion) paid in taxes » Group solvency ratio decreased by 1 000 bps to 178% (2022: 188%) » Maintained our level 1 B-BBEE status » Participated and contributed to industry engagements and thought leadership, including ESG and shared value engagements FC SC MC IC FC HC SC FC HC FC NC FC SC SC FC NC 1 Unless specified, all outcome data is at year end 2 This metric comprises of financial education social media reach as well as face-to-face financial education. In the last year, the social media platforms X and Facebook have changed their data extraction methodologies to no longer include organic reach figures. This has resulted in the decrease in number from 2022 37 Integrated Report 2023 OPERATING CONTEXT In this section Material matters overview Macroeconomic environment Industry trends Regulatory changes 39 40 41 44 38 Integrated Report 2023 Material matters overview Our material matters are intrinsically linked to our operating context. Our operating context creates risks and opportunities to which we respond through our strategic objectives. In our report, our material matters are mapped to our operating context, our top risks and opportunities, stakeholders and strategic objectives. An emphasis on material matters improves internal and external decision making and enables efficient and productive capital allocation by limiting extraneous information and focusing disclosure on the core issues managed by our organisation. The material matters identified have an impact on our stakeholders, introduce risks and opportunities, inform our strategy and business model and drive value creation, erosion or preservation. Macroeconomic and socio-political environment Changing customer expectations and needs Technological disruption Talent management Climate change Regulatory requirements g n i t a r e p O t x e t n o c l s r e d o h e k a t S d e t c a p m i s k s i r p o T i c g e t a r t S e s n o p s e r d e t c a p m I s l a t i p a c Macroeconomic factors that impact economic growth and potential political and social instability in the countries in which we operate. Evolving customer needs have created a shift in spending priorities, increasing comfort with digital interaction, with an emphasis on wellbeing and financial inclusion. Rapid technological advancements, digital distribution platforms, non-traditional market entrants and risk management technology impacts opportunities and market size. Demand for skills and the increased mobility within the labour market, post pandemic work preferences and skills retention challenges. Long-term shifts in global or regional climate patterns creates uncertainty in underwriting natural event risks and is a threat to the communities and countries in which we operate. Transitioning to low carbon economy may impact the value of assets or the cost of doing business. The increasing intensity of regulation and the pace of regulatory change increases the cost, complexity and the burden of compliance for our organisation. Customers Investors Intermediaries Customers Intermediaries Customers Investors Intermediaries Employees Employees Communities Investors Customers Regulators Customers Regulators Investors » Growth risk » Sovereign risk » Organisational resilience risk » Credit risk » Non-life insurance risk » Growth risk » Technology, information security and data risk » Organisational resilience risk » Credit risk » Non-life insurance risk » Growth risk » Strategic execution risk » Technology, information security » Growth risk » Strategic execution risk » People risk and data risk » Climate risk » Life insurance risk » Organisational resilience risk » Non-life insurance risk » Growth risk » Strategic execution risk » Organisational resilience risk Holistic coverage of customer needs Distribution and digital engagement Operational efficiencies Strategic growth business Strategic growth markets Holistic coverage of customer needs Distribution and digital engagement Operational efficiencies Strategic growth business Strategic growth markets Holistic coverage of customer needs Distribution and digital engagement Operational efficiencies Strategic growth business Strategic growth markets Agile delivery through engaged employees Holistic coverage of customer needs Strategic growth business Strategic growth markets Holistic coverage of customer needs Operational efficiencies FC Financial HC Human MC Manufactured SC Social and relationship FC Financial MC Manufactured IC SC Intellectual Social and relationship FC Financial HC Human MC Manufactured IC Intellectual HC Human MC Manufactured SC Social and relationship FC SC Financial Social and relationship NC Natural FC IC Financial Intellectual 39 Integrated Report 2023 Macroeconomic and socio-political environment To ensure the Group’s long-term sustainability and maintain Old Mutual’s relevance in our operating markets, we monitor our external environment and consider this context during our annual strategy development processes to remain agile while executing our long-term strategy. Global The recession forecast at the start of 2023 did not materialise as central banks consider rate decreases in 2024 since inflation has largely subsided after multi-decade highs. The US was economically resilient during 2023, with growth ending at a stronger-than-expected 2.5%. Recent data suggest US economic growth will moderate in 2024 from current levels and reduce inflationary pressures and interest rates. Growth in emerging economies like China will likely help prevent a global recession. China’s economy-wide deflation will require further incremental fiscal and monetary policy changes to help relieve troubled sectors. The resultant high-risk trading environment (risk-on trade) will likely benefit South Africa. Since October, news headlines have been dominated by developments in the Middle East. The conflict, which has deep and complex roots, will potentially impact the global economy – most notably, the world’s energy markets. South Africa South Africa experienced weak economic growth during the first half of 2023, albeit better than expected, driven by the private sector’s resilience, effective use of machinery and technology, and additional private electricity becoming available. While the negative growth rate in Q3 prompted fears of a recession, growth was weak. High inflation and interest rates and an ongoing confidence crisis continue impacting consumers. This was alleviated by recovering employment rates after the pandemic and the July 2021 unrest. 2.2 million jobs were created in 2022 and 2023. Inflation eased from 7.8% in July 2022 to 4.7% by July 2023, then increased to 5.1% by year end due to Avian flu impacting chicken and egg prices, floods impacting vegetable prices and increased petrol prices from August to October 2023. From April 2024, inflation is set to ease to 4.5% and allow for interest rate cuts. The current repo rate is restrictive, slowing demand and placing downward pressure on prices. Credit growth slowed to 4.9% year on year by December, largely because of lower demand from corporate borrowers. Lower inflation and interest rates, along with the ongoing recovery in employment, should ease demand on consumers in 2024. The recent increase in effective personal income tax will burden higher- income groups more than lower to middle-income groups. The rand exchange rate will likely benefit from US rate cuts, resulting in softer dollar and a risk-on trade globally. The rand is weaker than fundamentals suggest, likely pricing in more risk than needed. The 2024 budget highlighted a worsened budget deficit from 4% to 4.9% of gross domestic product (GDP) during the 2023/2024 fiscal year with stronger further fiscal consolidation than expected. Lower deficits, ongoing primary surpluses and a lower and earlier peak in the debt ratio should contribute to improving the fiscal environment, bolstered by responsible use of the Reserve Bank’s unrealised profits on foreign exchange reserves. African Regions Inflationary pressure continues to impact most economies, particularly Malawi, Zimbabwe and Nigeria. In East Africa, although still elevated, inflation growth rates stabilised in Q3. Most central banks maintained elevated interest rates. Malawi’s growth prospects are plagued by persisting challenges relating to fuel and foreign currency shortages, and a decline in maize output. All Old Mutual Africa Regions markets apart from South Sudan (-2%) registered GDP growth in 2023. The weighted average 2023 GDP growth rate for these countries is 4.79%. Fiscal constraints led to increasing taxes, notably in Kenya, Zimbabwe and Ghana. Sovereign risk remains a key issue. Kenya faces maturities of domestic debt and foreign USD-denominated debt within the next year. Malawi’s total public debt increased by 37.6% year on year to 75.0% of GDP. Currency depreciation against the USD and chronic dollar shortages in some markets hamper foreign currency-denominated obligations like dividend payments and Group charges remittances and payments for critical systems. In Zimbabwe, rapid currency depreciation followed post election political fragility as tensions from the election outcome intensified. eSwatini national elections in Q3 2023 faced minimal disruption. In Kenya, political risk is de-escalating after initial protests in Q3 against the rising cost of living and tax reforms. In Nigeria, the response to the new administration was largely muted. Planned industrial actions did not materialise and reforms are being implemented swiftly. Ongoing marches in Ghana signified increased dissatisfaction with governmental decisions, impacting key services. The regulatory environment remained uncertain across many markets and lines of business. Regulatory changes ranged from cyber and data security governance to bills on universal health care. Many of these and new changes could materially affect our businesses. In Kenya, four new bills relating to universal health care will be tabled to parliament. In Ghana, the National Insurance Commission issued two new draft directives on governance and conduct of business for insurers. Outlook While global growth will be softer in 2024, it is expected to not weaken any further in 2025. Compared with 2.7% in 2023, growth is expected to reach around 2.3% in 2024 and 2025, likely softening in developed economies while remaining relatively stable in emerging economies. There are downside risks from potential spikes in the global oil price if the conflict in the Middle East escalates and growth falters in China, and global tension could increase because of several key elections taking place in 2024 and the stalemate in the Russia/Ukraine war. While global inflation is decreasing, the extent of the decline remains uncertain and will likely depend on the extent of the slowdown in real economic activity. New geo-political developments will continue to impact commodity prices. Supply chain disruptions and the risk of elevated Brent crude prices present an upside risk to inflation, impacting interest rate decisions and crafting economic outlooks. South African inflation will likely settle to the mid-target range – around 4.5% – for most of 2024. Related risks » Growth risk » Sovereign risk » Organisational resilience risk Strategy and business model responses » We are reducing our exposure in long-dated government papers with elevated sovereign risk, pausing the development of guaranteed products and responsibly and systematically reducing government bond exposure in our Africa regions » Set exposure limits to South African sovereign credit risk linked to an internal sovereign risk dashboard » Engaging with banks and other stakeholders in Malawi to ensure foreign exchange liquidity for dividend remittances » Conducting impact and compliance gap assessments of new legal and regulatory developments to proactively comply » Diversifying product offering across our business » Reducing the running expenses in the business through operational efficiency initiatives » Improving our power resilience in our campuses and branches to maximise operating hours during load shedding » Establishing the Crisis committee, which is invoked if there is a major business resilience event 40 Integrated Report 2023 Industry trends In recent years, business agility and innovation have become increasingly important for consumers and investors. To remain relevant in the ever-evolving financial services landscape, it is critical for us to have a clear view of the trends that shape our industry. This ensures that our strategy development and execution remain contextual to the current climate and anticipated market shifts. As part of our continual monitoring of our environment, we provided an overview of the material trends defining our business landscape, while outlining the associated value creation opportunities and related risks. These trends should not be viewed in isolation as their confluence has the ability to disrupt the broader industry. Changing customer expectations and needs The evolving customer landscape The customer landscape continues to evolve rapidly, with their needs and expectations being shaped by external factors. This includes a constrained macroeconomic and employment backdrop, a shift in spending priorities, increasing comfort with interacting through digital means and a greater focus on holistic wellbeing and longevity. With employment levels and disposable income remaining under pressure, consumers are increasingly mindful of their financial choices and the companies they choose to do business with. More consumers are struggling to make ends meet and resorting to formal and informal sources of credit to cover shortfalls. Concurrently, they reprioritise their spending to focus on essentials such as food, health and medication. The latter continues to gain prominence as people are living longer, and have a greater appreciation for their holistic wellbeing in a post COVID-19 world. As a result, customers are becoming more discerning, with a strong focus on product affordability, transparency and value for money. They seek adaptable, personalised solutions to cater to their changing needs, preferences and life stage. Organisations that view retail, corporate or small business customers as unique and understand their circumstances, while engaging them based on their personal preferences and needs, gain advantage relative to their peers. Customers are becoming more aware of how institutions conduct themselves as responsible corporate citizens. This is intricately linked to trust, which is an important currency in today’s business landscape. We have observed greater levels of comfort with interacting digitally, particularly post COVID-19. Despite this shift, digital penetration remains relatively low in Africa. Research suggests that consumers in Africa do not view digital distribution channels and engagement mechanisms as a substitute for face-to-face customer engagement, particularly in the non-banking financial services sector. Enduring challenges that create barriers to digital penetration include low financial literacy levels, high data and device costs, inadequate infrastructure, a trust deficit in digital technology and the prominence of legacy systems in the industry, leading to slow adoption of new technology. This is poised to change with the expected increase of internet penetration in Africa. The growing need for financial inclusion Financial inclusion continues to be a challenge across most of Africa and emerging markets. Consumers’ inability to access credit, financing and insurance solutions reinforces their fragile financial situation and constrains broader socio-economic upliftment. To date, African markets have shown some of the world’s lowest insurance penetration levels. This protection gap poses great danger to individuals and organisations given recent weather events, resulting in consumers being left in severe financial distress. The COVID-19 pandemic and economic downturn have curbed insurance penetration growth in Africa, with consumers cutting down on discretionary spending, including insurance. Growing need for financial inclusion 85% 79% 41% 19% 85% 12% 41% 19% 45% 40% 36% 23% 71% 2% 71% 68% 46% 29% 36% 66% 23% 2% 17% 15% 1% 17% South Africa Kenya Namibia Ghana Access to insurance Access to credit or financing Ability to save and invest Ability to transact Source: Findex 2021 (excl. Botswana at 2017), World Bank, Press, National Insurance Regulators, McKinsey research When considering the macro landscape, South Africa shows good performance on basic metrics of financial inclusion compared to regional and income group peers, according to Global Findex data. However, several comparable economies, including Kenya, India and China, significantly outperform South Africa through the provision of digital financial services ecosystems that serve low-income consumers. This presents an attractive opportunity to employ digitalisation strategies to help bridge the access gap to formal financial services. This, coupled with financial education, will ensure that customers are empowered and sufficiently equipped when engaging with mainstream financial services providers. Related risks » Growth risk » Technology, information security and data risk » Organisational resilience » Credit risk » Non-life insurance risk Strategy and business model response » Expand customer value through enhancements to our Old Mutual Rewards programme » Deliver flexible and modular risk and savings solutions, such as Old Mutual Protect » Meet a broader set of health-related needs through Old Mutual Health Solutions » Develop personalised solutions, such as usage based insurance Related risks » Growth risk Strategy and business model response » Support formal financial inclusion through the development of affordable and accessible financial solutions » Drive financial wellness by delivering financial education to contribute to socio-economic upliftment and financial empowerment » Invest in our East and West Africa operations 41 Integrated Report 2023 Industry trends continued Technological disruption The fast-paced nature of technological advancement shapes how organisations do business and changes the competitive landscape across the broader financial services sector. Digitalisation Organisations continue to rethink their operating models to better service their customers through using technology efficiently while remaining cognisant of data privacy and associated risks. One of the biggest highlights during the period under review was the tipping point in the advancement of generative AI and machine learning. A key contributor to the scaled use of this technology was the introduction of ChatGPT at the end of 2022, which enabled the broad use of generative AI. The mass utilisation of tools such as ChatGPT ensured the enrichment of data through machine learning, which can be used by interested parties such as financial institutions. This brought the opportunity for businesses to explore various use cases for the application of AI technology. Some key applications already deployed by African financial services players to increase efficiency and ensure cost containment include process automation, hyper-personalisation, streamlined verification processes, data analysis, fraud detection methods, new product development and marketing. The rise of AI also resulted in the scaled optimisation of established technological trends that have been shaping the finance industry for years, such as digitalisation, gamification, social commerce, Internet of Things and big data. While generative AI can enhance efficiency, automate tasks and improve decision making, it also introduces vulnerabilities that must be carefully managed. A primary concern is the potential for malicious actors to exploit AI models, leading to fraudulent activities, data breaches and financial losses. Regulatory bodies governing the financial services industry have had to introduce robust measures to ensure the protection of customer data and privacy to prevent new technology from exposing consumers to risks. For our intermediaries, these technologies play a material role in enabling an enhanced experience across both the customer and intermediary value chain. The shift in the number of products, customer expectations and needs, and the increasing sophistication of the advice process have necessitated a change in the way sales, advice and service are provided to customers. Status of digital protection-related legislation across African countries E-transaction legislation Data protection and privacy legislation Cybercrime legislation Online consumer protection legislation 33 6 6 9 27 9 13 5 39 2 12 1 28 3 8 15 Enacted Draft 0 10 None 20 Insufficient data 30 40 50 60 Source: Findex 2021 (excl. Botswana at 2017) , World Bank, Press, National Insurance Regulators, McKinsey research Non-traditional market entrants and the rise of platform based ecosystems Industry convergence and the democratisation of digital technologies continue to shape the competitive landscape, with fintechs and insurtechs gaining traction in the marketplace over traditional financial service providers. These business models have caught the attention of many traditional insurers and investment firms who seek cross-industry collaboration through partnerships with adjacent industry players such as telecoms, banks, retailers, health care providers and tech companies. Partnerships with alternative industries help traditional players leverage the strengths and capabilities of the partners to drive meaningful growth without spending the time needed to build these capabilities internally. This integration of industry offerings is enabled through platform based ecosystems, which are non-traditional business models delivering value based on shared outcomes. These extend across a range of market participants, spanning competitors, customers and suppliers. Embedded finance is closely linked to ecosystem business models, where financial services are seamlessly integrated into non-financial services offerings and platforms. These ecosystems have introduced a new dynamic in the market, offering a consolidated ‘one-stop shop’ marketplace, which allows access to various products and services. Traditional financial services providers can capitalise on this evolution to benefit from new technologies, obtain access to new markets to grow their customer base and partner with platform owners to be part of their broader ecosystems. Related risks » Growth risk » Strategic execution risk Strategy and business model response » Invest in our adviser experience to digitalise core user journeys » Expand the range of digital sales and servicing channels for customers and advisers » Technology, information and data risk » Explore AI use cases across the internal value chain to enhance the customer and adviser experience Related risks » Growth risk » Strategic execution risk Strategy and business model response » Extend our participation across the financial services value chains » Participate in platform based ecosystems and embedded finance (e.g. SMEgo and NEXT176) 42 Integrated Report 2023 Industry trends continued Talent management Skills shortage and the war for talent In recent years, the global employment landscape has been shaped by two major phenomena: the ‘great resignation+’ that describes record numbers of people leaving their jobs after the COVID-19 pandemic ended and the ‘war for talent’, a complex and increasingly competitive scenario for retaining existing and attracting talented employees. Typically, the talent war is about developing, attracting and retaining the most capable employees. However, in the context of the broader African economic landscape, which is characterised by high levels of unemployment, this trend is more pronounced. In a post COVID-19 world, the scarcity of talent has been accentuated as a result of flexible and remote work policies. Digitalisation and industry convergence continue to place pressure on skills availability and retention in the broader marketplace. Organisations are facing unprecedented levels of volatility from a skills and talent perspective as a result of: » Skills needs that are changing rapidly, making it difficult for talent and learning strategies and budgets to keep up, which makes it difficult for employees to develop skills fast enough to keep up with business demand » Increased competition for scarce skills » Individuals with sought-after skills have tilted the traditional power dynamics between employers and employees, resulting in unprecedented employee demands regarding where people work and working methods Employers need to continuously adapt their responses to ensure that they remain competitive and are able to successfully execute on their strategies. This includes adopting a multi-pronged approach to skills and talent management with an appropriate mix of developing skills internally, sourcing ‘talent on demand’ to fast-track execution in targeted areas and partnering with specialist service providers while building their internal pipelines. Related risks » Growth risk » Strategic execution risk » People risk Strategy and business model response » Re-skill where possible, through internal job rotations and project based work to develop new skills in the existing workforce » Partner with tertiary institutions to develop an early pipeline of the required skills across our businesses » Position Old Mutual as an employer brand of choice » Optimise the hybrid working model » Continue the culture transformation journey which we are adapting to cater for this changing context Climate change The impact of and response to climate change Climate change is a long-term shift in global or regional climate patterns. Africa is severely impacted by associated climate catastrophes at a societal and commercial level. Although Africa contributed only 4% to greenhouse gas emissions worldwide, it is one of the most vulnerable regions to climate change impacts. Floods, storms and droughts have increased from 85 recorded events in the 1970s to over 540 between 2010 and 20191. Since 1970, climate hazards in Africa have: » Caused over 730 000 deaths » Cost the economy $38.5 billion  » Contributed to food insecurity, population displacement and stress on water resources As an African insurer we want to protect populations from risk, particularly the most vulnerable. We aim to accelerate the creation of insurance solutions that support the Just Transition towards a more sustainable and less carbon-intensive economy. Cumulative value in ESG and impact funds2 300 250 200 150 100 50 0 271 187 2 2012 3 2013 $ billion 7 19 24 40 2014 2015 2016 2017 2018 2019 2020 2021 2022 118 90 68 1 Climate change in Africa – statistics & fact: Published by Doris Dokua Sasu, Jan 10, 2024 2 Cumulative final closed size in ESG, climate, Sustainable finance disclosure regulations, and impact buyout or infrastructure funds where funding size has been disclosed Source: https://www.mckinsey.com/capabilities/sustainability/our-insights/climate-investing-continuing-breakout-growth-through-uncertain-times Pitchbook; Mckinsey analysis The call to action by industry players in the business ecosystem, such as rating agencies, policy makers, investors, government and market commentators is growing stronger. As a result, the urgency to formulate a clear climate action strategy and take action is increasingly important. African insurers operate in a unique context with the opportunity to create meaningful climate response policies without deterring economic growth. Our continued focus on climate action has resulted in new business models focusing on green propositions. The rise in demand for green propositions presents a unique opportunity in the African market, as the continent’s rich renewable energy resources present a wealth of largely untapped alternative investment opportunities for the business sector to explore. Companies in the global market who have employed low carbon investment strategies have realised uplift in their bottom line. This proves that driving climate-focused business practices benefits the earth and has the potential to be a revenue driver. Related risks » Climate risk » Organisational resilience risk » Non-life insurance risk » Life Insurance risk Strategy and business model response » Demonstrate industry leadership through climate activism » Develop a clear and cohesive climate action strategy » Integrating ESG factors into our investment portfolios » Actively driving decarbonisation of economies through our responsible investing and stewardship activities 43 Integrated Report 2023 Regulatory changes At Old Mutual, we support all changes to regulatory and reporting standards that promote financial stability or inclusion, encourage uniform market practices and ensure customers are treated fairly. While this could potentially impact the cost of doing business and our non-compliance risk, we mitigate this by strengthening our compliance capabilities and the systems and processes we have in place. Reporting IFRS 17, a new international accounting standard for insurance contracts, replaced IFRS 4. The standard is effective for reporting periods beginning on or after 1 January 2023 and offers a comprehensive and consistent approach to accounting for insurance contracts. While IFRS 17 does not change the underlying fundamentals of our insurance business, our cash generation or our capital strength, it significantly changes how we report on our insurance business. In 2023 we placed substantial focus on the programmes and initiatives across the Group to ensure the standard’s successful implementation. Refer to our IFRS 17 Bridging pack, which sets out the impact on the Group’s key performance indicators from IFRS 4 to IFRS 17 results for June and December 2022 Anti-money laundering The past year has seen substantial developments in emerging regulations relating to anti-money laundering and combating the financing of terrorism in most jurisdictions where we operate. These developments require continuous focused attention from our businesses. South Africa’s grey listing, which was published in February 2023, resulted in additional due diligence requirements placed on our South African business and our clients as well as increased scrutiny from our regulators. We continue to work closely with our international asset and investment managers to meet their requirements. Kenya and Namibia’s evaluation reports were published towards the end of 2022, resulting in an increase in legislation changes and regulatory scrutiny in these two jurisdictions in 2023. The progress these countries made to address the findings raised in their respective evaluations will be assessed by the Financial Action Task Force in February 2024. Retirement fund reform The South African National Treasury’s retirement industry reforms, first released in mid-2022, include a proposed two-pot retirement system to encourage South Africans to preserve their retirement savings. This is expected to have far-reaching effects on South Africans and retirement fund administrators and is anticipated to come into effect on 1 September 2024. The changes aim to boost household savings by increasing preservation before retirement and increasing flexibility through partial access to a percentage of retirement funds pre-retirement under prescribed circumstances. The reform proposes that all future contributions to a retirement fund would be split two thirds to a retirement pot, which is accessible at retirement to acquire an annuity and one third to a ‘savings pot’ which permits the withdrawal of a minimum of R2 000 once per annum with no maximum amount prescribed, subject to normal income tax. These amendments require substantial changes to operational processes and systems. Old Mutual established a formal project in 2023 to implement these changes. Additionally, several conduct-related standards applicable to the business of retirement funds were finalised in the year and the amendments to Regulation 28 of the Pension Funds Act, 24 of 1956 came into effect. Employment Equity Act amendments In South Africa the Employment Equity Amendment Act, 4 of 2022 (Employment Equity Act) was signed into law in April 2023, with the aim of achieving equity outcomes by effecting significant changes to the employment equity landscape. The most significant changes include a change in the definition of designated employer to limit the application of certain sections of the Employment Equity Act to larger employers. This aligns the definition of people with disabilities to the definition in the United Nations Convention on the Rights of Persons with Disabilities. It empowers the Minister of Employment and Labour (the Minister) to identify national economic sectors and set employment equity targets for each of these sectors. On 12 May 2023, the Minister published the draft five-year sectoral numerical targets for the national economic sectors, including the financial sector, for public comment. Considering the importance Old Mutual Group places on equity in the workplace, we commenced our journey to align with and, where possible, exceed the sector targets when the initial iteration of the Amendment Bill was published. We stretched employment equity targets into the Group plan and track these targets through established segment and legal entity employment equity forums. The Group consulted with trade unions regarding the final plan and numbers, and cascaded the targets to the Group’s employment equity forum, which were ultimately included in the Group’s employment equity plan. The Group emphasises women in leadership, fair and responsible pay practices, attracting talent from diverse backgrounds and with diverse experiences, and empowering employees with disabilities to thrive in the workplace. Zimbabwe compensation framework A commission of inquiry established by the Zimbabwean government concluded its investigation into the loss in value for certain policyholders and beneficiaries when insurance and pension values were converted from Zimbabwean dollars to United States dollars after the dollarisation of the economy in 2009. The commission of inquiry in 2015 sought to establish the extent of prejudice to policyholders and pensioners and recommend compensation where prejudice has been established. The Insurance and Pensions Commission is finalising the compensation framework for policyholders and pensioners, which seeks to recognise and ensure that fund members and policyholders with policies affected by loss of value during the investigative period are compensated. While the regulations for the insurance industry must still be finalised, the Pensions and Provident Funds (Compensation for Loss of Pre-2009 Value of Pension Benefits) Regulations, 2023 (SI 162 of 2023) were published in September 2023, and funds had to submit their compensation schemes by 31 December 2023. Old Mutual, as a responsible business, established a formal implementation project to ensure timeous compliance and engagements with our regulators. Namibia Financial Institutions and Markets Act and subordinate legislation The Financial Institutions and Markets Act, 2 of 2021, consolidates and replaces all non-banking financial services legislation in Namibia under the supervision of the Namibia Financial Institutions Supervisory Authority in one consolidated act. Although it was promulgated on 1 October 2021, the expected effective date is towards the end of 2024. It introduces substantial new requirements in the non-banking financial services sector in Namibia. 44 Integrated Report 2023 Regulatory changes continued As part of this process, supporting standards and regulations are being developed and Old Mutual is actively participating in industry engagement in this regard. We completed substantial work in the business to ensure that business operations and strategy are aligned to these developments. Climate change As a responsible business in Africa, Old Mutual is committed to playing an active part in the climate change journey, considering our corporate emissions, our commitment to responsible investing and the initiatives we support in our communities to drive change and reduce carbon emissions. Our climate change strategy is embedded in our day-to-day business processes and we are working to understand the impact of climate change on our non-life business. We also actively participate in the development of climate change regulatory frameworks in the regions where we operate. In South Africa the Climate Change Bill was passed by National Assembly in October 2023 and we are committed to implementing this in our business. The Prudential Authority is developing guidance for South African insurers on climate change disclosures and we participate in industry forums and engage with our regulator on this. Tax legislation changes Below we highlight the material changes to tax legislation in the regions in which we operate. South Africa » Tax laws were amended to facilitate the implementation of the new IFRS 17 accounting standards for long and short-term insurers. These new rules also provide for six and three-year transitional adjustments for long and short-term insurers, respectively, to phase in the day one impact of adopting the new accounting standard » The interest limitation rules which limit excessive interest deductions on debts owed to persons not subject to tax in South Africa were extended and, consequently, indirect loans to entities not subject to tax in South Africa, and where entities are subject to a reduced withholding tax rate in terms of a double tax agreement a portion of the loan would be deemed not to be subject to tax in South Africa » A limitation has been imposed with effect from 1 January 2023 on the use of the benefit of assessed losses, capped at an amount equal to 80% of taxable income earned in a particular tax year before the set-off of the assessed loss carried forward. As a consequence, affected companies will be taxed on a minimum of 20% of taxable income earned in a particular tax year, despite the existence of larger assessed losses Southern Africa » In Zimbabwe, the VAT rate was revised from 14.5% to 15% effective 1 January 2023 East Africa » In Kenya, exported services are now zero rated (previously subject to VAT of 16%). The 20% excise duty on fees charged for money transfer services was reduced to 15% → A new exemption to the interest deduction restriction was introduced on loans between Kenya tax residents. Furthermore, restricted interest and realised foreign exchange losses are deferred for three and five years, respectively » In South Sudan, a sales tax of 18% has been introduced on commissions and other fees charged for financial services West Africa » In Ghana: → A minimum tax of 5% of turnover was introduced, where a taxpayer has losses for the previous five years. The period for carrying forward losses for all taxpayers is five years → A new limitation on the deduction of foreign exchange losses in respect of debt claims, debt obligations or foreign currency holdings was introduced, which applies to transactions with residents and non-residents Related risks » Growth risk » Strategic execution risk » Operational resilience risk Strategy and business model response » We are actively participating in industry, the Financial Sector Conduct Authority and National Treasury working groups and forums » The Chairman, Board and Audit committee met with the Prudential Authority in South Africa on separate occasions during the year to discuss, among other things; climate change and the related risks and organisational resilience as the focuses for 2023. The Boards of our subsidiaries also engaged with regulators in their regions regularly » We monitor the plans the Zimbabwe treasury has for the compensation for loss of value to pension funds 45 Integrated Report 2023 RISKS AND OPPORTUNITIES In this section Our approach to risks and opportunities Risk management Top risks 47 49 51 46 Integrated Report 2023 Our approach to risks and opportunities An effective risk management system supports the business’ sustainability and growth and our ability to create long-term value for all our stakeholders. Our risk management process is designed to continuously monitor the internal and external environment to identify any conditions or changes that may require us to mitigate the related risks and capitalise on opportunities. This ensures we remain within our risk appetite, achieve our business plans and realise our strategic objectives. Risk governance The Board is aware of the importance of risk management as it is linked to the strategy, performance and sustainability of the Group. It sets the risk appetite and tolerance levels annually as part of its review of the Group risk strategy. The Board, through the Risk committee, oversees the Group’s risk management activities. The Risk committee is responsible for approving the risk strategy and risk policy suite, as well as providing oversight of the risk management system and risk-taking activities across the Group. Board focus: Risk governance The Board is responsible for ensuring that the Group and our subsidiaries monitor and manage risks with effective risk management and internal control systems in place. During the year the Board: » Reviewed and monitored the stability and security of the technology strategy, information security and operational processes to enable business success and continuity » Monitored retail credit, life and general insurance risks to ensure that they are optimally managed » Continued monitoring the impacts and actions required to proactively address climate and environmental, social and governance risks » Oversaw the Group’s response to the complex macroeconomic landscape Refer to the Corporate Governance Report for information on the Risk committee’s activities and focus areas Risk management Risk classification model The risk classification model forms the basis for risk management across the Group. A uniform risk classification model allows for the analysis, aggregation and reporting of risks in a structured manner across the Group. It forms the basis for risk identification and focuses on including risks based on their inherent risk assessment and ensures that all key risks and the related control environment are assessed, monitored and reported on regularly. A causal model ensures that the key causes of risks are considered to enhance the control environment. Considering the size and complexity of our organisation and stakeholders, risks must be considered on a financial and non-financial basis. The risk strategy, appetite and policies are fully aligned to the risk classification model. The risk classification model comprises 12 level 1 categories that are then expanded into level 2 categories and, where necessary, level 3 categories. The risk classification model, causal categories and the financial and non-financial impacts, are presented in a ‘bowtie’ format for easy reference. CAUSES People Process System INSURANCE STRATEGIC GROWTH EXTERNAL IMPACTS Financial LIQUIDITY MARKET Our risk universe LEGAL AND REGULATORY Reputational MARKET CONDUCT External CREDIT AND COUNTERPARTY OPERATIONAL Internal INFORMATION TECHNOLOGY PEOPLE Licence to operate Business resilience and sustainability 47 Integrated Report 2023 Our approach to risks and opportunities continued Our approach to risk Our approach to risk and strategy are aligned to our vision of becoming our customers’ first choice to help them grow, sustain and protect their prosperity. As part of our strategy, we establish our risk appetite, which determines how much of a certain risk we are prepared to take on. Together with the Group Financial Management Framework, our risk strategy informs the overall business strategy, thereby integrating our business operations, strategy and risk appetite to facilitate a disciplined and balanced approach to risk based strategic decision making and active control over risks to which our earnings and capital are exposed. The Group Financial Management Framework defines how the Group allocates and manages capital and liquidity, including performance hurdles and growth targets to enhance shareholder value. Our escalation mechanisms account for risk events and breaches in risk limits or targets. A forward-looking business plan and scenario and stress testing enable us to assess the robustness of our balance sheet. When assessing the risks in our strategy, we follow a top-down approach. It guides risk-taking activities and ensures that we sustainably deliver on our strategic objectives. The guiding risk principles that underpin our risk strategy and the nexus to the Group strategy is as follows: Risk principles Strategic focus areas Our approach to risk » We protect our reputation by maintaining trust with all our stakeholders » We focus on risks that align with our business strategy, areas of competitive advantage and evolving skills » We use risk mitigation techniques to manage risk exposures » We recognise the value of diversification and the challenges of risk inter- connectedness to avoid excessive risk concentration and ensure sustainability » We optimise returns on a risk-adjusted basis » Our tolerance for uncertainty is informed by our businesses’ maturity and growth aspirations Growing and protecting the core Holistic coverage of customer needs: » Provide product solutions that meet our customers’ needs and with the addition of banking solutions » Cater to our customers at any stage of their life and financial journey, educate them on finances, provide them with financial advice to make the right financial decisions and reward them when they do so Distribution and digital engagement: » Ensure that we are accessible to our customers when they need us, through the channel of their choice » Improve ease of doing business by digitally enabling our strong adviser force, so they can focus on what matters most – serving our customers » Continue to invest in MyOldMutual ecosystem to drive rich, regular and personalised engagements with our direct customers Operational efficiencies: » Reduce costs and leverage efficiencies through advances in technology » Drive greater economies of scale powered by low-cost, scalable cloud ready infrastructure » Provide a consistent, always-on customer digital experience » Improve the pace of deploying new systems and solutions to the market » Improve operating margins and enhancing competitiveness Unlocking new growth engines Strategic growth markets: » Continue to focus on business ventures and strategic partnerships in Old Mutual Africa Regions » Grow customer volumes and optimise channels in China » Build on strong existing capabilities and the trust people have in the brand Strategic growth businesses: » Through NEXT176, focus on new digital-led businesses, providing seed capital to new ecosystem based ventures and developing mutually beneficial strategic relationships with other large businesses » Launch our bank to complete our holistic integrated financial services offering and enhance our ability to have regular, organic, business- driven interactions with customers, which have a beneficial impact across various lines of business » We have zero appetite for systematic, unfair or irresponsible business practices that may affect our customers, their families and the communities in which they live » Accordingly, we take care to treat all our stakeholders fairly. ensuring we create shared value by contributing towards positive economic, environmental and social outcomes. As a responsible asset owner and manager, our responsible investment practices incorporate ESG-related considerations into investment decisions » Treating our customers fairly and offering them sound advice and value-for-money, affordable solutions that meet their needs. are key to the strategy and meeting our strategic objectives » Developing market-leading solutions requires appropriate investment in people, technology, information security and robust execution of the business strategy through our chosen business models » Continuously improving our solutions and launching innovative and refreshed propositions will enable us to respond promptly to the key shifts in customer demand, including customised solutions and the best advice delivered through a seamless experience » Diversification is key to avoiding excessive risk concentration in integrated financial services, thereby ensuring that the sustainability of the business is not undermined by adversity in one area » Our new growth engines play a key role in enhancing our core propositions, and create greater diversification across risk types, products, geographies, target markets and distribution channels » The growth of these solutions remains subject to meeting financial targets, pricing responsibly for risks taken on and investing in the necessary capabilities to manage these risks effectively, especially in our African businesses » We have a high preference for innovation to ensure our customers and advisers experience market-leading solutions. Thus, we recognise that we need to execute our plans effectively with an appropriate risk management focus Our risk process Determining our risk preference for each risk category Our risk strategy documents our risk preferences for key risk types in our risk classification model. Quantifying the risk appetite metrics for financial soundness, earnings at risk and liquidity Risk appetite is the level of risk exposure we are willing to accept to meet our strategic objectives. Our financial resources and risk appetite determine the nature and level of growth that can be targeted, as they reflect the impact of assumed risk on capital requirements and earnings volatility. We use stress and scenario testing to evaluate the earnings and balance sheet resilience in relation to our business plans and risk-taking activities. Creating target ranges for our earnings at risk and statutory capital requirements Our risk appetite metrics measure capital requirements, earnings and liquidity risks and ensure compliance with the Prudential Financial Soundness Standards. These are calibrated to allow us to manage an extreme downside scenario with sufficient resources to avoid regulatory intervention. Allocating capital Under the Group Financial Management Framework, we allocate capital and funding to segments within our risk appetite parameters. This process facilitates a disciplined and balanced approach to strategic risk based decision making, opportunity assessment and resource allocation, which are expected to maximise value for investors in the long term. Updating our risk approach We review our risk approach annually and the Board approves any changes. We did not add any new risk appetite statements in 2023. 48 Integrated Report 2023 Risk management Risk culture Risk culture is the foundation for effective risk management and supports risk based decision making. Our leaders set the tone at the top, consistently and deliberately championing risk management, role modelling appropriate risk behaviours to instil the desired culture and fostering open communication where people feel safe to speak up without fear of retribution. This demonstrates our willingness to proactively consider diverse viewpoints and find and receive constructive challenges. There is effective risk oversight in our business, with roles and responsibilities being clearly understood, embraced and discharged across the three lines of assurance. This ensures business and strategic decisions align with our risk appetite and transparency internally and externally, considering the risks that impact our business the most. The level of skills, learning and data across the three lines of assurance support effective risk management practices and behaviours. Our risk architecture and management systems are formalised in structures and arrangements that include the risk approach, methodology, tools, governance and processes, and we ensure these are adopted across the organisation. In 2023 we included risk culture questions in our annual Pulse Culture Survey for the first time. Previously we performed top-down assessments of risk culture with business unit Executive committees. This provided the first comprehensive bottom-up view of our risk culture. The results showed a similar assessment of the risk culture across the Group and most geographies, with a score of 4.86 out of 6. This assessment will be repeated every two years. The risk culture scores were debriefed with the key business units and we identified actions for improvements. At an Old Mutual Limited level, we will focus on risk awareness while working with the other assurance providers to support management in continuing to improve the control environment. Risk policies Our comprehensive suite of risk policies is aligned to the risk classification model. They provide the minimum mandatory requirements of how risks should be managed and controlled. The risk policies are subject to annual review and the Board approves any changes. Key business units annually attest to their level of compliance with the policies and actions are put in place for any identified gaps. Risk management process The Group Financial Management Framework brings together capital and liquidity management principles with the business planning process, to maximise shareholder value in the context of the Group’s risk strategy and resultant risk appetite. In doing so, the Group aims to balance competing stakeholder interests, including: » Shareholders, who expect earnings growth, revenue growth, operating margin, cash generation, dividend growth and return on capital » Regulators, debt holders and policyholders, who expect strong solvency and liquidity R I S K M A N AGEMENT PROC RISK I D E N T IFICATION E S S D RISK ENT M N N S A IG L A Y G E T A R T S S E N I S U B A P R P I S E K T I T E S C S E T N R A E R S I O T N S A ESTING D G ROWTH T A RGETS M A N A L CIA N A FIN STRATEGY AND BUSINESS PLANNING G E M E N T FRAMEWORK E P E C N A S E M L R F OR D H U R N IT P E O R I S K M O A N D R R I S A K N M D E R A E S S U P O N S E R E M E N T O RING R TIN G For details of the Risk committee’s focus areas and how it addressed risks, refer to our Corporate Governance Report Business and risk strategy alignment ensures that the risks assumed in our business plans reflect our risk preferences, considering the interconnectedness of risks and points of leverage within our risk mitigation activities. Risk identification is focused on identifying obstacles that could prevent us from achieving our business strategy and objectives. We categorise our risks using our risk classification model to ensure consistency and enable the aggregation of similar risks across the Group to understand their full impact. Risk measurement and response focuses on quantifying risks by considering the likelihood and impact of the risk and deciding on mitigating actions. Risks are quantified in three dimensions: » Inherent: considering the likelihood of occurrence and impact (financial and non-financial) that the risk may have on the business, without considering any mitigating factors » Residual: considering the likelihood of occurrence and impact the risk may have on the business, after considering the control environment and any mitigating actions » Residual risk vs tolerance: comparing the residual risk to the risk appetite and preferences as detailed in the risk approach per risk type Once quantified, we consider the risk rating and our appetite for that risk to determine a risk response and implement mitigating actions as appropriate. Risk monitoring is the ongoing process of assessing the control environment and the effectiveness of mitigating actions taken to determine a residual risk rating. It considers the impacts of materialised risks, assurance work, indicators and changes in the external and internal environment on both our risks and controls. Risk reporting focuses on comparing the residual risk exposures to our risk appetite, as articulated in our risk strategy, reporting on risks that are either outside of the targeted range or outside of our risk appetite. Stress and scenario testing is the process of evaluating the impact of specified scenarios on our financial position using several statistically defined probabilities. This facilitates the assessment of the resilience of earnings and our balance sheet based on our business plans and the various risk-taking activities. 49 Integrated Report 2023 Risk management continued Our three lines of assurance As a Group, we follow a three lines of assurance model, which defines clear accountabilities for managing risk and the control environment. Line 1 – Management Line 2 – Internal control functions Line 3 – independent assurance providers Management is responsible for risk identification, implementing an effective system of internal controls, and daily risk management across the business. This line also includes specialist and Group functions such as finance, balance sheet management, actuarial, tax, legal, information security and quality assurance functions. Internal control functions oversee the appropriateness and effectiveness of the risk management system, ensuring that policies and procedures are followed, and that reporting is accurate and complete. This line includes the risk, compliance, actuarial oversight and forensics functions. Independent assurance providers are responsible for opining the effectiveness of governance, lines one and two functions and the system of internal controls. This line includes internal and external audit functions. Combined assurance Our combined assurance processes are well established. Our philosophy is to sustain an integrated and coordinated approach across all three lines of assurance. Our key focus is on collaboration and sharing information while ensuring appropriate coverage and avoiding duplicate work. The Board-approved combined assurance plans provide an integrated view of all assurance activities related to the Group’s key inherent risks. We identify focus areas for a specific year by identifying the key internal and external risks that could impact the delivery of our strategy, as well as considering of our current control environment and assurance work in prior years. Quarterly reporting against the plans provides an integrated view of the outcome of all assurance activities, resulting in an improved understanding of the effectiveness of internal controls. The risk function is responsible for maintaining the Group Combined Assurance Framework. Independent assurance of the Group Combined Assurance Framework and process is provided on a periodic basis. Emerging risks Emerging risks are new or familiar risks that become apparent in new or unfamiliar conditions. They evolve in areas and ways with inadequate available information, making them difficult to quantify. An emerging risk transitions into a principal risk when there is a sufficient understanding of its nature and impact. Once this is determined, we develop actions to mitigate the risk. We identify emerging risks through external environment scans and assess them as far as possible according to their impacts on the business, the timeline over which the risk is expected to occur, and the velocity of the risk. We identified the following emerging risks as part of the 2024 to 2026 annual strategy and business planning exercise and they are aligned to the material matters. For details on our material matters, refer to page 39 Cyber security and data privacy Climate change and natural disasters Technology disruption Regulatory changes Economic volatility Demographic shifts Political and social stability Pandemic and health crisis Talent management Changing customer expectations We report on emerging risks to the Board Risk committee regularly and the emerging risk report forms part of the input into the annual strategy and business planning cycle. During 2023 we did not identify any new emerging risk themes or risks. However, previously identified emerging risks could change due to their connection with other risks. 50 Integrated Report 2023 Top risks We identify our risks by considering to different factors, which include: » Residual risks recorded as part of our risk and control self-assessment process » Events that have materialised into risks, which were analysed to understand the impacts on our risk process and control environment » Emerging risks in preparation for risk response and mitigation with a longer time horizon » Interconnected Group risks to identify possible concentration and contagion risks Top residual risks Changes to the top residual risks Top risks are identified based on their likelihood of materialising in a reasonably short timeframe, with a magnitude that materially impacts the Group. Our top risks are assessed and reviewed at least quarterly. Based on these assessments in 2023, we included credit risk in our top risks, reflecting the impact of the sustained muted macroeconomic environment on retail and investment credit. Market conduct risk dropped off the top risks. Business resilience risk was updated to organisational resilience risk, broadening the scope of the risk to include the regulatory agenda as a key theme during 2023. The impact and likelihood of our top risks t n a c fi n g S i i T C A P M I j r o a M e t a r e d o M r o n M i t n a c fi n g i s n i I Sovereign risk Growth risk Strategic execution risk Technology, information security and data risk Organisational resilience risk Climate risk Life Insurance risk Credit risk Non-life insurance risk People risk Rare Unlikely Possible Likely Almost certain The outlook of the risk expresses the expected outlook of the risk for the next year considering all available information at the time the report is released. indicates a deteriorating outlook indicates a neutral outlook indicates an improving outlook Refer to our operating context on pages 38 to 45 to understand the factors that influence our risk assessment and management process LIKELIHOOD 51 Integrated Report 2023 Top risks continued Growth risk 2022 vs 2023 Unchanged Outlook Stakeholders The risk of being unable to achieve and maintain profitable growth and be a dominant player in our chosen markets Adverse economic conditions increase cost-of-living, decrease retail customers’ disposable income and reduce corporate customers’ growth and liquidity levels. Non-traditional businesses and fintechs continue to enter financial services and compete aggressively. Impact » Recovery of personal finance market share of recurring premium underwritten risk sales remains under pressure despite improving trend » Pipelines for asset flows and/or regular contributions take longer to materialise into flows for our Old Mutual Corporate and Asset Management businesses » Persistency in our low-income segment in South Africa has deteriorated due to a sustained muted macroeconomic environment » Persistency of general insurance business in South Africa is also under pressure, particularly in iWYZE Key actions » Deliver strategic programmes which advance the integrated financial services strategy » Focus on driving quality sales in retail segments. Introduced new products and capabilities, while realising synergies through our newly acquired businesses, and services with increased flexibility for customers and rewards benefits » Scale digital distribution channels to drive direct business » Grow our alternative distribution channels, especially the franchise business and the foundation market in Mass and Foundation Cluster Opportunities » Embedding the capability to respond to opportunities created by rapidly changing market dynamics and deliver game- changing innovation in Next176 to support sustainable, long-term growth » Diversifying product offerings through new acquisitions and partnerships » Prioritise data analytics to drive customer insights and improve customer experience – this will promote customer » Exploring inorganic growth opportunities acquisition and create cross-selling and upselling opportunities to drive growth » Pursue new growth engines in the form of our transactional capability and leveraged off partnerships in strategic growth markets » Continue to focus on growing the corporate business across Old Mutual Africa Regions » Improve adviser retention and productivity through digital enablement and focused on the ease of doing business for our advisers in South Africa » Drive retention strategies across our life and non-life businesses, including a significant focus on innovation and addressing market consolidation in key African regions » Driving operational efficiencies to reduce expense base » Cost-to-income ratios come under pressure in the premium collection processes as persistency challenges reduce the book size that supports the fixed cost base » Focus on driving operational efficiencies to improve cost-to-income ratios across our businesses Related material matters Strategic focus areas Capitals FC HC MC Strategic execution risk 2022 vs 2023 Unchanged Outlook Stakeholders The risk of failing to effectively deliver on our material programmes in a timely manner to achieve our strategic objectives There are several key change initiatives underway that will set us up as an organisation to achieve our strategy and business plan objectives. Impact » Delays in progressing change initiatives could result in additional running costs, opportunities not being fully capitalised on and benefits not being timeously realised » Overlapping dependencies on key resources may lead Key actions » Embed agile programme delivery methods across the value chain » Enhance testing capability to improve delivery cadence and reduce defects for change initiative » Continue prioritisation of projects through the Old Mutual Strategic Investment Portfolio committee to alleviate constrained capacity Opportunities » Driving strategic clarity based on delivering an integrated financial services experience for customers » Maturing our capability to drive innovation to slippage and compression » Focus on prioritising project outcomes by value generated and benefit realisation through an improved and partnerships to support growth » Sustained pressure on key individuals could impact staff gating process wellbeing and retention Related material matters » Implement people retention strategies for critical resources in key programmes Strategic focus areas Capitals FC HC MC SC IC 52 Integrated Report 2023 Top risks continued Climate risk 2022 vs 2023 Unchanged Outlook Stakeholders The risk that global warming, extreme weather events and the transition to a low carbon economy will adversely impact economic growth, asset valuations and insurance profitability. In combination with increased costs of doing business, these could threaten the resilience and sustainability of our business Increased frequency and intensity of severe weather events can cause business disruption and adversely impact claims experience and pricing of insurance products, particularly in the Property and Casualty business in the short term. Policy shifts could lead to stranded assets and job losses from highly exposed industries, including fossil fuel investments. Impact » Property and Casualty claims are increasing due to the rise in frequency Key actions » Understand Old Mutual’s fossil fuel investment exposure and influence action in investee and intensity of extreme weather events » Increased concentration risk by geography or sector due to physical climate risks or dependency on primary industries » Severe weather events causing business disruption » Reduced capacity in reinsurance markets to transfer risk from our own balance sheet » Increased price for securing reinsurance, which may have a knock-on effect on product pricing » Stranded assets triggering asset devaluations in highly exposed industries, including fossil fuel investments » The possibility of deterioration in mortality and morbidity due to illness and food and water insecurity induced by extreme weather events companies on climate risk issues and developing a path to decarbonisation of our investment portfolios » As a responsible business, we are working to ensure that we minimise the carbon footprint of our own operations » Assess the impact of climate-related risks and opportunities on our businesses, strategy and financial outcomes, and developing response plans » Continue to develop our ability to locate and calculate extreme weather events to understand climate exposures in our non-life portfolio » Review policy terms and conditions in conjunction with pricing to ensure these accurately reflect the risk exposures, particularly in relation to property, motor and crop insurance » Expand our exposure to investment projects which develop clean or green power solutions » Scenario planning to develop strategic options, particularly for OMLACSA and broadly for Old Mutual Limited to navigate the volatility of the transition to build financial and operational resilience Opportunities » Exploring ways to develop market- leading products that will protect our customers against climate risk » Managing our own carbon footprint as a business by improving our energy management and waste recycling processes and creating alternative water supplies for our buildings » Investing in the renewable energy sector in South Africa and Africa Related material matters Strategic focus areas Capitals FC SC NC 53 Integrated Report 2023 Top risks continued Sovereign risk 2022 vs 2023 Unchanged Outlook Stakeholders The risk that governments face challenges in stabilising and servicing the debt they have issued We are directly exposed to sovereign risk through holdings of government bonds and state owned enterprise investments and indirectly via local banks through bank deposits and hedging strategies. We invest in long-dated sovereign and state owned enterprise debt instruments in our shareholder funds, as well as to match the long-term nature of the liabilities to hedge guaranteed products. Although default risk is low, a restructure of sovereign debt is possible if the fiscal position worsens over the long term. Impact » A sovereign crisis could reduce our customers’ investment returns and trigger value-for-money concerns in some portfolios » Higher interest rates that are normally accompanied with sovereign distress could also affect the affordability of insurance products due to pressure on our customers’ disposable incomes » Depending on the severity of investment valuation losses on sovereign debt holdings, our capital and liquidity levels may be impacted, limiting our ability to invest in growth opportunities » In some of our Old Mutual Regions businesses, a substantial portion of shareholder and policyholder funds are invested in sovereign debt or the local banking sector, which poses solvency and liquidity risk should there be a sovereign default or debt restructure Key actions » Introduce portfolio sectoral and durational tilts into our investment portfolios to manage and Opportunities » Identifying investment and lending diversify portfolio risk » Diversify local bank exposure and increasing our exposure to offshore banks and other international counterparties » Rightsize our exposure to state owned entities » Tailor product range and investment strategies to mitigate this risk » Engage with industry groups on how to respond to the systemic risk posed by a sovereign debt opportunities in sectors which show growth potential, resilience or are counter-cyclical » Identifying renewable energy and infrastructure development investment opportunities that would assist economic growth and improve the fiscal position crisis » Develop a sovereign risk dashboard with forward-looking risk indicators to monitor the extent of sovereign risk exposure and enable proactive management decisions » Reduce exposure in long-dated government paper in Old Mutual Africa Regions entities with elevated sovereign risk » Embed the investment credit risk framework in our African regions » Set appropriate credit risk appetite limits and early warning triggers to ensure actions can be taken timeously to correct unexpected performance deviations for institutional credit portfolios Related material matter Strategic focus areas Capital FC 54 Integrated Report 2023 Top risks continued Technology, information and data risk 2022 vs 2023 Unchanged Outlook Stakeholders The risk that legacy information technology infrastructure poses to our ability to fully deliver the integrated financial services strategy and achieve consistent customer and adviser experience across systems and platforms. Failure to simplify the estate will negatively impact our ability to realise operating efficiencies and reduce the capacity for investment Data is key for our business to achieve its operational and strategic goals. We rely on data that is accurate, complete, and integrated to enable our integrated financial services ambitions. The evolving global threat landscape may result in Old Mutual being prone to intentional and unintentional cyber security attacks. As we evolve our business model, it is critical that we understand the risks introduced by third parties. Impact » System downtime may disrupt servicing and sales processes » Inability to meet our customer and adviser expectations, ultimately impacting our growth ambitions » Failure to achieve process efficiencies and, therefore, operational costs exceed planned expenditure » Potential loss of data or intellectual property » Possible disruption of services due to temporary failure of critical third parties, such as suppliers experiencing a cyber incident » The lack of accurate, complete and integrated data may hinder our ability to make strategic risk based business decisions and drive the execution of our integrated financial services strategy » A poor data analytics capability could also result in missed opportunities to further enhance offerings to our customers and advisers Key actions » Adopt a cohesive, Group-wide approach to information technology architecture, business resilience Opportunities » Utilising emerging technologies such and information security » Ongoing modernisation and simplification of the application landscape, including completing and optimising our cloud migration » Digitalise our processes and improving adoption of the digital platforms so that we meet the demands of our customers, advisers and employees » Continue improving of our third-party risk management capabilities » Continue to enhance our information technology security strategy, monitoring and staff awareness to ensure we respond to current and new threats, protect intellectual property, sensitive customer information and other business-critical information » Complete the modernisation of legacy data architecture and platforms to ensure we have the right foundation for our integrated financial services strategy » Improve data completeness and quality to ensure we are able to leverage generative AI and other emerging technologies that improve our services for customers and advisers » Develop a data loss prevention strategy to protect Old Mutual and our customers’ information from data breaches that pose a risk to our people, tools, infrastructure and business as generative AI to improve the customer and adviser experience » Driving digital adoption so that more customers and advisers can easily access services » Leveraging our cloud adoption to improve operational efficiencies » Simplifying and modernising of the information technology estate to unlock efficiencies Related material matters Strategic focus areas Capitals FC HC MC Life insurance risk The risk that actual mortality and morbidity is worse than what we expected 2022 vs 2023 Lower Outlook Stakeholders Our Life and Savings business provides insurance cover for a wide range of contingencies to our customers. The mortality and morbidity risk associated with providing this cover is aligned with our business strategy of offering protection products. Impact » Mortality and morbidity losses reduce earnings where experience Key actions » Undertake experience investigations in areas of concern and is worse than expected reviewing pricing Opportunities » Refining the granularity of our rating categories for pricing purposes » Tilting business mix towards underwritten products in the » Where losses are expected to continue for the foreseeable future, » Continue to monitor the impact of pandemics on the middle-income market they are capitalised in that year for the expected future losses by way of a basis change, which multiplies the effect of a single-year loss underwriting experience » Investigate the climate change risk and its impact on mortality Related material matters and morbidity Strategic focus area » Capturing cross-selling opportunities to increase customer needs met by writing disability, critical illness and other benefits in addition to death cover Capitals FC HC 55 Integrated Report 2023 Top risks continued Organisational resilience risk 2022 vs 2023 Higher Outlook Stakeholders The risk of the organisation not being able to withstand operational risk-related events that could cause significant operational failures or wide-scale disruptions to servicing and/or financial markets, such as pandemics, cyber incidents, technology failures, power grid failures or natural disasters Scenario planning assists us in assessing where we need to strengthen resilience to ensure smooth operations and a consistent customer experience despite challenges affecting operations. Impact » Operational systems, people and/or processes Key actions » Consistently implement existing risk management frameworks, business continuity plans and third-party are impacted depending on the cause, size and timing of the disruption, with possible reputational impacts » Human error in manual processes could result in financial losses to the organisation, as well as reputational impact » Third-party risk events may have a detrimental effect on servicing and/or information security » Extended load shedding at higher stages may have operational impacts on servicing dependency management across Old Mutual Limited » Align operational resilience approach with identified critical functions and shared services and appropriate governances » Continue to improve our identification and management of operational risks » Strengthen our business continuity planning and the regularity of testing them, including scenario planning and simulations » Ensure we have complete and valid maps of our critical processes, including interconnections and interdependencies » Continue to strengthen our third-party risk management capability and processes » Strengthen our incident management capabilities and processes » Continue elevating our current information security and cyber capabilities » Accommodate employees in the office as part of our hybrid working arrangements during higher stages of load shedding to ensure uninterrupted service levels as far as possible » Improve our power resilience at our main campuses and branches to maximise operating hours during extended load shedding or a possible grid failure » Continue engaging with our established Crisis committee, which is invoked if there is a major business resilience event Related material matters Strategic focus areas Opportunities » Improving our overall resilience will allow us to service our customers and advisers during a potential crisis » Having a best-in-practice approach to resilience to allow for easier regulatory compliance » Proactively identifying and addressing operational risks can result in eliminating or minimising the impact of disruptions » Improving resilience also allows for improved cost efficiencies, competitive advantage Capitals FC HC MC NC IC Credit risk 2022 vs 2023 New Outlook Stakeholders The risk of higher-than-expected default rates in our retail and investment credit portfolios due to the macroeconomic environment. The low growth environment affects the demand for corporate credit, which depresses credit margins for lenders It is also challenging to maintain margins within the retail credit book given strong competition for decreasing the pool of better quality borrowers. Impact » Higher default rates impact retail credit losses and have the potential to substantially reduce profitability through increased provisions and write-offs » The inability to take on new retail credit at historic margins could reduce return on capital in our lending businesses » Defaults on debt instruments backing guaranteed liabilities reduces excess capital » Re-scheduling payments on debt instruments backing liabilities may impact liquidity » Defaults on debt instruments backing with profit funds and linked investments reduce the investment return Key actions » Diversify the credit portfolio across different sectors, maturities and counterparties » Set appropriate credit risk appetite limits and early warning triggers to ensure that actions can be taken timeously to correct unexpected performance deviations » Strong oversight and governance of credit making processes » Continuously monitor and revise of credit granting processes and mechanisms » Strict oversight of credit models and changes made to them » Rollout and embed of the investment credit risk framework in Old Mutual Africa Regions » Rightsize our exposure to state owned entities » Enhance portfolio monitoring, particularly for sectors most at risk » Enhance and optimise collections capabilities and strategies in our retail lending entities Opportunities » Identifying investment and lending opportunities in sectors with growth potential, resilience or are counter-cyclical » Identifying renewable energy and infrastructure development investment opportunities that could assist economic growth and diversify investment credit instruments » Enhancing test and learn capabilities to improve the predictive capabilities of retail credit models » Further enhancing automation and data analytic capabilities across retail credit portfolios Related material matters Strategic focus areas Capitals FC IC 56 Integrated Report 2023   Top risks continued People risk 2022 vs 2023 Unchanged Outlook Stakeholder This risk arises from not attracting, developing and retaining the skills necessary to implement our strategic objectives, and from insufficient action to reduce the risk of burnout among key employees Specialist skills are required to deliver our strategic objectives, and compelling remote working opportunities mean we are competing to retain and attract talent on a global scale. Impact » Talent retention for certain skills which are in high demand Key actions » Revise remuneration value propositions in line with local environments where globally and locally due to remote working opportunities where salaries are paid in hard currencies, which is particularly prevalent across the Old Mutual Africa Regions businesses where talent outflows are driven by local, American and European employers » Increasing work demands on a small pool of subject matter experts created by a few key strategic business programmes continues to create overall employee wellbeing risk » Deterioration in employee wellness could impact delivery and service, including the execution of large programmes critical to our strategy we operate » Continue to position Old Mutual as an attractive employer of choice in the external market » Institute a mandatory two days in the office as part of hybrid approach to work, supporting the need for flexibility and accommodation of critical and scarce skills and roles » Implement an overarching wellbeing strategy which is cascaded into businesses. This is supported by bespoke wellness initiatives and plans within those businesses and a Group-wide employee assistance programme » Manage staff burnout risk by filling vacancies, effective prioritisation and capacity planning Related material matter Strategic focus areas Opportunities » Leveraging wider recruitment pools due to hybrid working for specialist skills » Offering retention bonuses for key talent delivering strategic initiatives » Implementing non-financial retention strategies at a Group and business unit level Capitals HC FC Non-life insurance risk 2022 vs 2023 Higher Outlook Stakeholders The risk of adverse impacts on our ability to write profitable Property and Casualty business The underwriting experience across our Property and Casualty businesses is susceptible to pricing of replacement parts and adverse weather conditions, as well as higher cancellations due to affordability concerns of customers. The reinsurance market has become increasingly difficult over the past few years, resulting in less capacity and higher premiums to transfer risk to a third party. Impact » Increased claims due to the increased frequency and severity of weather Key actions » Evaluate different reinsurance options across our entities that offer Property Opportunities » Leveraging insights derived from the Climate catastrophes and Casualty products Change Task Force » Deterioration in the earnings of the Property and Casualty businesses due » Continue to review policy wording in South Africa to ensure we manage » Partnering with other insurers, municipalities and to underwriting losses and higher cancellations due to affordability concerns » Slow growth in the book size of our Property and Casualty businesses across Africa escalating exposures to risks such as power surges, etc. » Launch a retail top-up product to ensure indemnity level is maintained » Deliver process efficiencies and reduction in claims management costs, third parties on climate change » Exploring opportunities to develop new products » Exploring partnerships with SMMEs linked to the » Increased retention of risk on the balance sheet of Property and Casualty particularly on motor books insurance industry businesses due to the hardening reinsurance market and possible contraction in underwriting margins » Inflation and currency depreciation increasing the cost of claims Related material matters Strategic focus area Capitals FC MC NC 57 Integrated Report 2023 PERFORMANCE AGAINST STRATEGY In this section Growing and protecting the core Unlocking new growth engines Agile delivery driven by engaged employees Rewarding strategic performance 59 64 68 71 58 Integrated Report 2023 Growing and protecting the core At the core, we start from a position of strength. We have large businesses with leading market positions in Mass and Foundation Cluster, Personal Finance and Wealth Management, Old Mutual Corporate, Old Mutual Insure, Old Mutual Investments and across most of the Southern African Development Community. Holistic coverage of customer needs What we aim for » To offer a high-quality, holistic financial services offering anchored in financial wellness » Customers are able to meet all their primary financial services needs with us, at any stage of their life and financial journey » Customers benefit from having multiple products with us, are rewarded for doing so, and get a seamless, engaging experience throughout their journey How we deliver this Our holistic solutions span life and savings, investments, property and casualty and lending and banking. Each solution offers various products to meet our customers’ needs. Our solutions are flexible and can be tailored to customers’ changing circumstances and needs. Beyond the products we offer, we support customers to attain financial wellness by providing financial advice and education. Customers are rewarded for choosing Old Mutual as their partner and for progressing towards their financial goals. Our medium-term priorities Launch new flexible and modular solutions, such as the new savings and income proposition, by utilising the new core technology infrastructure Launch of our transactional banking capability in South Africa Further integrate Old Mutual Rewards across our solution set 1 2 3 4 What we achieved » Continued enhancements to Old Mutual Rewards, with membership numbers now reaching over 2.2 million (2022: 1.8 million). We also launched Old Mutual Rewards in Namibia » Continued the accelerated growth of Old Mutual Protect, our market-leading risk proposition, which also supported the shift to underwritten life sales in the South African retail mass market » Expanded our health insurance offering, through the launch of Old Mutual Health Solutions » Enhanced our SMME offering through the next iteration of the SMEgo platform, feature enhancements include online payment links to help businesses get paid faster, the incorporation of insurance for business protection and funding enhancements that enable businesses to get their credit score and select the most suitable funding product » Launched a pilot of our home loan solution, in partnership with SA Home Loans. Our Rewards programme is integrated into the solution. Impacted capitals and resource allocation Inputs Outcomes FC Financial capital HC Human capital IC Intellectual capital Increased Increased Increased FC MC SC Associated value driver » Revenue growth Strategic KPIs Old Mutual Rewards membership (000) Number of people reached through financial education1 (m) 2023 2 200 2022 1 800 2021 1 300 2020 830 2023 20 2022 2021 2020 37 22 20 Old Mutual Protect Life APE sales2 (Rm) Old Mutual Protect active policies (m) 2023 2 158 2022 1 854 2021 1 645 2020 300 2023 2022 2021 2020 1.8 1.7 1.1 1.0 Launch home loan and solar solutions 1 This metric comprises of financial education social media reach as well as face-to-face financial education. In the last year, the social media platforms X and Facebook have changed their data extraction methodologies to no longer include organic reach figures. This has resulted in the decrease in number from 2022 2 Standardised measure of the value of new life insurance business underwritten 59 Integrated Report 2023 Growing and protecting the core continued Holistic coverage of customer needs continued Providing quality access to affordable health care The launch of Old Mutual Health Solutions marks an exciting milestone in our journey to becoming our customers’ financial partner of choice and provider of integrated solutions. We recognise the importance of improving health care access and outcomes as a priority customer need. Starting with a primary care focus, we acknowledge that the cost of comprehensive medical aid is prohibitive for many South Africans. Statistics show that 84% of South Africans currently rely on an overburdened public health care system, with only 16% of the population able to access private health care. Our solutions, offered in an integrated fashion, as part of Old Mutual Corporate’s employee benefits proposition, were launched to fill this gap in the market. The offering spans a range of solutions that provide affordable access to high-quality private health care to employees who earn up to R30 000 per month. The innovative solution provides value to employers and employees. Many employees are forced to miss days of work when seeking medical attention and may not get the quality care they need to recover from illness or injury. Employers benefit from this solution through lower absenteeism and improved productivity. Employees benefit from access to quality health care and value-added benefits that contribute to their holistic wellbeing. With every plan, members gain access to a personal health adviser, a clinically trained professional available for telephonic consultations and advice around the clock. The plans also include 24-hour emergency medical services, ensuring access to private emergency care when needed, financial support with accidental death benefits and access to a primary health care nurse to support wellbeing. Supporting financial wellness through financial education Financial education forms the foundation of healthy financial behaviour by helping to close the gap in an individual’s financial knowledge. Our investment in financial education reaches more than 36 million customers in Africa. We see financial education as an important tool to support financial wellness, drive financial inclusion and improve overall financial resilience. In South Africa, On the Money is our flagship financial education programme that reaches several of our stakeholder groups, including our customers, advisers and the broader communities in which we operate. The content is delivered through a range of formats, making it easy for participants to interact with us in the way they are most comfortable. This includes face-to-face sessions, digital delivery through an online portal and an engaging podcast series. In 2023, we launched a new WhatsApp line to help customers and advisers proactively manage their financial journeys. Embedded with an AI capability, customers are able to get instant answers to a range of personal-finance related questions. Some of the content includes budgeting tips, steps to get out debt, guidance on drafting a will and the ability to connect with a financial adviser. On the Money reaches an audience of almost 20 million people, and makes a meaningful impact in supporting customers towards financial wellness. Participants are left feeling more in control and more financially confident after attending an On the Money session. The Big five secrets of money management THE BIG 5 SECRETS OF MONEY MANAGEMENT The On The Money programme concentrates on helping people get into savings habits, and get out of debt traps. Be fearless like the lion and take control of your money. THE SECRET OF THE LION Be fearless like the lion and take control of your money. THE SECRET OF THE RHINO Charge down your debt like a rhino. Do not let your debt run your life. Charge down your debt like a rhino. Don’t let your debt run your life. Focus on your goals like the leopard stalks its prey. THE SECRET OF THE LEOPARD Focus on your goals like the leopard stalks its prey. Pay attention like the elephant. Know your income, track your expenses and make informed choices. THE SECRET OF THE ELEPHANT Pay attention like the elephant. Know your income, track your expenses and make informed choices. Protect yourself, your THE SECRET OF THE BUFFALO assets and your family. Protect yourself, your assets and Grow your herd’s your family. Grow your herd’s (family’s) wealth. (family’s) wealth. A financial behaviour change experience For more information please email financialeducation@oldmutual.com Impact of On the Money sessions We see an increase in feelings of financial control ... » Pre-session: 25% of respondents feel like they are not in control of their finances » Post session: This number dropped to only 3% after the On the Money session We see an increase in financial confidence levels … » Pre-session: → 20% of respondents indicate that they are not confident in managing their finances before the session → 49% are confident in managing their finances » Post session: → Respondents that are not confident in managing their finances drop to only 4% after the On the Money session → Respondents that are confident in managing their finances increased to 82% after the session Catch Old Mutual On The Money on: On The Money Financial Education Programme @OM_OnTheMoney WhatsApp 011 966 8066 Old Mutual On The Money Board focus: Customer and product governance Old Mutual Life Assurance Company (SA) Limited is a licensed FSP and Life Insurer. 4 8 6 8 C 3 2 0 2 8 0 . S D B M O The Board has a statutory responsibility to ensure our customers’ interests are represented and safeguarded. During the year the Board: » Continued to oversee the Group’s efforts to enhance our customer centric approach to become our customers’ first choice, including the various digital capabilities being built to enhance the customer experience, particularly customer service » Considered and monitored the impact of the constrained macroeconomic environment on our customers » Monitored the compliance of our products and services with all relevant laws and regulations, including those related to consumer protection and data privacy » Continued to oversee the programme responsible for market conduct programme throughout the Group 60 Integrated Report 2023 Growing and protecting the core continued Distribution and digital engagement What we aim for » Customers and advisers can reach us where and when they need us – whether physically or digitally » Delivering a meaningful and personalised customer experience, integrated across digital and face-to-face mediums through the MyOldMutual platform » Making it easier for advisers to do business with us How we deliver this We will extend our traditional face-to-face interactions through new distribution channels and distribution partnerships. We will leverage new technologies to better enable our advisers and empower customers to connect with us through the channel of their choice. We will convert our understanding of our customers’ goals and circumstances to provide personalised, regular and meaningful engagement. At the centre of this intent is MyOldMutual, a pan-African digital platform that aims to deliver a seamless and integrated customer experience across our full suite of capabilities. This includes financial advice, financial education, rewards, data-driven nudges and a full suite of modular products. This will enable us to offer customers the right solutions at the right time, helping them to reach their financial goals. Our medium-term priorities Accelerate the rollout of our needs based goals and financial wellness platform to South African customers Grow adviser and franchise footprint across selected South African segments 1 2 3 What we achieved » Broadened our points of presence through strategic partnerships and acquisitions, including Bridge Taxi Finance, Pineapple (an insurtech company) and Two Mountains Funeral Services » Launched an innovative fintech solution in Zimbabwe called O’mari, which encompasses mobile money, insurtech and healthtech services » Enhanced our servicing processes to improve the customer and adviser experience, translating into an increase in our Net Promoter Score » Partnered with OneConnect Financial Technology (part of the Ping An Group, one of the largest integrated financial services companies in the world) to develop our new digital adviser workbench » Launched a pilot of the next iteration of our needs based goals and financial wellness capability to a small cohort of customers and advisers Impacted capitals and resource allocation Inputs FC Financial capital HC Human capital IC Intellectual capital SC Social and relationship capital Outcomes Increased FC Increased MC Increased IC Increased SC Associated value drivers » Revenue growth » Operating margins Strategic KPIs Net Promoter Score 2023 2022 2021 2020 70 67 70 60 Digital life APE1, 2 sales (Rm) 2023 368 2022 2021 315 310 2020 134 Digitally enable our advisers to improve the adviser experience and their productivity 1 Standardised measure of the value of new life insurance business underwritten 2 Digital sales figures are for South Africa only 61 Integrated Report 2023 Growing and protecting the core continued Distribution and digital engagement continued Enhancing the adviser experience Face-to-face distribution is our primary channel for advice-led sales and represents the tangible experience of the trust the Old Mutual brand is known for. Our intermediaries are an important element of our internal ecosystem. The intermediary landscape is characterised by an increasing regulatory burden, and professional adviser fees under pressure. By investing in the digitalisation of the intermediary proposition, we aim to make it easier for them to do business with us and, by extension, be better equipped to serve our customers. Our digital adviser enablement strategy aims to reduce friction in our systems to make it easier for our advisers to understand the full customer circumstances, use our platforms and offer our solutions to customers. The use of technology also allows us to automate administration and communication. This frees up time for advisers to deliver value by servicing customers, reviewing their portfolios and cover, setting goals and recommending appropriate solutions. We partnered with OneConnect Financial Technology (part of the Ping An Group) to leverage their leading insurance and technology expertise to build digitised solutions that will enhance our new digital adviser platform. We launched a pilot with a select adviser group and aim to scale the solution to the broader adviser community this year. Refer to the Sustainability Report for more detail on intermediaries Board focus: Digital journey governance The Board is responsible for overseeing the Group’s digital journey, it’s sustainability and facilitating the delivery of an integrated financial services offering. During the year the Board: » Ensured that the Group remained at the forefront of innovation and digitalisation → This ensures our products and services are competitive and meet the changing needs of customers → This includes using digital channels and data analytics to better understand customer needs and tailor products and services accordingly » Monitored the progress and effectiveness of information and technology strategies and initiatives across the Group, including reskilling employees and using AI tools » Ensured the Group’s cyber security risk is managed within tolerance levels » Considered and deliberated on new technologies and associated IT security risks, noting that management implemented mitigating controls Innovating through our fintech platform – O’mari In Zimbabwe, we launched our fintech business, O’mari, with a vision to create better everyday lives, today and tomorrow. O’mari offers mobile money services, insurtech, investech, digital lending, e-commence, electronic payments and digital products and services for the retail mass market. O’mari’s tailored products cater to the everyday person. They include unique micro-insurance solutions, FoodCare and SchoolCare, which offer simple, affordable, and flexible micro- insurance cover. The O’mari platform provides customers freedom of choice and convenience, care for loved ones and peace of mind that their families will be looked after should unfortunate events occur. As part of the platform’s loyalty and rewards programme, frequent transactions provide customers access to O’mari HealthCare. A single, convenient platform allows access to customers through multiple mediums. The platform comprises the O’mari mobile app, uniform, universal mobile network USSD short codes and a WhatsApp platform. The initial market response was overwhelmingly positive, with over half a million customers signing up on O’mari in the first six months following its launch. This platform aligns with our integrated financial services ambition to deliver practical solutions to customers’ everyday challenges. For more information on our technology operating context refer to page 42 62 Integrated Report 2023 Growing and protecting the core continued Operational efficiencies What we aim for » To achieve a better cost to serve while delivering with speed and agility » To enhance growth and margins through scale in processes, products and infrastructure » To optimise capital allocation and efficiencies How we deliver this We will leverage efficiencies through advances in technologies by (a) removing legacy systems where needed or migrating them to cloud based systems for higher scalability at lower cost; (b) implementing robotic process automation and AI solutions; and (c) investing in our infrastructure to deliver a product platform for unified solutions. This will enable us to offer multiple products to multiple segments using the same infrastructure, allowing us to extract the benefits of scale. These technology investments will also enable us to deliver a customer and adviser experience that is fast, consistent and able to meet their always-on expectations. What we achieved » We modernised our core South African retail administration platform, which services South Africa and Namibia. We launched Old Mutual Protect off this platform in 2021 with enhancements over time » We migrated our old generation risk solution’s in-force book (the risk solution known in the market as Greenlight) onto the new retail platform. We started decommissioning the old platforms, which will reduce operational costs once concluded » We migrated our South African IT estate to the cloud. We started this journey in 2019 and in Q1 2023, we successfully concluded the migration of 100% of our in-scope IT estate to the cloud, enabling improved scale and reliability of the underlying IT infrastructure » We streamlined our digital assets across the Group. This included consolidating 13 of our public websites into a single platform, allowing users to create, update, optimise, and deliver content to the right audiences at the right time on the right channels to improve our sales and service experiences across our different regions » We migrated our core platforms and data lake in Old Mutual Insure to the cloud Impacted capitals and resource allocation Inputs Outcomes FC Financial capital HC Human capital Increased FC Increased MC IC Intellectual capital Increased IC Associated value drivers » Operating margins » Competitive strengths » Execution and delivery Our medium-term priorities 1 2 3 4 Decommission South Africa’s heritage retail administration platforms Migrate Old Mutual Insure and Old Mutual Africa Regions Information Technology (IT) estate to the cloud Modernise Old Mutual Insure Insure’s information technology (IT) estate by leveraging data and technology to drive efficiencies Optimise allocated capital Migrating our heritage in-force risk book We successfully migrated our heritage South African risk book, Greenlight, onto our new retail platform and started decommissioning the old platforms. This represents an important milestone in our technology modernisation journey and towards delivering on our integrated financial services ambitions. Following the migration, our old generation Greenlight policies and our flagship Old Mutual Protect proposition are on our new retail administration platform. The migration is a tangible example of mutual value creation for our business and our key stakeholders. Our advisers benefit by being able to service customers on a common digital platform with Old Mutual Protect and includes features such as paperless servicing and straight through processing. These capabilities improve adviser productivity, operational efficiency and servicing cycle times. Our business benefits through the simplification of our life insurance operations and the cost efficiencies this brings. The cumulative impact is that we are able to continually innovate and deliver efficiencies to remain competitive over the long term. Our South African retail risk proposition in numbers Our Greenlight Migration Old Mutual Protect 1.85 million Greenlight policies 1.9 million Protect policies 63 Integrated Report 2023 Unlocking new growth engines Strategic growth businesses What we aim for To drive customer access, new offerings and capabilities through digital-led solutions, including ecosystem based ventures and strategic relationships. How we deliver this We invest in and allocate capital to new growth businesses and new business models with higher inherent risk-return profiles compared to incremental improvements to the core. Thus, we set up NEXT176 as a new business unit, with a strong investment governance system in place and we are building a bank. What we achieved » Entered into four key strategic partnerships through NEXT176 » Made significant progress on our bank build Impacted capitals and resource allocation Inputs Outcomes FC Financial capital HC Human capital IC Intellectual capital SC Social and relationship capital Increased MC Increased IC Decreased FC Associated value drivers » Capital efficiencies » Revenue growth » Operating margins Our medium-term priorities 1 2 3 4 Launch our bank in South Africa Make strategic investments in high-growth and disruptive companies across our targeted ecosystems Capitalise on the growing trend of disaggregated financial serves value chains Build large-scale, strategic relationships that support distribution channel expansion and product innovation opportunities Board focus: Banking offering governance The Group is focusing on delivering an integrated financial services offering, which includes building the bank. During the year the Board: » Through the Banking subcommittee, approved the submission of the licence application under section 16 of the Banks Act, 94 of 1990, for the registration of the banking offering » Monitored expenditure and progress to complete our banking offering » Oversaw the banking offering’s customer value proposition, the differentiation of the offering and its integration into the Group’s wider product offering Investing in our South African transactional banking capability Our application for a banking licence in South Africa brings us a step closer to delivering on our victory condition by enhancing our ability to sustain our customers’ prosperity. Our bank build is a core component of our integrated financial services ecosystem. A transactional banking capability enhances our ability to regularly interact with our customers and partner with them early in their life journeys. We are building the bank through a digital-led functionality and will primarily service upper mass market and lower affluent consumers (customers earning between approximately R5 000 – R80 000 per month). We have existing lending and transactional solutions in South Africa, consisting of our Money Account and an unsecured lending product. Our current transactional solution is delivered through a commercial arrangement with a third-party bank. Securing our own banking licence allows us to hold the primary relationship with our customers. This will drive greater regular interaction with them and enhance cross-selling opportunities across our businesses. Our core banking platform is being built using the latest, cloud native technology provided by 10x Banking. Building our bank from the ground up, using the latest available technologies, allows us to differentiate in the context of the South African retail banking landscape. This includes the ability to deliver personalised, cost-effective, flexible and scalable solutions to our customers. We are on track to launch our proposition within the next 12 months, subject to regulatory approval. The hallmarks of our bank Cloud native software-as-a- service model Reinvent the customer experience paradigm Allow us to react faster to customer needs, competitive forces Differentiated by cost 64 Integrated Report 2023 Unlocking new growth engines continued Strategic growth businesses continued Driving innovation through NEXT176 NEXT176 was established with a mandate to accelerate the growth and innovation agenda at an enterprise level. This includes delivering large-scale, strategic partnerships, supporting distribution channel expansion, product innovation opportunities, and capitalising on the growing trend of disaggregation of financial services value chains through embedded finance. NEXT176 delivers value by: » Building new growth ventures across our priority ecosystems to enhance our businesses of today and build businesses for future success » Investing in companies for either distribution or capability across key ecosystems and target sectors » Partnering with large scale businesses to unlock the benefits of embedded finance for customers Meeting customer needs through ecosystem based business models We aim to meaningfully impact our customers’ lives through our ecosystem approach. We aim to achieve this by solving friction points in the following ecosystems with attractive growth potential, where we are well placed for success. Education Sustainability and ESG Income protection Delivering shared value through strategic partnerships Strategic partnerships are a capital-efficient way to access customers at scale and represent a significant distribution opportunity for Old Mutual’s existing and new products. Over the past year, NEXT176 successfully concluded four strategic relationships, spanning the Vodacom Group, ShopriteX (the digital arm of the Shoprite Group), TEBA and SC Ventures (Standard Chartered’s innovation, fintech investment and ventures arm). Our partnership with the Vodacom Group included the participation of the Vodacom Group as an employer in Old Mutual’s SuperFund and Old Mutual transferred its mobile estate to Vodacom. Future areas of collaboration include the provision of finance for backup power solutions, supporting Vodacom’s ESG efforts through Tweak Carbon (NEXT176’s carbon accounting software venture) and insurance solutions through iWYZE. Through our partnership with Openview and ShopriteX, we launched a ‘buy now, pay later’ proposition, OsioPay, which is live in the market. The partnership between NEXT176 and ShopriteX seeks to explore synergies in our businesses in common ecosystems of focus. Debt Health Jobs TEBA and Old Mutual Will partnered to offer TEBA’s employees and over 280 000 customers access to the TEBA branded Digital Wills. This will allow them to protect their estates, safeguard their legacies and address the financial burdens associated with death expenses through simplified insurance products.  2022:  Our partnership with SC Ventures seeks to leverage synergies between our growth ventures. This started with micro, small and medium enterprise lending in Kenya through a partnership between SOLV Kenya, a platform for facilitating trade and financing for micro, small and medium enterprises, and Faulu, an Old Mutual Microfinance Bank, with Faulu making up the bulk of the current monthly disbursements. Refer to Industry trends on pages 41 to 45 of this report 65 Integrated Report 2023 Unlocking new growth engines continued Our new growth engines are an emerging part of our portfolio. They will deliver new revenue streams and future earnings for the Group over the longer term. These businesses are in their infancy, with considerable investment required to build the requisite infrastructure and capabilities. They were deliberately set up to allow us to deliver new solutions at pace and swiftly adapt to new trends as they emerge. We remain steadfast in our belief that doing the right thing for customers will translate into sustainable financial value over the long term. Strategic growth markets Our businesses in East and West Africa and our joint venture in China represent our strategic growth markets. We have a small presence in these regions and see the potential for faster growth relative to our core businesses. What we achieved » Corporate sales as a percentage of total APE sales was 55% in East Africa and 56% in West Africa » Strong improvement in underwriting margin across our East African businesses » Entered into four strategic partnerships in Ghana to deliver enhanced solutions to customers through innovative digital channels Impacted capitals and resource allocation Inputs Outcomes FC Financial capital IC Intellectual capital SC Social and relationship capital Increased MC Increased IC Decreased FC Associated value drivers » Capital efficiencies » Revenue growth » Operating margins What we aim for » To become a top three player in our chosen markets across East and West Africa over the medium term » To seek further growth opportunities in China given the position we occupy in the niche, affluent end of the market How we deliver this We will adopt a country and region-specific approach to deepening our presence in our identified growth markets. This means we might not participate in the full value chain in these markets, but instead focus on specific products, capabilities and partnerships to strengthen our regional positioning. Our medium-term priorities 1 2 3 4 Deliver profitable topline growth through a strategic pivot to corporate business in East and West Africa Turn around and fix underperforming businesses Expand our solutions and scale through strategic partnerships, digital technologies and disruptive innovation Explore new growth opportunities in China 66 Integrated Report 2023 Unlocking new growth engines continued Strategic growth markets continued Driving innovation and partnerships to accelerate growth in Ghana Our approach to organic growth in Ghana focuses on driving innovation through partnerships. Strategic partnerships support enhanced innovation, speed of execution and capital-efficient value creation through access to multiple ecosystems and diverse customer bases. We worked on collaborations and alliances within the digital economy and mobile money ecosystem. The mobile money sector recorded a transaction value of GHS1.9 trillion in 2023, with a compound annual growth rate of 50% since 2020. To date, we have six key partnerships within the fintech and telco industries. Our efforts aim to develop alternate distribution channels within these ecosystems by embedding and co-creating solutions. Our distribution and product related pilots underway include a partnership with a fintech, where we launched a savings-backed loan that allows customers to easily access emergency funds. We are piloting a savings solution with encouraging results so far. The lessons and customer feedback from these pilots will allow us to refine and enhance our offerings to support revenue generation and customer value in 2024. Delivering customer and shareholder value through our pivot to corporate  Given our smaller presence in some of our East and West Africa regions, we made a strategic choice to pivot to corporate offerings in selected markets to improve the profitability of our life insurance operations. This will ensure we deliver sustained growth over the long term, while the broader retail market matures. We rolled out the below initiatives to support this shift: » A more competitive product offering, including group life assurance with new product features and benefits » An enhanced broker value proposition to better support our intermediaries, including: → Training and development on specialist product topics → An enhanced servicing model, offering brokers dedicated support and quicker turnaround times → Our new top brokers’ conference, which aims to recognise our top supporting brokers and create a platform to share best practice examples from leading broker practices » Financial education for our customers and support for our brokers to deliver financial education to their clients The results thus far are encouraging, with corporate sales now accounting for over 50% of total life sales in East and West Africa. We saw a year-on-year improvement in the broker experience, which increased the number of supporting brokers. Our corporate brand tracker results confirm that we are on the right path to positioning the Old Mutual brand as a leading holistic employee benefits and wellness provider in Ghana. We observed an improvement in our 2023 survey results, which show that more corporates and intermediaries view Old Mutual as their preferred choice for group risk solutions when compared to 2022. Old Mutual Ghana is now also the second largest financial services provider in the Ghana corporate market, with a market share of 15%. 67 Integrated Report 2023 Enabled by Agile delivery driven by engaged employees What we aim for We believe agile delivery driven by engaged employees yields meaningful customer experiences. We strive to unlock the potential, passion and drive of our employees by creating meaningful experiences for them. We aim to create an environment where our employees find a deep sense of connection and meaning in our purpose and victory condition, as demonstrated by their relentless focus on delivering meaningful customer experiences at every stage of the customer journey. We want our employees to feel empowered and motivated to be part of an organisation that rewards and recognises high performance. How we deliver this Our people strategy focuses on building a future-fit, transformed workforce, culture and employee experience that enables the business to respond effectively to rapidly changing customer needs. In building this workforce, we are creating an environment that embraces new ways of working and developing the capabilities needed to gear the business for growth. This will be supported by driving the requisite culture shifts to create an agile and execution-focused organisation. We will also ensure our employee experience, including our employee value proposition, remains compelling to attract and retain key talent. What we achieved » Invested R241.6 million (2022: R176.4 million) in learning and development initiatives to support emerging talent, employee reskilling and upskilling and future-fitting our leaders » Decreased our score in the employee engagement dimension of our Culture Index Score to 4.32 (2022: 4.42) » Achieved an employment equity score of 10.471 (2022: 10.39) in South  Africa, and maintained our level 1 B-BBEE rating in South Africa for a fourth conservative year » Implemented a Remuneration Policy, which established a minimum annual salary of R180 000 for South Africa based employees » Enhanced our Parental Leave Policy to be more inclusive and gender- neutral; policy highlights include updated definitions of parents and co-parents to that of primary and secondary caregivers and fully paid parental leave across the Group » Issued an additional 5.04 million Bula Tsela shares in the Employee Share Scheme for new black South African employees who join a participating employer company; the grant was made under the original scheme rules using the initial allocation guidelines » Won the 2023 Top Graduate Employer Award in the insurance category » Received the Gold Award in the Best Integrated Campaign category of the 2023 South African Graduate Employers Association Awards » Won a double recognition by the South African Reward Association (SARA) for work on fair and responsible pay and strong disclosures in our 2022 Remuneration Report 1 B-BBEE verification for 2023 had not been completed at publication date Impacted capitals and resource allocation Inputs Outcome Increased HC FC Financial capital IC Intellectual capital SC Social and relationship capital Associated value drivers » Execution and delivery » Competitive strengths » Revenue growth Our medium-term priorities 1 2 3 Implement an agile operating model and ways of working to improve speed to market and efficiencies Enable a future-fit workforce by investing in future skills development Enhance our employee value proposition to attract, engage and retain top talent 4 Establish a diverse and inclusive workforce in all countries where we operate Strategic KPIs Employee engagement score (out of 6) 2023 4.32 2022 4.42 2021 4.54 Skills development spend (Rm) 2023 242 2022 176 2021 2020 82 89 68 Integrated Report 2023 Enabled by continued Agile delivery driven by engaged employees continued Our approach to driving employee engagement The successful execution of our strategy would not be possible without our employees being adequately equipped to deliver on our victory condition. We recognise that a multi-faceted approach is required as no single solution is going to effectively retain a productive and engaged workforce. This includes our ongoing investments in learning and development, talent management, proactively managing employee wellbeing, the continuous evolution of our hybrid working model, and targeted women’s development, among others. For more information on what we are doing in each of these areas, refer to our Sustainability Report Our culture journey Our culture transformation journey underpins our approach, guided by our culture and engagement model as measured by our Pulse Culture Survey, which was launched in 2019 . The survey provides our employees with the opportunity to provide feedback on their experience of the organisation. The full Pulse Culture and Engagement Survey is conducted every second year, with intermittent mini Pulse surveys. The insights from the results are used to drive organisational change to achieve the desired culture. The overall Culture Index Score is an aggregate score of all questions in the 13 culture and engagement model dimensions, resulting in a score out of six. This score evidences the progress being made along the culture transformation journey, indicating how much work is required to achieve a positive and strong culture. All responses are anonymous and confidential. The data from the survey is used to create feedback reports on a Company, business unit and team level. The results are shared with all employees, executives and the Board. All leaders receive a dashboard with their team’s results to inform action plans to drive meaningful culture change and improve our employees’ experience of working at Old Mutual. We identified the following focus areas as we continue to shift the culture at Old Mutual: » Drive inclusive leadership through leaders who value their teams and are more inclusive in the way they manage their people » Enhance employee engagement where employees have energy at work and enjoy the work they do » Foster psychological safety where employees feel safe enough in their work environment to take interpersonal risks involved in highlighting inadequate performance or asking questions and making suggestions for improvement » Enable execution and delivery and internal service delivery by removing hassles that impact or hinder delivery within the organisation and to our customers » Attract and retain top talent by understanding our employee turnover risks and retention opportunities across critical talent groups » Further embed hybrid working initiatives focused on driving culture connectedness, leading high- performing teams, immersing new hires and those early in their careers and designing workspaces in different working environments Refer to the Sustainability report under the responsible to employees section . Refer to segment strategic performance for segmental survey results 69 Integrated Report 2023 Enabled by continued Agile delivery driven by engaged employees continued Progressing our diversity, equity and inclusion agenda by building a diverse and equitable workforce Our principal belief is that our strength and collective success lies in our diversity. It forms a core part of who we are, as reflected by our Company values. We embrace and respect the diversity of our people, and their differing views, opinions and experiences. We continue to champion gender rights and equality. Our diversity, equity and inclusion efforts align to our broader culture transformation journey as we work towards creating and sustaining an inclusive workplace. At Old Mutual, we represent various nationalities, races and cultures from across Africa, as well as different abilities, genders, generations, religions and beliefs. This helps to make us a strong, resourceful and resilient business. Old Mutual has zero tolerance toward discrimination, which is reinforced through our policies and practices. Employee resource groups Our employee resource groups bring our diversity and inclusion strategy to life and aim to drive connection, belonging, inclusion and engagement with our employees. We have three employee-led resource groups within the organisation. Through Pride@Mutual in South Africa, we aim to create a safe space for employees who identify as LGBTQIA+, and their allies, to drive meaningful change across our South African businesses. Pride@Mutual is committed to championing diversity and inclusion by driving an inclusive culture of respect, acceptance, and ongoing learning that authentically acknowledges people’s differences and similarities, enabling our employees to achieve their full potential personally and professionally within a safe working environment. In 2023 Pride@Mutual represented Old Mutual at pride marches and events to demonstrate our support for the broader social cause. Millennials@Old Mutual (MiOM) aims to create open and accessible platforms for young Mutualites to meaningfully contribute to shaping Old Mutual’s future. MiOM’s vision is to connect and engage Mutualites to influence the growth of Old Mutual Limited, giving a voice to young people in co-creating Old Mutual’s success story. The 2023 focus for MiOM was financial wellness, in light of the current socio-economic realities faced across the globe. Through an ongoing series of webinar engagements, MiOM has tackled topics ranging from the importance of financial advice and planning to the possible impact of retirement reform and the pending implementation of the two-pot system in South Africa in 2024. The Old Mutual Women’s Network (OWN) provides a platform for women across our business to make a real difference in the workplace and within communities in which they operate. OWN has expanded its reach over time from South Africa to all of Africa. Each country receives Group support and guidance but runs independently to ensure authenticity and relevance in its strategy and implementation, given the diversity of environments and needs across our pan-African business. In 2023 OWN took on the challenge to look beyond creating equal opportunities for women within Old Mutual and broader networks to truly understand women’s circumstances and act to empower them through projects and masterclasses. Business agility to accelerate execution and delivery Execution and delivery is one of our value drivers and is critical to our competitiveness and ability to respond to our customers’ ever-evolving needs. We see business agility as a way to accelerate execution. We drive agility by transforming how teams organise themselves through agile practices, roles and events in certain parts of our business. To support the shifts required, we established an Agile Centre of Excellence to establish best practices and support their rollout in suitable areas of the organisation. Some established practices include developing the Old Mutual Agile Playbook, and introducing quarterly interaction models, agile forums and agile learning offerings. Decentralised decision making Putting the customer at the centre of everything we do Continuous learning and improvement Business agility Self-organising teams Continuous and incremental delivery Board focus: Culture and human capital governance The Board is responsible for setting and steering the Group’s culture. During the year the Board: » Continued to oversee the Group’s cultural transformation to a higher-performance culture, suited to a hybrid working environment » Monitored the Group’s efforts aimed at identifying, recruiting and retaining critical skills, as well as initiatives aimed at reskilling of employees to enable the delivery of the Group’s strategy » Continued to monitor the Group’s succession planning, in particular the succession plans for the eight Non-executive Directors who are due to step off the Board over the next two years, as well for the Executive committee and heads of control functions » Monitored Group culture and employee wellbeing to support a high-performing workforce in a changing world of work 70 Integrated Report 2023 Rewarding strategic performance Remuneration philosophy and principles Our remuneration philosophy underpins our Group strategy in supporting a high-performance culture that remunerates engaged employees who make meaningful contributions to achieve the Group’s purpose, victory condition and values. Our core remuneration principles support this philosophy and are underpinned by our fair and responsible pay approach, ensuring that remuneration across the Group is externally relevant, internally equitable and supports the delivery of the Group’s short, medium and long-term objectives. Our approach to variable pay The Remuneration committee reviews the appropriateness of the variable pay structures annually. Variable pay should align to shareholder outcomes, align with the Group strategy and maintain clear and appropriate pay for performance. The current structures facilitate this through the following key features: Alignment with Group strategy Pay for performance Alignment with shareholder outcomes Metrics are carefully selected to align with our value drivers, which support us to responsibly build the most valuable business in our industry. Pay is closely linked to financial performance, with an emphasis on operating profit and a high weighting to other key financial metrics in the scorecard. We have clear and transparent award limits with on target calculated as a percentage of TGP with appropriate maximum and threshold criteria. Minimum levels of individual performance must be maintained. Executive remuneration is targeted to deliver more than 50% of total remuneration in the form of shares. For the STI, vesting of deferred shares is broken into three tranches over one, two and three years. For DPA, the vesting period is spread over years two, three and four. Malus and clawback provisions may be triggered under various conditions Delivery of value drivers measured through performance metrics A single Group scorecard applies to both the short-term incentive and deferred performance award creating aligned focus across the organisation. The Group scorecard is closely aligned to the Group’s strategic direction and objectives and measures delivery against financial, strategic and ESG-linked objectives. The majority of the incentive outcome remains linked to financial performance. Operational profit delivery drives the creation of the short-term incentive pool. This creates a direct link to financial value creation. The scorecard then increases or decreases the short-term incentive pool depending on wider business performance. The outcome of the deferred performance award is similarly driven by financial performance with a 65% weighting to this category. Capital efficiency, as measured by return on net asset value excluding new growth initiatives, has a high weighting given the focus on ensuring an efficient use of capital in delivering shareholder outcomes. In addition, total shareholder return relative to peers and the broader market has been included. This closely aligns the experience of shareholders with that of management. The vesting period of the awarded shares is between two and four years, further aligning management outcomes with those of shareholders. 2024 Group scorecard link to Group strategy Category Performance metrics Value driver V A L U E DRIVERS RFO Outcome of value drivers RoNAV excluding new growth initiatives Capital efficiency VNB VNB margin Revenue growth Operating margin Old Mutual Insure net underwriting margin Operating margin Gross flows and gross written premiums Revenue growth Financial Strategic delivery Relative total shareholder return (TSR) (Peer group and Capped SWIX 40) Growing and protecting the core Unlocking new growth engines Engagement index ESG Customer growth and experience Sustainable investing Outcome of value drivers e f C a f c Revenue growth Competitive strengths Execution and delivery Execution and delivery Revenue growth Operating margin Revenue growth i p e i t n a c l i e s e u n R e v e gr o w t h O U TCOME O p er m ar a ti n g i n g s s h t g n e v i t i t e p m Co stre RESPONSIBLY BUILD THE MOST VALUABLE BUSINESS IN OUR INDUSTRY Execut i o n and deli v e r y R V I C T ORY CON DIT I O N U O To be our customers’ 1st choice to sustain, grow and protect their prosperity 71 t r o p e R n o i t a r e n u m e R e h t m o r f t c a r t x E Integrated Report 2023 Rewarding strategic performance continued 2024 Group scorecard for STI and DPA t r o p e R n o i t a r e n u m e R e h t m o r f t c a r t x E Weight Component 20.0% RoNAV excluding new growth initiatives 12.5% VNB 10.0% VNB margin 65% 2.5% Old Mutual Insure net underwriting margin Threshold 50% 12.2% Target 100% 14.2% Maximum 150% 16.2% Cost of equity Cost of equity + 2.0% Cost of equity + 4.0% Target – 20% Prior year excluding large deals1 Target + 20% 2.0% 3.0% 2.2% 4.5% 2.5% 6.0% 10.0% Gross flows and gross written premiums Target – 15% Prior year Target + 15% 5.0% 5.0% 7.5% 7.5% 15% Relative TSR: peer group Alexforbes, Discovery, Momentum Metropolitan Holdings and Sanlam TSR outcome in line with peer group average Interpolation Highest TSR delivery of peer group Relative TSR: capped SWIX 40 JN430 0.0% +2.5% +5.0% Growing and protecting the core Focusing on capabilities to support the holistic coverage of customer needs as well as actions underway to deliver operational efficiencies Unlocking new growth engines Developing our bank capability and executing our Old Mutual Africa Regions strategy (focusing on performance in East and West Africa) Internal quantitative assessment of delivery against targets as approved by the Remuneration committee and aligned with the business plan and strategy. 5.0% Employees – Engagement index 20% 10.0% Customers – Customer growth and customer experience Internal quantitative assessment of delivery against targets as approved by the Remuneration committee and aligned with the business plan and strategy. 5.0% Sustainability – Impact investing 1 Not disclosed for competitive reasons The Remuneration committee uses an approved methodology to assess the impact of significant deals in Old Mutual Corporate on VNB margin. This incorporates capping the contribution of the deal to ensure it does not distort the Group VNB margin outcome relative to shareholder value creation. The Remuneration committee may be required to exercise discretion if any business units no longer contribute to key performance indicators. If corporate activity materially impacts the outcome of the relative TSR metrics, the Remuneration committee may be required to exercise discretion. Our bank build targets are subject to potential regulatory and third-party delays. The Remuneration committee may exercise discretion regarding the outcome of this metric if the delays are outside of management’s control. In line with our incentive practices, any changes will be communicated to shareholders. l a i c n a n F i y g e t a r t S G S E Financial Strategy ESG Financial metrics have remained largely aligned with the 2023 scorecard. Capital efficiency remains a core component of the scorecard, with the largest weighting. We updated the metric to reflect the capital efficiency of our core operations given the significant investment in the bank build and its impact on capital returns over the short term. Targets remain linked to cost of equity. VNB and VNB margin are critical components of the scorecard. VNB assesses the growth in life business through profitable new business. VNB growth of 37% into 2023 was exceptional. To allow for this high base, the scorecard has been set such that repeating the significant 2023 VNB delivery will result in an on-target outcome. VNB margin assesses the efficiency of this profit generation with targets set relative to our medium-term targets. The Old Mutual Insure net underwriting margin is introduced into the scorecard for 2024 with a weighting of 2.5%. Similar to VNB margin, this metric assesses the efficiency of delivering underwriting profit in Old Mutual Insure. Targets are wider than our medium-term targets given the increased volatility over a one-year period due to climate events. Gross flows and gross written premiums represent growth across Life, Asset Management and Property and Casualty through new and existing business. As with VNB, delivery of growth in gross flows and gross written premiums was particularly strong in 2023. The target has therefore been set requiring the 2023 level of flows to be repeated. Relative TSR metrics align the outcome for management with that of shareholders. Performance is assessed relative to peers as well as the wider market (represented by the Capped SWIX 40 benchmark). Targets are set with performance in line with the peer group or broader market required before an incentive is achieved. Our integrated financial services strategy has two key areas of focus, growing and protecting the core and unlocking new growth engines. The scorecard is aligned to this strategy and performance will be measured quantitatively against a scorecard agreed upon with the Remuneration committee and aligned with the internal business plan. Growing and protecting the core The scorecard focuses on building capabilities to support our customers’ financial wellness and operational efficiencies, which are measured using financial key performance indicators and project milestones. Unlocking new growth engines Two key areas are included in the scorecard: developing our bank proposition and improving performance in our Old Mutual Africa Regions business. The delivery of the bank proposition will be measured taking into account feedback from the banking committee. Execution of our Africa strategy focuses on the pivot to Corporate sales in East and West Africa and improving the OMAR net underwriting margin. The metrics are consistent with the 2023 scorecard, with three key focus areas: Employees – The employee engagement index continues from the prior year and measures employee engagement levels using energy, commitment and positive feeling as metrics. Research identified these dimensions as being closely linked to improving service delivery and operational support, which are closely linked to better outcomes for our customers. As our organisational culture improves, our customer satisfaction and brand reputation will improve. Customer growth and experience – This includes a quantitative assessment of the growth we drive in our retail customer base and customer experience. We use three metrics to measure this focus area: Average needs met per customer in the retail segments Customer numbers in Mass and Foundation Cluster and Personal Finance » Net Promoter Score across our South African businesses Impact investing – Previously called green economy, we renamed this metric to reflect that investments are not purely focused on the environment but also reflect investments in affordable housing, health, water and education. Growth in new business across our Listed Equity and Alternatives funds and propositions is assessed relative to targets approved by the Remuneration committee. Further information is provided in the 2022 Remuneration Report. 72 Integrated Report 2023 GROUP FINANCIAL PERFORMANCE In this section Group highlights Group financial review Balance sheet and capital metrics Supplementary income statement Group financial performance 74 75 77 81 83 73 Integrated Report 2023 Group highlights Casper Troskie Chief Financial Officer Old Mutual delivered strong growth in adjusted headline earnings of 21%, underpinned by exceptional sales growth with value of new business up 37% on the prior year. I I W E V E R L A C N A N I F P U O R G Key performance indicators Rm (unless otherwise stated) Results from operations Adjusted headline earnings Headline earnings1 IFRS profit after tax attributable to equity holders of the parent1 Return on net asset value (%) Return on net asset value excluding new growth initiatives (%)2 Group equity value Discretionary capital (Rbn) Group solvency ratio (%)1,3 Dividend cover (times)4 Per share measures5 Cents Adjusted headline earnings per share6 Headline earnings per share1 Basic earnings per share1 Total dividend per share Interim Final Group equity value per share7 Supplementary performance indicators Rm (unless otherwise stated) Life and Savings and Asset Management Gross flows Net client cash flow Funds under management (Rbn) Life and Savings Life APE sales Value of new business Value of new business margin (%) Banking and Lending Loans and advances Net lending margin (%) Property and Casualty Gross written premiums Insurance revenue Net underwriting margin (%) I S W E V E R T N E M G E S FY 2023 FY 2022 8 343 5 861 7 380 7 065 11.1% 13.1% 90 114 1.1 178% 1.5 7 310 4 850 5 854 5 231 9.4% 11.0% 89 477 3.5 188% 1.7 Change 14% 21% 26% 35% 170 bps 210 bps 1% (69%) (>100 bps) (12%) FY 2023 FY 2022 Change 129.0 165.5 158.4 81 32 49 1 880.9 106.4 129.2 115.5 76 25 51 1 820.9 21% 28% 37% 7% 28% (4%) 3% FY 2023 FY 2022 Change 203 802 (7 510) 1 331.0 178 027 (12 425) 1 231.1 14 604 1 921 2.3% 19 391 11.3% 25 513 25 204 0.1% 12 501 1 400 2.2% 19 009 13.1% 22 344 22 082 1.4% 14% 40% 8% 17% 37% 10 bps 2% (180 bps) 14% 14% (130 bps) 1 These metrics include the results of Zimbabwe. All other key performance indicators exclude Zimbabwe 2 Return on net asset value excluding new growth initiatives was previously reported as core return on net asset value. This key performance indicator excludes adjusted headline earnings and equity impacts as well as any expected investment over the next 12 months into these initiatives. The prior year has been re-presented from 10.8% to 11.0% 3 The prior year has been re-presented to align results to the audited Prudential Authority submission 4 The dividend declared of 76 cents per share which amounted to a dividend cover of 1.7 times on an IFRS 4 basis was approved by the Board in 2022 5 Per share measures can be found on page 88 of summarised consolidated annual financial statements 6 Adjusted headline earnings per share is calculated with reference to adjusted weighted average number of ordinary shares. Weighted average number of shares used in the calculation of the adjusted headline earnings per share is 4 544 million (FY 2022: 4 557 million) 7 Group equity value per share is calculated with reference to closing number of ordinary shares. Closing number of shares used in the calculation of the Group equity value per share is 4 791 million (FY 2022: 4 914 million) 74 Integrated Report 2023 Group financial review Management of the Group’s balance sheet Shareholder capital management Overview The Group proactively manages its balance sheet in order to maximise long term shareholder value. This is driven by capital optimisation initiatives and efficient capital allocation, combined with sophisticated financial risk management and the strategic asset allocation of shareholder funds. This ensures that the balance sheet remains strong with capital deployment and capital optimisation supporting overall business growth. Balance sheet strength The Group and its subsidiaries set solvency and liquidity targets relative to the regulatory minimum requirements and risk capacity of the Group. These targets balance protection and business potential by assessing severe market impacts (‘perfect storm’ scenarios) while enabling investments into the business to support growth. The Group regularly models the impact of these extreme but plausible sequence of events, that could lead to a ‘perfect storm’ scenario on our solvency, capital and liquidity positions. These stress tests are calibrated at a 1 in 200 year stress event to ensure we remain sufficiently capitalised with appropriate liquidity. Solvency risk management The Group solvency position remained solid at 178% for the year ended 31 December 2023, within the solvency target range of 170% to 200%. Capital is allocated within the Group based on subsidiary risk profiles, the requirements of relevant regulators, competitor and customer considerations and return on capital targets. All entities’ solvency positions are monitored on a regular basis to ensure they are appropriately capitalised. The largest insurer in the Group, OMLACSA’s solvency position of 204% remained strong at the upper end of the solvency target range of 175% to 210%, for the year ended 31 December 2023. Shareholder liquidity risk management The Group’s liquidity is managed centrally which ensures that sufficient liquidity is available to withstand severe market stresses and that all subsidiaries carry sufficient liquidity to support their respective business activities. Sources of liquidity include liquid assets and contingent facilities, with the quantum of each driven by the specific liquidity risk being covered and underlying costs. The Group and subsidiary liquidity positions remained robust and within target ranges for the year ended 31 December 2023 and are sufficient to cover the modelled stress scenarios. Asset and liability management Products with shareholder guarantees or guaranteed rates of return require sophisticated financial risk management approaches to ensure relevant exposures remain within the Group’s risk appetite. Financial risks (including market, liquidity, funding, and reinvestment risk) are mitigated through capital market transactions and allocation strategies which recognise that risk and funding should be managed as scarce resources. Within OMLACSA, guaranteed products are managed centrally in line with the Group’s Three Manager Model operating framework to optimise hedging costs and ensure that capital within the Group is preserved. Financial risks are mitigated to allow the deployment of funds generated through liability product origination. This deployment follows a guaranteed product investment strategy, with the bulk of the funding invested in fixed interest credit assets within the respective investment businesses, taking into consideration the duration and nature of the product liabilities. For the rest of the Group, the financial risks resulting from the sale of guaranteed products are mitigated through the selection of appropriate matching assets. In geographies with mature capital markets, more sophisticated hedging programmes are executed to mitigate financial risk. Over the course of 2023, the OMLACSA asset and liability management programmes were rebalanced to align with the IFRS 17 liabilities and related market risk sensitivities. The rebalance spanned most of the first half of the year and was successfully executed despite volatile capital markets. The resulting decrease in financial risk exposures will lead to reductions in the underlying costs attached to the relevant asset and liability management programmes. Shareholder investments The Group manages its shareholder assets in accordance with the Strategic Asset Allocation Framework. The Strategic Asset Allocation Framework prescribes a low-risk investment strategy for invested shareholder assets aimed at protecting and preserving shareholder capital. The investment strategy targets an asset allocation that maximises net of tax expected returns subject to a defined market risk budget and the Group’s liquidity and solvency requirements. The shareholder investment strategy is designed to ensure optimal, long term investment outcomes, while managing the impact of short-term volatility on capital. The shareholder investment portfolio is managed in adherence to the Group’s Responsible Investment policy and transitional climate action plans. In South Africa, we mainly target a combination of protected equity and interest-bearing assets including a small allocation to bonds. The Nedbank stake was completely disinvested in August 2023. Various optimisations were implemented during the year, particularly within the fixed income and protected equity portfolios. Across the Old Mutual Africa Regions, the shareholder investment strategy adheres to the Group’s low-risk investment strategy aimed at protecting shareholder value. The strategy targets capital and inflation protection subject to the market risk appetite. Each entity has a bespoke investment strategy which is influenced by the respective macroeconomic and regulatory regimes. Significant progress has been made in de-risking the balance sheet in this regard and enhancing the investment outcomes for the entities in these regions. Given broader fiscal risks and the global economic backdrop, a more appropriate strategic asset allocation may be implemented in countries where there are inflationary or sovereign concerns in order to better preserve capital. Capital deployment The Group maximises shareholder value by balancing the return of capital to shareholders and allocation of capital for growth. This is supported by the cash generated from operations and capital optimisation initiatives. Free surplus generated Free surplus generated represents the cash generated from our operations which comprised of capital remitted by operating subsidiaries to the Group. The free surplus balance for the year ended 31 December 2023 was R4 779 million. Our operating segments continue to generate a high proportion of cash earnings of 82%. The free surplus is net of central costs and can be deployed to ordinary dividends with the remainder contributing to the discretionary capital balance. Dividend policy The dividend policy targets a full year ordinary dividend cover of 1.5x to 2.0x adjusted headline earnings. When determining the appropriateness of a dividend, we consider the underlying cash generated from operations, fungibility of earnings, targeted liquidity and solvency levels, the Group’s strategy and market conditions at the time. In light of our strong liquidity levels and well capitalised balance sheet, the Old Mutual Limited Board declared a final dividend of 49 cents per share, which amounts to a dividend cover of 1.5 times. 75 Integrated Report 2023 Group financial review continued Management of the Group’s balance sheet continued Discretionary capital The Group proactively manages its discretionary capital by optimising its allocation of capital and distribution to shareholders where appropriate. Discretionary capital represents the surplus assets available for distribution, deployment and/or acquisitions. The discretionary capital balance includes amounts earmarked for investments in growth and innovation initiatives including the bank build. Capital allocation The Group’s strategy is supported by financial metrics and targets that drive shareholder value. These targets and metrics are embedded in all significant business decisions, including the annual business planning process and in the assessment of inorganic growth opportunities. During 2023, the largest allocations of capital were to the Mass and Foundation Cluster, Personal Finance and Wealth Management as well as Old Mutual Corporate to support new business. These segments contribute to the majority of Group earnings. Any new opportunities are further appraised against our Group acquisition framework. This framework aligns all acquisitions with our strategy, while ensuring that the return generated over time will exceed the cost of equity, and will ultimately result in an increased return to investors. A gated approach to new ventures is followed, ensuring an appropriate delineation of capital allocation between our core operations and growth opportunities to balance profitability and long term growth. During 2023, the Group successfully concluded the following strategic corporate actions: The acquisition of a 75% ordinary equity interest in the Two Mountains Group, a licensed micro-insurer that distributes and underwrites funeral policies and provides burial services The acquisition of a 100% ordinary equity interest in Genric Insurance Company Limited, a licensed non-life insurer and specialist insurer focused on bringing innovative and niche insurance solutions to the market The acquisition of the remaining 25% ordinary equity interest in Old Mutual Finance (Namibia) Proprietary Limited resulting in the entity becoming a wholly owned subsidiary of the Group The acquisition of a 40% ordinary equity interest in Marsh Zimbabwe Holdings (Private) Limited, an insurance brokerage and risk management services provider The acquisition of Woodbridge Financial Services CC book of clients, an independent financial advice business The acquisition of 30% of the economics and associated rights attached to the iWYZE life and non-life businesses Balance sheet efficiency We are committed to generating long term shareholder value by delivering sustainable, cash-generative growth at returns on capital that exceed the cost of equity. Our core businesses are expected to deliver stable and high returns in the near to long term. Our Growth Portfolio is expected to require investment in the short term with higher growth in the longer term. As the Growth Portfolio reaches scale, it will support our long term return on capital targets. Return on net asset value Return on net asset value is used to assess and measure the capital efficiency of the Group. Return on net asset value excluding new growth initiatives excludes adjusted headline earnings and equity impacts as well as any expected investment over the next 12 months into these initiatives. Return on net asset value increased to 11.1% and return on net asset value excluding new growth initiatives increased to 13.1% for the year ended 31 December 2023. Improvements to our return on net asset value are dependent on three factors, the continued optimisation of our balance sheet, market share growth within our key markets and external market factors as well as investment returns. Capital optimisations The Group continues to optimise its capital structure to enhance value for shareholders. Initiatives to improve the management of working capital (across Other Group Activities and Personal Finance and Wealth Management) delivered material capital and liquidity benefits. The release of capital and distribution of profits in subsidiaries in Personal Finance and Wealth Management (exceeding R200 million) and Old Mutual Investments (exceeding R500 million), resulted in higher levels of dividends paid by these segments. Significant progress was made in managing the solvency drag of centrally held cash by utilising the central treasury company. This is mostly expected to support internal free cash flow generation. The Group remains committed to continuously identify opportunities to optimise its balance sheet. Issuance of tier 2 subordinated debt During the first half of the year, OMLACSA issued R859 million of floating rate subordinated debt under the Old Mutual Limited Multi-Issuer Domestic Medium-Term Note programme at 150 bps over three-month JIBAR. In November 2023, OMLACSA issued a further R641 million of floating rate subordinated debt at 134 bps over three-month JIBAR, bringing the total issuance for the year up to R1.5 billion. There were no OMLACSA subordinated debt redemptions in 2023. We intend to issue subordinated debt annually to optimise the Group’s weighted average cost of capital and create a smooth maturity profile, in line with the optimal gearing ratio of 15% to 20%, subject to market conditions and investor demand remaining favourable. 76 Integrated Report 2023 Balance sheet and capital metrics Rm (unless otherwise stated) Contractual service margin Return on net asset value (%) Return on net asset value excluding new growth initiatives (%)1 Invested shareholder assets Embedded value Group equity value Group solvency ratio (%)2,3 Discretionary capital (Rbn) Gearing ratio (%)4 Interest cover (times) Notes A B B C D E F F G G FY 2023 62 050 11.1% 13.1% 21 718 67 866 90 114 178% 1.1 18.0% 10.2 FY 2022 59 796 9.4% 11.0% 25 897 64 874 89 477 188% 3.5 15.7% 12.4 Change 4% 170 bps 210 bps (16%) 5% 1% (>100 bps) (69%) 230 bps (18%) 1 Return on net asset value excluding new growth initiatives was previously reported as core return on net asset value. This key performance indicator excludes adjusted headline earnings and equity impacts as well as any expected investment over the next 12 months into these initiatives. The prior year has been re-presented from 10.8% to 11.0% 2 The prior year has been re-presented to align results to the audited Prudential Authority submission 3 This metric include the results of Zimbabwe. All other key performance indicators exclude Zimbabwe 4 Gearing ratios are calculated with reference to the IFRS value of debt that supports the capital structure of the Group and closing adjusted IFRS A Contractual service margin The contractual service margin is set up at the initial recognition of an insurance contract. It represents a store of future profit held on the balance sheet which, with the risk adjustment for non-financial risk, will be released into profit over the lifetime of the insurance contract. The contractual service margin is the key driver of insurance profit emergence under IFRS 17. Contractual service margin (R billion) Predictable Not predictable 59.8 3.2 5.5 (6.5) (0.4) (0.6) 1.0 62.0 Expected range of future contractual service margin allocation to P&L: 8% to 12% FY 2022 New business Interest accretion Release of contractual service margin1 Economic experience items Non-economic experience items Foreign exchange impact FY 2023 1 Release of contractual service margin includes the impact of expected investment profits or losses equity Adjusted IFRS equity Rm Closing adjusted IFRS equity Equity attributable to the holders of the parent Equity in respect of operations in hyperinflationary economies Equity in respect of non-core operations Closing adjusted IFRS equity by region South Africa Old Mutual Africa Regions Average adjusted IFRS equity South Africa Old Mutual Africa Regions FY 2023 51 234 56 060 (3 326) (1 500) 51 234 39 760 11 474 52 611 40 406 12 205 FY 2022 53 342 57 585 (2 875) (1 368) 53 342 41 328 12 014 51 822 40 488 11 334 Change (4%) (3%) (16%) (10%) (4%) (4%) (4%) 2% (0.2%) 8% The contractual service margin increased by 4% from December 2022. The effect of writing new business of R3.2 billion contributed to growth of 5.3% relative to the opening balance. Interest income is added to the contractual service margin which amounted to R5.5 billion for the year. This equates to a return of 9.0% compared to 5.6% for December 2022. For our general measurement model contracts, the contractual service margin grows at the locked in interest rate, while for the variable fee approach, it grows at current interest rates. The expected contractual service margin allocation of R6.5 billion represents the portion that was allocated to profit for the year. The allocation rate was 9.4% for 2023 compared to 10.2% at December 2022, which is within our target range of 8% to 12%. The allocation is driven by ‘coverage units’, which is a driver of service delivery for each product. This release was the main contributor to our life operating profit in 2023. The economic experience of R1.0 billion was driven by actual returns being higher than expected on policyholder funds resulting in an increase in expected asset-based fee income on most investment and smooth bonus products, both in South Africa and Old Mutual Africa Regions. The impact of experience variances and assumption changes of R0.4 billion as well as foreign exchange impacts on profitable contracts amounting to R0.6 billion are included in the build-up of the closing contractual service margin of R62.0 billion at 31 December 2023. 77 Integrated Report 2023 Balance sheet and capital metrics continued B Return on net asset value % South Africa Old Mutual Africa Regions Return on net asset value Return on net asset value excluding new growth initiatives1 FY 2023 FY 2022 9.9% 7.5% 9.4% Change 170 bps 220 bps 170 bps Invested shareholder assets by asset class (%) 11.6% 9.7% 11.1% 13.1% 11.0% 210 bps 10% 1 Return on net asset value excluding new growth initiatives was previously reported as core return on net asset value. This key performance indicator excludes adjusted headline earnings and equity impacts as well as any expected investment over the next 12 months into these initiatives. The prior year has been re-presented from 10.8% to 11.0% Return on net asset value of 11.1% increased by 170 bps from 9.4% in the prior year, reflecting the solid growth in adjusted headline earnings. Similarly, return on net asset value excluding new growth initiatives of 13.1% increased by 210 bps from the prior year. Return on net asset value of 11.6% in South Africa increased by 170 bps, mainly due to growth in adjusted headline earnings attributable to South Africa from R3 995 million in the prior year to R4 680 million. This was primarily due to strong growth in results from operations and shareholder investment return. The average adjusted IFRS equity remained fairly flat year on year, however, the closing adjusted IFRS equity decreased by 4% in comparison to 31 December 2022. This was predominantly due to the share buyback programme which was completed in October 2023, with R1.5 billion of Old Mutual Limited shares delisted in the year. Old Mutual Africa Regions recorded an increase of 220 bps in return on net asset value from 7.5% to 9.7%. This was primarily due to higher adjusted headline earnings, resulting from the strong results from operations and shareholder investment return, partially offset by a higher average equity base. Closing adjusted IFRS equity decreased by 4% in comparison to 31 December 2022 due to dividends paid to the holding company and foreign currency depreciation, in particular the Malawian kwacha, Nigerian naira and Kenyan shilling. This was partially offset by an increase of R127 million related to acquiring the remaining 25% minority interest in Old Mutual Finance (Namibia) Proprietary Limited. C Invested shareholder assets Rm South Africa Old Mutual Africa Regions Invested shareholder assets FY 2023 FY 2022 Change Value of new business margin (%) 13 564 8 154 21 718 16 163 9 734 25 897 (16%) (16%) (16%) Invested shareholder assets of R21 718 million decreased by 16% from the December 2022 asset base of R25 897 million. The invested shareholder asset base in South Africa decreased due to the funding of the Old Mutual Limited share buyback and acquisitions as well as other planned allocations. In Old Mutual Africa Regions, invested shareholder assets of R8 154 million decreased by 16% from the prior year. This was primarily due to the financing of the remaining shareholding in Old Mutual Finance (Namibia) Proprietary Limited, dividend payments and a reduction in unlisted equity holdings, in line with de-risking the balance sheet. Currency devaluation in Malawi, East and West Africa also contributed to the decrease in invested shareholder assets. 28% 5% 23% 2023 5% 2% 27% 9% 23% 2022 4% 26% 8% 1% 23% 6% ● South African protected equity ● South African bonds ● South African fixed income assets ● South African unlisted and other assets ● Protected Nedbank1 ● Old Mutual Africa Regions equity ● Old Mutual Africa Regions interest-bearing assets ● Old Mutual Africa Regions investment property 1 The Nedbank stake was fully disinvested during the second half of 2023 D Embedded value Rm (unless otherwise stated) Adjusted net worth Value in force Embedded value Operating embedded value earnings Return on embedded value Value of new business FY 2023 26 822 41 044 67 866 7 298 11.2% 1 921 2.3% FY 2022 25 390 39 484 64 874 5 132 7.3% 1 400 2.2% Change 6% 4% 5% 42% 390 bps 37% 10 bps The return on embedded value increased to 11.2%, primarily driven by higher expected returns, profitable new business written, positive risk experience variances and risk assumption changes. This was partially offset by increased once-off expenses, worse than expected persistency experience and strengthening of our persistency assumptions. The operating embedded value earnings increased by 42% to R7 298 million. Value generated by new business was higher than prior year, driven by strong sales across the business and a more profitable mix of new business. This was partially offset by the impact of the higher yields. Despite the dividend outflows from our Life and Savings businesses, our total embedded value increased due to strong operating earnings and improved investment performance on both shareholder and policyholder funds. Actual investment returns on policyholder funds were higher than the expected yields, resulting in an increase in expected asset-based fee income on most investment and smooth bonus products. 78 Integrated Report 2023 Balance sheet and capital metrics continued E Group equity value Rm Covered business Non-covered business Asset Management Banking and Lending Property and Casualty Residual plc Zimbabwe Other IFRS equity 30 827 16 973 4 809 5 849 6 315 1 500 3 326 3 434 Total group equity 56 060 FY 2023 FY 2022 Group equity value 67 866 22 969 8 915 7 223 6 831 402 – (1 123) 90 114 Adjusted headline earnings 6 230 1 491 1 177 56 258 – – (1 860) 5 861 IFRS equity 28 881 17 715 5 481 6 228 6 006 1 368 2 875 6 746 57 585 Group equity value 64 874 22 631 8 301 7 945 6 385 412 – 1 560 89 477 Adjusted headline earnings 4 088 1 826 1 023 549 254 – – (1 064) 4 850 Group equity value of R90 114 million increased by 1%, reflecting the growth in covered business and higher valuations of the Asset Management and Property and Casualty businesses, partially offset by a lower valuation for the Banking and Lending line of business and lower value of the other line of business due to capital actions including the Old Mutual Limited share buyback of R1.5 billion as well as ordinary dividends of R3.8 billion. The group equity value of covered business is set at embedded value, which increased by 5% due to solid operating earnings and improved investment performance. The value of non-covered businesses is based on a series of directors’ valuations for each material legal entity, with the remaining entities included at IFRS equity attributable to equity holders of the parent. The increase in Asset Management group equity value of 7% was mainly due to higher valuations of Old Mutual Wealth and Old Mutual Investments. The increase in the Old Mutual Wealth valuation was largely driven by improved performance resulting in better forecast cash flows, supported by higher assets under management. The Asset Management IFRS equity decreased by 12%, driven by net dividends paid of R1.4 billion in South Africa and foreign currency depreciation in Old Mutual Africa Regions, particularly in Malawi and East Africa. The group equity value of the Banking and Lending business decreased by 9%, mainly due to a lower valuation of Old Mutual Specialised Finance. This was mainly as a result of dividend paid of R450 million and mark to market losses on certain instruments. In 2023, Old Mutual Finance in South Africa and Namibia was valued using a combination of valuation techniques, whereas in the prior year it was determined with reference to the purchase price agreed for the buyout of the 25% minority shareholding. The group equity value of Old Mutual Africa Regions Banking and Lending business decreased due to foreign exchange movements, particularly the depreciation of the Kenyan shilling. Property and Casualty group equity value increased by 7% mainly due to a higher valuation of Old Mutual Insure, which was driven by the acquisition of Genric Insurance Company and marginal improvements in forecast cash flow. The Property and Casualty business received capital injections of R300 million during the year. This was partially offset by foreign currency depreciation in Old Mutual Africa Regions. The Residual plc contribution to group equity value is based on the realisable economic value of approximately £17 million at 31 December 2023, translated at the closing exchange rate. The increase in value of Residual plc was mostly due to foreign exchange movements, partially offset by dividend paid of £3.1 million. The group equity value in Zimbabwe remained at zero due to the continued impact of hyperinflation on the Zimbabwean economy. The IFRS equity increased due to equity and property asset value growth which was partially offset by currency depreciation. Other includes the IFRS equity of holding companies (including cash), present value of central costs, our investment in new growth and innovation initiatives and our joint venture in China at fair value. The value of the other line of business decreased to negative R1 123 million, mainly due to the share buyback of R1.5 billion shares, funding of the strategic acquisitions and the investment in new growth initiatives. Dividends paid to shareholders for the year was R3.8 billion and dividends received from the covered and non-covered lines of business was R4.9 billion for the year. F Solvency and capital Solvency Rm (unless otherwise stated) OMLACSA Eligible own funds Solvency capital requirement Solvency ratio (%)2 Group Eligible own funds3 Solvency capital requirement Solvency ratio (%)2 Optimal target range FY 2023 Re- presented1 FY 2022 175% to 210% 170% to 200% 59 062 29 011 204% 100 530 56 398 178% 59 530 27 857 214% 93 149 49 632 188% Change vs re- presented (1%) 4% FY 2022 59 618 27 853 214% (>100 bps) 94 271 49 533 8% 14% 190% (>100 bps) 1 The prior year has been re-presented to align results to the audited Prudential Authority submission 2 Due to rounding of eligible own funds and solvency capital requirement, the ratio presented could differ when recalculated 3 Refer to table 3.2 in the additional disclosures for a reconciliation between IFRS equity to Group eligible own funds The solvency ratio for OMLACSA decreased to 204% from 214% at December 2022, mainly driven by the impact of the OMLACSA interim dividend of R1.6 billion, foreseeable final dividend of R3.1 billion and a foreseeable special dividend of R2 billion. In addition, profitable new business resulted in an increase in lapse risk. The Group solvency ratio of 178% remains within our target range. The reduction relative to the prior year was mainly due to the inclusion of Old Mutual-CHN Energy Life Insurance Company Ltd (‘the China operations’) on a South African prudential basis. In prior periods, with approval from the Prudential Authority, the own funds and solvency capital requirement were included on an alternate basis using the in-country regulations – China Risk Oriented Solvency System (‘C-ROSS’). The Group has performed a detailed investigation which indicates that the South African Prudential Standards calibration does not appropriately reflect the economic risks in the China operations and is more conservative than Solvency II. Our own view of the appropriate calibration of the economic risks is closer to C-ROSS. This change does not impact the Group’s cash generation, dividend capability or discretionary capital. Management’s assessment of an economic basis for China would result in the Old Mutual Limited ratio being at a similar level to 31 December 2022. 79 Integrated Report 2023 Balance sheet and capital metrics continued Free surplus generated from operations Rm (unless otherwise stated) Free surplus generated from operations Free surplus generated FY 2023 Adjusted headline earnings FY 2022 Free surplus generated Adjusted headline earnings % % 4 779 5 861 82% 7 473 4 850 154% Operating segments generated gross free surplus of R4 779 million in 2023, representing 82% of the adjusted headline earnings. Our operating segments continue to generate a high proportion of cash earnings, which were paid to the Group as dividends. The free surplus is net of central costs and can be deployed to ordinary dividends with the remainder contributing to the discretionary capital balance. Distributions contributing to free surplus generated include remittances from OMLACSA of R3 550 million, Old Mutual Investments of R900 million, Old Mutual Finance of R462 million, Old Mutual Africa Regions of R100 million and Old Mutual Residual plc of £3.1 million. Discretionary capital The Group discretionary capital balance as at 31 December 2023 decreased to R1.1 billion from the R3.5 billion reported at 31 December 2022 principally as a result of capital allocations. Capital allocations include the Genric Insurance Company acquisition of R300 million, the acquisition of an equity stake in the Two Mountains Group of R260 million, the minority buyouts of Old Mutual Finance Namibia of N$214 million, associated rights attached to the iWYZE life and non-life businesses of R269 million as well as the investment in growth initiatives, with the largest allocation to the bank build of R710 million, ongoing business support and the share buyback of R1.5 billion completed in October 2023. The discretionary capital balance of R1.1 billion has been earmarked for continued investment in our growth and innovation initiatives. An OMLACSA special dividend of R2 billion has been approved by the Board subject to regulatory approval. The dividend will increase our discretionary capital balance and will therefore be available for growth or return to shareholders. G Gearing and interest cover Rm (unless otherwise stated) Gearing1 IFRS value of debt2 Closing adjusted IFRS equity Gearing ratio (%)1 Interest cover Finance costs Adjusted headline earnings before tax and non-controlling interests and debt service costs Interest cover (times) FY 2023 FY 2022 Change 11 255 51 234 18.0% 1 020 10 387 10.2 9 942 53 342 15.7% 662 8 236 12.4 13% (4%) 230 bps 54% 26% (18%) 1 Gearing is calculated with reference to the IFRS value of debt that supports the capital structure of the Group and closing adjusted IFRS equity 2 Refer to table 3.3 in the additional disclosures for the reconciliation of IFRS value of debt to IFRS borrowed funds as disclosed in the IFRS balance sheet The gearing ratio of 18.0% increased by 230 bps from December 2022, reflecting increased levels of long term debt that supports the capital structure of the Group, particularly in OMLACSA and lower closing adjusted IFRS equity as a result of the share buyback of R1.5 billion. During the year, OMLACSA issued in total R1.5 billion of floating rate subordinated debt. The gearing ratio remains in line with our optimal gearing ratio of 15% to 20%. Interest cover of 10.2 times decreased by 18% from the prior year, which reflects the impact of increased finance costs in OMLACSA due to the higher interest rate environment, coupled with the issuance of subordinated debt in the current year. This was partially offset by the increase in adjusted headline earnings before tax, non-controlling interest and debt service costs, reflecting strong results from operations and significantly higher shareholder investment returns. Discretionary capital (R billion) 52% Used for Group growth initiatives 3.5 (1.0) (0.8) 0.8 0.1 43% Returned to shareholders (1.5) 1.1 FY 2022 Acquisitions Investment in growth initiatives Free surplus generated post dividends paid Optimisation net flows Share buyback FY 2023 80 Integrated Report 2023 Supplementary income statement Rm Notes FY 2023 FY 2022 Change Mass and Foundation Cluster Personal Finance and Wealth Management Old Mutual Investments Old Mutual Corporate Old Mutual Insure Old Mutual Africa Regions Net result from group activities Results from operations Shareholder investment return Finance costs Loss from associate1 Adjusted headline earnings before tax and non-controlling interests Shareholder tax2 Non-controlling interests Adjusted headline earnings 1 Reflects our share of loss related to our investment in China 2 Shareholder tax increased due to improved profits A B C 1 846 3 710 1 227 1 718 524 1 116 (1 798) 8 343 2 162 (1 020) (118) 9 367 (3 216) (290) 5 861 1 517 3 369 1 240 1 449 678 535 (1 478) 7 310 979 (662) (53) 7 574 (2 512) (212) 4 850 22% 10% (1%) 19% (23%) >100% (22%) 14% >100% (54%) (>100%) 24% (28%) (37%) 21% Adjusted headline earnings by region Rm South Africa Old Mutual Africa Regions Adjusted headline earnings FY 2023 FY 2022 Change 4 680 1 181 5 861 3 995 855 4 850 17% 38% 21% A Net result from group activities Rm Shareholder operational costs Interest and other income Net treasury gain New growth and innovation initiatives Bank build Next176 FY 2023 (1 614) FY 2022 (1 123) 357 194 (735) (626) (109) 367 (9) (713) (601) (112) Net result from group activities (1 798) (1 478) Change (44%) (3%) >100% (3%) (4%) 3% (22%) The loss on net result from group activities of R1 798 million, which includes new growth and innovation initiatives, increased by 22% from the prior year. This was mainly driven by higher shareholder operational costs, partially offset by the increase in net treasury gain. The increase in shareholder operational costs was mainly due to higher product administration platform costs and online adviser tools, increase in employee related costs following higher variable pay as well as foreign exchange rate movements on US dollar and pound denominated contracts. Significant consumption of diesel to keep branches operational during load shedding and continued investment in solar capacity also contributed to higher expenses. Material investment in IFRS 17 reporting capabilities continued during the year. We expect these expenses to reduce over time. The increase in net treasury gain was driven by favourable fair value movements on financial instruments. B Shareholder investment return Rm South Africa Old Mutual Africa Regions Shareholder investment return FY 2023 FY 2022 Change 1 099 1 063 2 162 252 727 979 >100% 46% >100% Shareholder investment return of R2 162 million increased significantly despite negative sentiment, a volatile investment environment and a lower asset base throughout the year. During the year, South African assets were negatively impacted by ongoing general pessimism over the economic outlook. Despite the challenging environment, the shareholder investment strategy in South Africa continued to meet the primary objective of protecting and preserving shareholder capital. The positive investment performance was largely due to the South African interest-bearing assets portfolio benefiting from higher interest rates returning 9.1% year to date. This represents approximately 1% outperformance of the STeFI Composite Index due to favourable duration positioning and a good asset selection of respective money market and credit assets. The South African listed protected equity portfolio returned 5.5%. The protected equity portfolio targets on average 50% to 60% of overall market performance. Therefore, given the Capped SWIX Top 40 Index return of 7.2%, this translates to a targeted benchmark return of 3.6% to 4.3%, with our portfolio outperforming by yielding a 5.5% return. The outperformance was primarily due to effective hedging management as well as the adoption of more frequent tranches, instead of quarterly. The hedging strategies on the protected equity portfolio are mainly executed in the form of zero cost collars of varying exposures and maturities whereby the exposure to losses is limited to 0% to 15% of the investment value, while the underlying equities passively track the Capped SWIX Top 40 Index. The local protected equity strategy is used primarily as a capital protection mechanism and thus is not expected to generate returns in line with the market. The local bond portfolio returned 9.9% year to date, marginally outperforming the Government Bond Index by 0.2%. The relative overweight position of the fund to the longer end of the yield curve during the year resulted in underperformance relative to the benchmark which was altered towards the end of the year. During the second half of 2023, the Nedbank holding was fully disinvested and therefore, going forward, will no longer contribute to shareholder investment return. The investment performance in South Africa was slightly offset by the impact of the unlisted equity portfolio that returned negative 3.7% for the year, mainly due to impairment losses experienced on a subset of assets in the portfolio. The unlisted equity balance, however, is a small component of the total asset base. Included in the investment returns was a gain of R95 million due to the OMLACSA asset and liability management programmes. These programmes focus on managing the financial risks associated with guaranteed products within OMLACSA, specifically guaranteed annuities and protection products. This contribution to investment returns is not expected to be significant in the long term and may vary depending on hedging performance and the ability to allocate guaranteed product funding. 81 Integrated Report 2023 Supplementary income statement continued As a result of the transition to IFRS 17, the shareholder investment return in OMLACSA was offset by the performance of assets backing the contractual service margin which resulted in a loss of R129 million. These assets were previously included in OMLACSA’s invested shareholder asset base and now supports the increase in the policyholder liabilities as a result of IFRS 17. Shareholder investment return in the Old Mutual Africa Regions of R1 063 million increased by 46%, primarily driven by increased investment returns in Malawi, Namibia and East Africa. In Malawi, investment returns increased by R176 million relative to the prior year due to fair value gains on listed equity investments. The Malawi Stock Exchange returned approximately 79% during 2023 compared to 37% in 2022, reflecting increased volatility which may result in returns reversing in future. In Namibia, investment returns increased by R91 million relative to the prior year, primarily driven by higher interest rates and a higher interest-bearing asset base. During 2023, interest rates increased by 300 bps. Increased valuations on unlisted equity holdings also contributed to higher investment returns. In East Africa, investment returns increased by R42 million primarily as a result of higher interest rates and reduced equity exposure. C Finance costs Finance costs on the long term debt that supports the capital structure of the Group increased by 54% from the prior year to R1 020 million, reflecting the impact of higher interest rates as well as increased levels of subordinated debt in OMLACSA. OMLACSA issued in total R1.5 billion of floating rate subordinated debt during the year and there were no redemptions in 2023. Reconciliation of adjusted headline earnings to IFRS profit after tax Rm FY 2023 FY 2022 Notes Change Adjusted headline earnings Accounting mismatches and hedging impacts Impact of restructuring Operations in hyperinflationary economies Residual plc Headline earnings Impairment of goodwill, other intangible assets and property Impairment of investment in associated undertakings Loss on disposal of subsidiaries and associated undertakings IFRS profit after tax attributable to ordinary equity holders of the parent A B C D E 5 861 (541) – 2 039 21 7 380 (273) (42) – 4 850 (187) (153) 1 171 173 5 854 (492) – (131) 7 065 5 231 21% (>100%) 100% 74% (88%) 26% 45% (100%) 100% 35% A Accounting mismatches and hedging impacts Accounting mismatches refers to items where current IFRS treatment does not align with the Group’s economic decisions. This includes once-off hedging losses arising from the transition of the guaranteed product related hedging programmes. During 2023, significant updates were made to the various hedging programmes given the implementation of IFRS 17 to ensure that the hedges remain appropriate. This line item also includes mismatch losses and gains on policyholder investments, where the IFRS valuation rules create mismatches in our asset and liabilities valuations. B Operations in hyperinflationary economies Due to hyperinflation in Zimbabwe and barriers to access capital by way of dividends, we continue excluding results from the Zimbabwe business from adjusted headline earnings. Profits in Zimbabwe were driven by investment returns earned on the Group’s shareholder portfolio and volatile currency movements. The investment returns largely relate to fair value gains earned on equities traded on the Zimbabwe Stock Exchange (ZSE) as market participants seek to invest in equities that preserve value in an inflationary environment. The ZSE generated returns of 982% during the year compared to 80% reported in 2022. At 31 December 2023, the year-on-year inflation rate for Zimbabwe was reported at 381%. We caution users of our financial results that the investment returns earned on the shareholder portfolio may reverse in future. C Residual plc Residual plc reported a profit of R21 million, a significant decrease from the prior year. The profits of Residual plc in the prior year were mainly driven by positive foreign currency movements on US dollar-denominated cash balances and dividend income received from subsidiaries. The cash balances decreased significantly following the dividend of £3.1 million paid to the Group in December 2023. D Impairment of goodwill, other intangible assets and property Impairments recognised in the current year related to goodwill in Old Mutual Insure as well as certain boutiques in Old Mutual Investments due to the decrease in the respective entities’ valuations. A write up in respect of our offices was recognised due to the improvement in property valuations. Furthermore, certain of our out of use digital assets were derecognised as no future economic benefits are expected from their use. E Impairment of investment in associated undertakings The impairment loss of R42 million relates to impairment of intangible assets held by an associate and is excluded from headline earnings as the look-through approach is followed as required by the SAICA Circular 01/2023. 82 Integrated Report 2023 Group financial performance Summarised consolidated statement of financial position At 31 December 2023 Rm Assets Goodwill and other intangible assets Mandatory reserve deposits with central banks Property, plant and equipment Investment property Deferred tax assets Investments in associated undertakings and joint ventures Costs of obtaining contracts Loans and advances Investments and securities² Other investments and securities including term deposits2 Cash and cash equivalents Insurance contract assets Reinsurance contract assets Current tax receivable Trade, other receivables and other assets Derivative financial instruments Cash and cash equivalents Assets held for sale Total assets2 Liabilities Insurance contract liabilities Reinsurance contract liabilities Investment contract liabilities Third-party interests in consolidated funds Borrowed funds Provisions Contract liabilities Deferred tax liabilities Current tax payable Trade, other payables and other liabilities2 Amounts owed to bank depositors Derivative financial instruments Total liabilities2 Net assets Shareholders’ equity Equity attributable to the equity holders of the parent Non-controlling interests Ordinary shares Total non-controlling interests Total equity 1 These amounts have been restated due to the adoption of IFRS 17 2 These amounts have been restated At 31 December 2023 At 31 December 20221 At 1 January 20221 7 833 133 8 388 47 172 3 945 1 075 431 18 210 958 120 936 785 21 335 4 992 8 798 497 49 599 8 210 38 121 1 058 6 934 173 8 259 42 530 4 740 1 065 478 17 615 892 404 867 080 25 324 3 697 8 071 415 30 839 9 688 37 467 370 6 234 195 9 155 38 672 4 782 908 523 17 617 903 671 881 481 22 190 2 645 9 463 462 17 869 6 391 32 931 269 1 156 582 1 064 745 1 051 787 619 200 1 706 230 629 109 548 16 085 2 001 495 5 232 453 95 932 5 139 11 587 581 052 903 195 404 102 749 16 713 1 729 411 3 370 712 84 216 4 706 12 580 1 098 007 1 004 545 58 575 60 200 608 422 1 671 205 269 77 308 17 506 1 767 435 6 520 499 57 565 5 905 8 082 990 949 60 838 56 060 57 585 57 724 2 515 2 515 58 575 2 615 2 615 3 114 3 114 60 200 60 838 Summarised consolidated income statement For the year ended 31 December 2023 Rm (unless otherwise stated) Insurance service result Insurance revenue Insurance service expenses Net expenses from reinsurance contracts Total insurance service result Investment result Net investment return Net finance expenses from insurance contracts Net finance income from reinsurance contracts Change in investment contract liabilities Change in third-party interest in consolidated funds Total net investment result Non-insurance revenue and income Banking interest and similar income Banking trading, investment and similar income Fee and commission income, and income from service activities Other income Total non-insurance revenue and income Non-insurance expenses Credit impairment charges Finance costs Banking interest payable and similar expenses Other operating and administrative expenses2,3 Total non-insurance expenses Share of gains of associated undertakings and joint ventures after tax Loss on disposal of subsidiaries and associated undertakings Profit before tax Income tax expense Profit after tax for the financial period Attributable to Equity holders of the parent Non-controlling interests Ordinary shares Profit after tax for the financial period Earnings per ordinary share Basic earnings per ordinary share (cents) Diluted earnings per ordinary share (cents) FY 2023 FY 20221 68 260 (54 450) (3 049) 10 761 135 901 (83 108) 586 (25 295) (12 753) 15 331 4 379 1 539 8 432 1 359 15 709 (2 349) (1 020) (852) (23 724) (27 945) 110 – 13 966 (6 333) 7 633 7 065 568 7 633 158.4 154.1 63 300 (54 010) (961) 8 329 20 412 (19 385) 92 5 987 (1 846) 5 260 4 505 1 026 7 484 999 14 014 (1 079) (662) (830) (18 459) (21 030) 118 (133) 6 558 (907) 5 651 5 231 420 5 651 115.5 113.4 1 These amounts have been restated due to the adoption of IFRS 17 2 Included in other operating and administrative expenses is finance costs of R1 047 million (2022: R783 million) which includes interest relating to funding that support the operations of the Group (funding within policyholder investments) of R909 million (2022: R665 million) and interest on lease liabilities of R138 million (2022: R118 million) 3 Fee and commission expenses, and other acquisition costs of R11 067 million (2022: R10 038 million) have been reclassified to other operating and administrative expenses following the implementation of IFRS 17 83 Integrated Report 2023 SEGMENT PERFORMANCE In this section Mass and Foundation Cluster Personal Finance and Wealth Management Old Mutual Investments Old Mutual Corporate Old Mutual Insure Old Mutual Africa Regions 85 88 91 94 97 101 84 Integrated Report 2023 Mass and Foundation Cluster Mass and Foundation Cluster is a retail segment that offers a wide range of simple financial services products to customers. Mass and Foundation Cluster is a business segment that operates in the low-income and lower-middle-income markets. The segment’s existing and potential customers span individuals who earn R1 000 to R30 000 per month. We offer a comprehensive range of value-for-money products to the mass and foundation markets across underwritten life and funeral insurance, savings, lending and transactional banking through the following divisions: » Retail mass market » Foundation market » Old Mutual Finance » Old Mutual funeral services Our diversified, multi-channel distribution network is enabled to deliver advice and non-advice solutions to our customers efficiently and continue to refine and invest in enabling our distribution channels across face-to-face and alternative digital and call centre capabilities. y e K s r o t a i t n e r e f f i d 1 2 3 4 5 Diversified distribution channels and customer touchpoints Strong financial education as part of our advice process Long-standing relationships with our stakeholders Positive brand affinity Holistic product proposition Operating context Mass and Foundation Cluster has an established brand presence in its core markets, driven by its face-to-face distribution force, with a growing contribution from franchise, digital, direct and foundation market retail channels. Low-cost and value-added offerings have become important features in this market segment as funeral product commoditisation continues to increase and customers struggle with unemployment and reduced disposable income. Debt servicing is becoming more expensive. Interest rates remain high, but we are expecting to enter a rate decrease cycle in 2024. Load shedding is expected to continue to negatively impact our operating context. Material matters: In response, we remain focused on delivering our integrated financial services strategy, supported by a holistic proposition, accessible through different channels including virtual advisers and strategic partnerships, while leveraging technologies to drive efficiencies. The proposition is supported by our financial education offering, aimed at empowering customers to make informed financial decisions about their future, which drives advice-led sales. Over time, this will deepen our relationships with stakeholders and communities, increase customer needs met, increase customer volumes, grow market share and improve profitability, while helping us to regain our foothold in the community. We expect the recovery in our customers’ disposable income to take two years and we therefore raised an economic recovery reserve to reflect this. We maintained a conservative approach in our lending business, Old Mutual Finance, as we continue to deliver loan sales growth within our risk appetite. Operational metrics 3.1 million customers 2022: 3 million 348 retail branches 2022: 348 4 153 tied advisers 2022: 4 065 9 137 employees 2022: 8 616 85 Integrated Report 2023 Mass and Foundation Cluster continued Strategic focus areas Holistic coverage of customer needs Mass and Foundation Cluster is the leader in market share in the mass market through strong sales, value of new business and value of new business margin. Customer growth continued in 2023, despite the adverse macroeconomic environment. The Mass and Foundation Cluster contribution to Old Mutual Rewards membership increased by 20% to 1.2 million. The delivery of integrated financial services was supported by the strategic partnership with Two Mountains within the funeral services market. We assumed management control of the business on 1 December. This partnership enables us to deliver a broader range of integrated solutions through vertically integrating the funeral services value chain and extending the offering to include micro-insurance products that are easy to access and affordable. Old Mutual Finance delivered R1.2 billion, lending cross-sell to our life customer base. Distribution and digital engagement Our diversified, multi-channel distribution networks have enabled us to deliver advice and non-advice solutions to our customers efficiently and yielded growth across all channels. We continued to focus on our strategy to leverage our diversified channels to grow in the margin-accretive retail protection market, supporting our strong value of new business outcomes. We materially grew sales in line with market and customer demand in our third party and foundation market channels. Old Mutual Finance partnered with Vodacom to offer a responsible credit solution to South Africans through the VodaLend app. The app will enable customers to apply for a personal loan online, and approved customers will receive the funds into their bank account within 24 hours of concluding the loan agreement. We are scaling up our voice and digital lending sales capability, with an improved risk profile and better lead conversion rates. This promotes interactions via digital channels to improve customer experience and service efficiency. Our voice and digital lending capability is enabled by simplified toolsets across channels, which improve the adviser experience. Continued investment in our enabling and digital capabilities will support sales growth and customer service experience in 2024. Operational efficiencies Our customers continue to be constrained by the rising cost of living. Persistency has been a challenge, but we have seen improvements driven by strategic delivery across our sales channels and enablement in 2023. We delivered improved results across value of new business and profitability. Our mortality experience strengthened in 2023 to partially offset some persistency challenges. We continue to enhance our Old Mutual Protect proposition, which is central to our focus on underwritten life and increasing our risk sales mix. Productivity across all our distribution channels contributed to our strong value of new business and value of new business margins in 2023 and cost management continued to be a business focus. Old Mutual Finance continued to deliver profitable growth, driven by responsible lending practices and efficiencies in transactional banking. Agile delivery driven by engaged employees Despite strong recruitment activities by competitors, our high-potential and critical skills employee retention remained stable. We continued to enable sales leadership with retention initiatives. Women in leadership and the increased employment of people with disabilities will remain a focus area in 2024. Our talent metrics demonstrated positive shifts in succession and the progress of talent development programmes. Our continued culture initiatives drive employee engagement and the Pulse Culture Survey achieved a 92% completion rate. These results signal an improvement, with priority initiatives driven to improve psychological safety and employee engagement. Our wellness initiatives drive positive shifts in overall employee wellbeing awareness and these will be amplified and scaled in 2024. Value creation Customers » R7.5 billion (2022: R6.9 billion) in claims and benefits paid » R16.4 billion (2022: R15.5 billion) in responsible lending to Old Mutual Finance customers to meet their financial goals Intermediaries » R51.8 million (2022: R44 million) spent on intermediary training and development » 52% intermediary retention score Trade-off We invested in building the new bank, which has reduced our developmental investments in Money Account. Key activities 2024 » Drive profitable top-line growth and an integrated customer experience » Continue to deliver on initiatives to improve persistency, product mix and efficiency » Ensure readiness to shift Money Account customers to our new bank » Drive positive outcomes from the Old Mutual Finance and Vodacom partnership to offer personal loans on the VodaLend app » Integrate Two Mountains into our ecosystem to realise synergies from the partnership 86 Integrated Report 2023 Mass and Foundation Cluster continued Financial performance overview Rm (unless otherwise stated) FY 2023 FY 2022 Change Results from operations Gross flows Life APE sales Net client cash flow Funds under management (Rbn) Value of new business Value of new business margin (%) Old Mutual Finance Results from operations Loans and advances Net lending margin (%) Credit loss ratio (%) 1 846 14 158 4 824 6 228 29.8 1 180 8.8% 335 16 371 11.0% 7.2% 1 517 12 924 4 216 5 580 28.6 930 7.5% 715 15 512 13.2% 4.8% 22% 10% 14% 12% 4% 27% 130 bps (53%) 6% (220 bps) 240 bps Gross flows of R14 158 million grew by 10% supported by annual premium increases and the inclusion of flows from our credit life business following the increase in shareholding of Old Mutual Finance in December 2022. Net client cash flow increased by 12% to R6 228 million due to growth in recurring premium flows, partly offset by higher surrenders as more customers continue to choose to access their savings to support them during these difficult financial times.  Life APE sales of R4 824 million increased by 14%, with new retail business volumes growing by 21%. Sales in high-margin funeral and underwritten products performed particularly well, recording growth of 26% and 61%, respectively. Foundation Market group business reported lower sales due to a large scheme joining in 2022 which did not repeat in 2023. Loans and advances of R16 371 million were 6% above prior year, supported by higher loan sales as we continue to grow the book responsibly. Results from operations grew by 22% to R1 846 million, largely due to higher life profits, partially offset by lower profits from the Banking and Lending business. Life profits showed a strong improvement compared to the prior year due to higher risk sales volumes, higher returns on the contractual service margin and better retention outcomes relative to stronger assumptions. Retention experience partly contributed to the stronger performance in the second half of the year as the additional provisions raised in June 2023 were sufficient to cover the losses that emerged. Some elevated levels of lapses and surrenders are expected to continue for the next two years as customers’ constrained disposable income takes time to recover. Banking and Lending profits declined due to higher credit losses and the negative impact of the higher funding costs from the rapidly increasing interest rate environment. This led to a decrease in net lending margin of 220 bps to 11.0% and a deterioration of the credit loss ratio to 7.2%. The value of new business grew strongly to R1 180 million, with value of new business margin up by 130 bps to 8.8% due to increased risk sales volumes and effective cost management as we continue to execute across our value drivers. 87 Integrated Report 2023 Personal Finance and Wealth Management Personal Finance and Wealth Management is a retail segment that offers holistic financial advice and long-term solutions to the middle and high- income market and high-net-worth clients digitally and in person through our high-calibre advisers. Personal Finance operates primarily in Life and Savings and offers a wide range of holistic financial advice and long-term risk, savings, income and investment solutions. Personal Finance targets the middle and high-income market, defined as individuals earning R30 000 to R100 000 per month. Products are distributed through tied advisers, independent financial advisers, agency franchises and direct channels, including digital, iWYZE and tele-advisers. Wealth Management is an advice-led, vertically integrated retail investment business that offers wealth management, investment solutions and funds to high-income and high-net-worth individuals. Wealth Management targets the affluent market, defined as customers earning more than R100 000 per month or with investable assets of greater than R15 million. The distribution channels include tied advisers, independent financial advisers and direct relationships with clients. We employ a diverse strategy to connect with our customers at their convenience, utilising in-person and digital channels. In pursuit of this, we invested in various distribution models involving independent advisers and our own top-tier advisers within our affiliated models. y e K s r o t a i t n e r e f f i d 1 2 3 4 5 Strong distribution network with a large financial adviser base High-net-worth and private client solutions locally and offshore Integrated wealth planning and investment solutions Comprehensive customer and adviser propositions Old Mutual Rewards programme Operating context Our recurring premium sales have improved from last year. However, at an industry level, recurring premium growth is constrained below normal expectations, as customers are reluctant to commit to products in the current macroenvironment. The strained economy continues to exacerbate financial pressure on our customers, resulting in increased levels of disinvestments from savings and investments. Management takes actions to improve sales activity across channels and monitor adviser productivity, particularly in the recurring premium business. Material matters: The continued globalisation of investment solutions is shifting local and offshore allocations in South Africa. Our wealth strategy has evolved to reposition Old Mutual Wealth as a global business for South African investors. We are refocusing our independent financial advisers’ proposition to be led by investment solutions. We are transforming multi-managers to become a dominant investment solution and consulting provider to financial advisers. Through Private Clients, we differentiate our offering and reach into the high-net-worth client segment. We continue growing our registered financial adviser distribution and advice businesses. Operational metrics 1.7 million customers 2022: 1.7 million 2 468 tied advisers 2022: 2 398 8 750 independent intermediaries 2022: 8 168 3 706 employees 2022: 3 541 88 Integrated Report 2023 Personal Finance and Wealth Management continued Strategic focus areas Holistic coverage of customer needs To further our integrated financial services, we enhanced our product offering. We launched: » Private Clients by Old Mutual Wealth to expand our high-net-worth client proposition and provide integrated services for customers » Old Mutual Wealth Cash and Liquidity Solutions, offering short-term fixed interest collective investment schemes funds to institutional investors that unlock value for customers with short-term liquidity needs » A world-class discretionary fund manager capability, designed to provide a range of solutions to meet our clients’ investment objectives We continue to lead with advice and drive internal flows across the Group’s investment capabilities. A new range of institutional funds, combining active and passive solutions in our multi-managers business, offer affordable investments that combine the best of South African and offshore asset managers. Our Old Mutual Rewards programme continues to be a central focus in our marketing initiatives and communication with advisers, consistently yielding positive cross-sell sales from our valued rewards members. To meet the increasing appetite for sustainable investment options, Old Mutual Wealth provides a sustainability rating for its collective investment schemes. The business is also working with its asset management colleagues to make infrastructure investments in the green economy accessible to retail investors. Traditionally, they have only been available to institutional investors. Distribution and digital engagement We continue to expand our digital platform capabilities, such as electronic signatures, to support the needs of financial advisers. Electronic signature functionality enables clients and advisers to submit and approve instructions electronically. This paperless measure enhances online investment experience while reducing the risk of identity theft and fraud. We launched an innovation platform where employees can submit ideas. The successful ideas have progressed to the experimental phase dedicated to incrementally implementing innovative initiatives in our business. We are piloting a succession solution to support successful ownership changes for independent financial advisers’ practices. We grew our experienced adviser cohort to 1 749 advisers, and Fairbairn Consult continues to attract independent advisers, with 183 advisers to date. The Greenlight book is our legacy protection solution with 1.85 million policies. We successfully migrated to our new product administration system in September 2023, which enables advisers to service customers with all the new functionality available on Old Mutual Protect, with the added benefit of doing it on one platform. Operational efficiencies We delivered double-digit growth on our new business volume and improvement in mix, with higher guaranteed annuity and better underwritten death and living benefit sales. Our recurring premium productivity per personal finance advice sales adviser improved by 11% year on year. Agile delivery driven by engaged employees We continue to foster an organisational culture of high performance and investing in professional development. Our core values underpin a workplace where talent flourishes. Our wellness programme has gained traction, particularly in promoting employee wellbeing. We continuously encourage our team members to utilise their leave to recharge and maintain their energy levels. We had a strong 80% participation rate in the 2023 Pulse Culture Survey. Our result was slightly lower compared to previous surveys (4.75 to 4.67), in line with similar declines across the Group. This outcome was not unexpected, given the external and internal challenges staff are facing. Inclusive leadership consistently shows up as a key strength; it was the top scoring dimension for our segment in the last survey. We believe our leadership enables a psychologically safe environment where people can speak up, bring their whole selves to work and deliver their best work. This enables a thriving culture of innovation. While internal service delivery was our lowest scoring dimension, it has consistently shifted positively over recent years. We plan to be more deliberate about driving execution and delivery by promoting collaboration and agile ways of working. Our recognition programmes for our sales and enablement teams serve as powerful levers to drive and embed behaviours that support our desired culture. Value creation Customers » R48.2 billion (2022: R43.7 billion) in claims and benefits paid » 69% customer satisfaction score Intermediaries » R62.8 million (2022: R52.2 million) spent on intermediary training and development Communities » Providing support through structured initiatives such as the Green Hands Trust » Launched Gift of Givers Fund Awards » The Old Mutual Wealth Global Equity Portfolio 1 Note won the prestigious South African Listed Tracker Award for its three-year performance track record. Trade-off We delayed the launch of our savings and income proposition to ensure it complies with the two-pot retirement system. Key activities 2024 » Penetrate our target market with full range of Old Mutual solutions to meet our customers’ financial needs » Increase our footprint through different distribution models by recruiting top-tier advisers and strengthen our new-to-market academy model, which is designed for first-time financial advisers » Continue to rebuild our value of new business through improved business mix and volume » Launch investment consulting service » Launch the digital adviser enablement platform » Construct our advice, marketing and distribution narrative to position Old Mutual Wealth as a global investment business for South African investors » Accelerate the growth of our Private Client offering and reach into high-net-worth segment » Transform the multi-manager business into a dominant solutions business for institutional and retail markets 89 Integrated Report 2023 Personal Finance and Wealth Management continued Personal Finance results from operations benefited from better returns and higher risk-free rates on our contractual service margin, positive reinsurance basis changes and higher morbidity profits compared to the prior year. Our actual mortality experience relative to expected mortality improved in 2023. However, mortality profits in 2022 were boosted by short term COVID-19 provision releases, which did not recur. The segment value of new business of R312 million increased by 64%, with a corresponding 30 bps increase in the value of new business margin. The strong growth in guaranteed annuities sales and the increase in savings business together with some shift in mix towards higher margin funds contributed positively to the value of new business and value of new business margin. The continued progress on our management actions to improve the proportion of higher margin risk benefits was partially offset by unfavourable economic impacts. Financial performance overview Rm (unless otherwise stated) FY 2023 FY 2022 Change Results from operations Personal Finance Wealth Management Gross flows Life APE sales Net client cash flow Value of new business Value of new business margin (%) Wealth Management Assets under management and administration (Rbn) Funds under management Intergroup assets Revenue Annuity Non-annuity 3 710 2 915 795 82 759 4 687 (8 227) 312 0.9% 369.6 434.9 (65.3) 3 258 3 145 113 3 369 2 716 653 77 130 4 068 (4 787) 190 0.6% 328.3 390.6 (62.3) 2 852 2 858 (6) Revenue bps – annuity1 90 bps 85 bps 1 Calculated as annuity revenue divided by average assets under management and administration 10% 7% 22% 7% 15% (72%) 64% 30 bps 13% 11% (5%) 14% 10% >100% 5 bps Gross flows for the segment of R82 759 million increased by 7% from the prior year. This was driven by strong guaranteed annuities flows in Personal Finance and further bolstered by inflows from our new Cash and Liquidity Solutions business in Wealth Management in the fourth quarter of 2023. Life APE sales for the segment of R4 687 million increased by 15% from the prior year. Personal Finance delivered strong single and recurring premium sales, driven by robust growth of 57% in guaranteed annuities and strong savings sales. In Wealth Management, Life APE sales were marginally higher than the prior year despite higher sales in the smooth bonus and fixed bond options as customers continued to show a preference for stable and guaranteed funds.  Net client cash flow for the segment worsened from negative R4 787 million in the prior year to negative R8 227 million. In Wealth Management, liquidity requirements in a tough operating environment resulted in outflows from a number of large clients across both local and offshore platforms, coupled with lower treasury advisory inflows. In Personal Finance, net client cash flow improved by R1 804 million due to strong single premium inflows which were partially offset by increased levels of disinvestments from savings and investments. Results from operations for the segment of R3 710 million increased by 10% from the prior year. In Wealth Management, higher annuity revenue was supported by higher average asset levels. Non-annuity revenue significantly increased due to improved market valuations of seed capital investments and a weaker rand against the US dollar exchange rate on offshore client portfolios. 90 Integrated Report 2023 Old Mutual Investments Old Mutual Investments is one of South Africa’s leading investment managers, offering investment solutions to institutional and retail customers. Old Mutual Investments operates through five affiliates across three investment business lines, namely: » Asset management, which comprises the following affiliate businesses: → Old Mutual Investment Group: listed equity, multi-asset and liability-driven investments → Futuregrowth Asset Management: fixed income and credit investments → Marriott Investment Managers: income solutions investments » Old Mutual Alternative Investments: unlisted alternative investments » Old Mutual Specialised Finance: shareholder credit and asset liability management Affiliates focus on their niche strategies to deliver on the customer propositions and improve competitiveness. Our investment solutions are accessible to other Old Mutual segments, linked investment service providers, multi-managers, and asset consultants. y e K s r o t a i t n e r e f f i d 1 2 3 4 5 Largest specialised fixed income and credit manager in South Africa Offer active, passive and Sharia investment management capabilities Largest infrastructure and renewables investment manager in Africa Market leader in integrating ESG in investment decisions Old Mutual Investment Group and Futuregrowth are majority black owned Operating context The global asset management industry has been set back due to volatile markets, high inflation and interest rates, all resulting in a weaker global economy. Locally we continue to grapple with the energy crisis, slow policy reform, high unemployment and low business confidence, but we remain focused on sustainable delivery of excellent investment outcomes for our clients. Our affiliates are making successful inroads in delivering on their strategic objectives despite the significant headwinds. Old Mutual Investments, continues to see the benefit of having diverse businesses in its portfolio. Material matters: The outlook for 2024 and beyond sees a notably tougher macroeconomic environment and a commensurately more difficult time for our local client base. Growing institutional and retail market share with the support of our Old Mutual Wealth partners, strengthening our investment platform and recruiting and retaining top talent will continue to be top priorities across the ecosystem. The most significant risk factor within our industry remains the increase in offshore allowance for local institutional asset owners, from 30% to 45%. This implies a tipping point has been reached and emphasises our pivot to a more diversified global product offering, building on a strong existing suite of global equity products, while seeking further local growth opportunities. Operational metrics 75% funds above benchmark over three years 20221: 81% 388 institutional customers 2022: 357 689 employees 2022: 661 R839 billion assets under management 2022: R774 billion 1 The percentage of funds above benchmark over a three-year period in 2022 has restated because the benchmark on Balance Composition changed to be strategic rather than a peer benchmark for the numbers to be consistent 91 Integrated Report 2023 Value creation Awards Old Mutual Investments continued Strategic focus areas Holistic coverage of customer needs New revenue lines are critical for all our affiliates and are a part of the key performance indicators. We completed our private markets initiative and launched infrastructure debt and hybrid equity funds, active ESG, structured fixed bond, overnight lending, shareholder protected equity and bond scrip lending offering, improving competitiveness in the third-party institutional market. We made good progress, with Old Mutual Alternative Investments delivering on its deal pipeline with deal flow totalling R16.5 billion for the year to date, of which R4.8 billion is in respect of green investments. The Global ESG Active Fund was launched on the retail platform in the third quarter of 2023 and is available to retail clients through Old Mutual Wealth and Old Mutual Unit Trusts. Old Mutual Investment Group commenced tracking against its Net Zero Asset Manager Initiative commitments and building decarbonisation scenarios and pathways for their portfolios. Distribution and digital engagement Old Mutual Specialised Finance, Futuregrowth and Old Mutual Investment Group are collaborating with Old Mutual Wealth, with new product development opportunities under discussion to maximise the business’s potential and to grow its assets under management over time. We made significant progress on information technology refresh projects across the business, for example, CompatibL’s Trade Order Management module, which highlights our desire to stay agile and responsive to evolving internal and external requirements. Old Mutual Alternative Investments had another strong year of capital being raised with a strong increase in third-party assets under management for the year and strong deployment activity. Operational efficiencies We are upgrading and investing in operating platforms and continue to invest in data warehousing and AI. Futuregrowth and Old Mutual Investment Group completed their respective CRM cloud migrations and a successful go-live of the Charles River Investment Management Solution. Specialised Finance delivered on its capital optimisation objectives, resulting in a capital release to the Group, which improved return on capital for Old Mutual Investments and assisted the Group with its capital optimisation focus. Agile delivery driven by engaged employees We manage culture change and diversity across affiliates to retain and attract top talent. For the first time, Old Mutual Investment Group was included in the 27Four BEE survey, the purpose of which is to map the progress of transformation in the South African asset management sector and to showcase the universe of majority black owned, managed and controlled asset managers across public and private markets. The benefit of having a black majority shareholding is that it gives us access to new client opportunities and helps client retention. In our continuous pursuit of cultural excellence, we acknowledge the significant role that culture plays in driving our business. Reflecting on the outcomes of our Pulse Culture Survey conducted in May 2023, we achieved a commendable response rate of 83%. However, our Index score experienced a slight dip, moving from 4.6 to 4.5. Each affiliate Executive committee communicated its results and developed comprehensive action plans based on these insights. The integration of the active investment teams and capabilities under the Old Mutual Investment Group Chief Investment Officer was concluded and has been well received, as it provides clearer focus on our investment proposition for clients through pooling talent. We made good progress with filling key vacancies to bolster investment teams with top talent. The Old Mutual Investment Group’s talent transformation plan continues to focus on black and female talent. Furthermore, we invested in and supported employee growth through leadership development programmes and establishing a talent forum. Customers » 75% (20221: 81%) of funds performed above the benchmark over a three-year investment period » Several of our alternative investment strategies, in particular our infrastructure and hybrid equity funds, performed well ahead of their benchmarks over the last year Communities » Our effective black shareholding in both Futuregrowth and Old Mutual Investment Group is at 56.3% and 55.0%, respectively » The Green Hands Trust allocated over R1.1 million towards education initiatives » Continued focus on ESG strategy » Donated funds to the Warriors of Hope organisation » Participated in 100 women in finance to empower women at every stage of their career Trade-off Investment in key capabilities and information technology refresh strategies may reduce shareholder returns in the short term but lead to increased profitability and reduce operational risk in the longer term. 1 The percentage of funds above benchmark over a three-year period in 2022 has restated because the benchmark on Balance Composition changed to be strategic rather than a peer benchmark for the numbers to be consistent » Old Mutual Investment Group won Best Sustainable African Investment Manager 2023 for the second year running at the European Global Business Awards » Old Mutual Investment Group won the Capital Finance International Responsible Investing Award for Best ESG Responsible Investor (Africa) 2023 for the third consecutive year, underlining our credentials as a leader in responsible investment » Old Mutual Global Islamic Equity Fund was recognised for its outstanding performance at the Citywire South Africa Awards in the global equity category » Investment Manager of the Year at MENA 2023 by PAN Finance » Best Fund Manager: Global Equity in the CityWire South Africa Fund Manager Awards » Old Mutual Investment Group won Most Watched Company (Overall) at the inaugural Asset TV Audience Choice Awards » Old Mutual Wealth was part of the group that won the Most Watched DFM Sessions at the inaugural Asset TV Audience Choice Awards Key activities 2024 » Maintain black ownership above 50%, with a transformed and inclusive senior investment team with a large female representation » Raise the profile of Old Mutual Investment Group as a locally based manager with excellent global capabilities » Increase collaboration with Old Mutual Wealth and Old Mutual Multi-Manager in building a retail ‘investment shop window’ » Develop an alternative balance sheet for Old Mutual Specialised Finance to leverage existing capability to drive additional revenue growth » Continue embedding culture and development initiatives in each affiliate 92 Integrated Report 2023 Old Mutual Investments continued Financial performance overview Rm (unless otherwise stated) FY 2023 FY 2022 Change Results from operations Gross flows Net client cash flow Assets under management (Rbn)1 Funds under management Intergroup assets Total revenue Annuity Non-annuity 1 227 32 815 (11 976) 839.1 258.1 581.0 3 374 2 945 429 1 240 31 952 (7 723) 774.0 240.2 533.8 3 302 2 787 515 (1%) 3% (55%) 8% 7% 9% 2% 6% (17%) 1 Assets under management comprise of funds under management as defined for the Group and funds managed on behalf of other entities in the Group, which are reported as funds under management of these respective segments Our results benefited from substantial new capital being raised, which supported the solid growth in annuity revenue. Assets under management grew by 8% from December 2022 due to resilient local equity markets, favourable valuations on portfolio assets and growth in offshore asset values that were supported by a weaker local currency. Annuity revenue, in the form of management fees, commitment fees and catch-up fees, benefited from exceptional levels of capital raised in our Alternatives business over the past few years, as well as exchange rate gains on our offshore assets under management. Non-annuity revenue is a major differentiator from our peer group. This revenue is more volatile but provides significant economic value through the investment cycle. The components include carried interest, revaluation of fund co-investments, performance fees and mark to market impacts from changes to credit spreads and equity exposures. Non-annuity revenue declined by 17% from the prior year, mainly due to negative market movements on the credit portfolio and equity exposures in our Specialised Finance business, partly offset by strong performance fees and investment returns in our Alternatives business. Gross flows improved by 3% to R32 815 million due to higher inflows across our money market, fixed income and alternative products. Negative net client cash flow of R11 976 million was mainly driven by low margin indexation outflows from a large offshore investor that implemented a change in investment strategy from the existing mandate resulting in outflows of R7.8 billion. Furthermore, client liquidity requirements in challenging economic conditions resulted in outflows from low margin money market funds, structural outflows given the ongoing strain in the South African pension fund market, as well as contractual benefit payments. Net client cash flow excluding the termination associated with client restructures and the contractual benefit payments was marginally positive and R2 billion higher than the prior year on a like-for-like basis. Results from operations marginally declined from the prior year. Higher annuity revenue was offset by the decrease in non-annuity revenue and higher expenses. Expenses were up as a result of vacancies filled, investment in revenue-generating initiatives, technology and increased travel costs. Asset Management Results from operations were slightly down, largely due to the decrease in non-annuity revenue from reduced performance fees and lower than inflation expense growth. Gross flows were higher than the prior year due to strong flows into money market, fixed income and property products. However, expected Liability Driven Investments benefit payments of R4.4 billion, continued client liquidity requirements and terminations related to client restructures contributed to the negative net client cash flow of R13.1 billion. Alternatives Capital raising continued strongly into 2023, with R14.7 billion of capital raised including a substantial portion from third-party investors. This highlights the benefits of our Private Markets initiative and the strategy to compete in the third-party institutional market. Similarly, deal flow remains strong, and we concluded new deals of R16.5 billion during the year. Annuity revenue was higher due to growth in our assets under management benefiting from capital raised in recent years, exchange rate gains and increased fees due to higher valuations. Non-annuity revenue was significantly higher due to strong performance fees and higher investment returns. This resulted in a 78% increase in results from operations. Specialised Finance The business delivered well against its asset and liability management mandate in a challenging environment. Specialised Finance continues to deliver stable hedging positions to reduce volatility for the shareholder. Balance sheet growth from deal volume originated was partly offset by active risk management that successfully reduced exposures to state owned enterprises, resulting in the committed term credit balance sheet growing by 3% to R36.4 billion. Results from operations declined to R153 million due to mark to market losses in the equity and credit portfolios and a mark to market accounting reversal on the settlement of three unlisted preference share instruments. This was partly offset by higher portfolio margins and lower expenses. 93 Integrated Report 2023 Old Mutual Corporate Old Mutual Corporate is a leading player in the employee benefits industry with diversified revenue streams, including pre-retirement and post-retirement propositions, employee benefits administration and specialised solutions for small, medium and large enterprises. Old Mutual Corporate provides employee benefits and consulting services, including pre-retirement and post-retirement investments, group risk cover, administration, consulting services and specialised solutions. Our business-to-business-to-customer model spans small, medium and large enterprises. Our customers include employers, retirement funds, as well as other benefit funds and their members and employees. Our member-focused propositions help members maximise their personal asset accumulation and achieve a stable retirement income. We offer solutions to protect them against health and financial risks that could arise over their working lifetime and impede their asset accumulation goals. Our holistic suite of offerings comprises: » Superfund, one of the largest commercial umbrella funds in South Africa with pricing competitiveness through our economies of scale » Smoothed bonus funds that provide market-leading investment strategy solutions to ensure employees can have downside risk protection for their retirement savings against the different economic cycles while holding growth assets with different options for guarantees of the total savings at retirement or exit » Group risk offerings with a wide range of risk protection benefits for death and disability » Advisory capabilities through Old Mutual Corporate consultants that cover employee benefits, investment and actuarial consulting; we added remuneration consulting, including reward surveys, benchmarking and a reward management platform through our Remchannel » Health and wellness solutions that provide access to primary health care and wellness offerings that address mental, physical, and financial wellbeing » Small and medium-sized enterprise offerings, such as lending and operations support services through SMEgo, our digital platform, which aims to grow and mature SMEs so that they drive employment and strengthen the market for employee benefits in the long term The segment has a multi-channel strategy that is largely face-to-face in the employee benefits market. Our distribution network includes a direct sales team, business development teams and digital channels, complemented by employee benefits specialist intermediaries and industry consultants. Our direct sales team provides services to clients directly and we have an advice-led corporate consulting team. The employee benefits market is highly intermediated, and we go to market via tied and third-party intermediaries, largely comprising employee benefits specialist intermediaries. s r o t a i t n e r e f f i y e K D 1 2 3 4 Integrated employer and employee-focused propositions and services Strong brand and established track record Expertise in management and governance of umbrella funds Capital strength mostly valued by large corporate clients Operating context The challenging macroeconomic conditions and unemployment levels continued to impact Old Mutual Corporate and the employee benefits industry in 2023 by suppressing business confidence and employment growth, and constraining businesses to provide employee benefits and consumers to save. The regulatory landscape continues to evolve, and we actively participate in industry engagements, which included providing thought leadership on the two-pot retirement system implementation. We invested in technological and system capabilities to enable us to provide the services required, and we intensified member education and engagements. Material matters: We responded to this environment by evolving our strategic focus to strengthen our core employee benefits retirement proposition and servicing capability, especially reducing the claims backlog created during the COVID-19 pandemic. We continued to extend and diversify our core business by growing our remuneration consulting business and launching new health solutions. Our small and medium-sized enterprise strategic focus was to increase our lending book by extending funding to small businesses and expanding the features of SMEgo, our digital capability, to support them operationally. Operational metrics 1.8 million customers 2022: 1.8 million 1 296 independent intermediaries 2022: 1 224 320 employees 2022: 308 94 Integrated Report 2023 Old Mutual Corporate continued Strategic focus areas Holistic coverage of customer needs The focus on improving the quality of our employee benefits propositions and relationships has seen large deals won and strong pipelines secured for our SuperFund Umbrella and Group risk businesses. The Old Mutual SuperFund emphasises sustainability, stewardship and responsible investment practices as essential long-term value driver levers and an integral aspect of our commitment to customers as a responsible business. The Remchannel acquisition yielded results that surpassed expectations. We further strengthened this remuneration consulting capability by adding an industry-leading executive remuneration advisory team. Through product innovation, we have made progress on strengthening our post-retirement proposition, while expanding the value-for-money options members can get in the fund. Our member-focused new solutions include earned wage access and debt management solutions. Earned wage access affords customers early access to their earned salary instead of accumulating debt. Debt management solutions include access to debt counsellors to improve members’ cash flow and address indebtedness. We fleshed out our wellness proposition with partnerships in physical and financial wellness. Aligned to this, we meet members' needs for affordable primary health care with a corporate health insurance solution for clients, in partnership with Old Mutual Insure through Genric. We are preparing to implement the two-pot retirement system despite the technical complexity, regulatory uncertainty and shifting timelines. The related data and digital implementations, coupled with robust change management, will also benefit the quality of our servicing and customer engagement. Distribution and digital engagement Our journey to improve the omni-channel experience is progressing well due to back-end enhancements through digitisation and ongoing automation of claims processing. We continually improve our front-end functionality through multiple self-service digital channels such as WhatsApp, the MyOldMutual app, dedicated websites and our call centres in collaboration with our strong member and customer support teams. SMEgo is our website and app digital channel through which SMEs can register and access lending options and capabilities that assist with efficiently managing their operations, such as invoicing, automated payments and an e-market that connects SMEs with each other and customers. Since the launch of SMEgo in August 2022, the platform has grown from 2 283 users at the end of 2022 to 6 754 at the end of 2023, and gross funding application increased to R1.3 billion. We are accelerating the build of additional features in SMEgo 3.0 to drive scale and profitability. Operational efficiencies We gained traction on addressing the servicing issues, specifically around section 37c death claims backlog arising during the COVID-19 pandemic. We expect to meet the backlog commitment to the Financial Sector Conduct Authority for May 2024 and are tracking ahead against the agreed targets. There has been a strong improvement in the withdrawal and retirement claims process as a result of the funeral claims process re-engineering. This was reflected in the feedback from our annual client satisfaction survey, with an overall improvement in satisfaction and experience from intermediaries and employers. The two-pot retirement system requires a focus on readiness for its implementation. We are preparing the relevant technology and processes to ensure efficient servicing, given the anticipated claims volumes, and a positive experience for members. A key aspect of achieving this experience is the accuracy of members' contact details to support member engagement and digital claims servicing. Our focused data remediation efforts have seen significant improvement in this regard. Agile delivery driven by engaged employees We organised and enabled our business units to deliver effectively through agile teams, practices and governances across the corporate value chain, supported by cohesive culture building with employee interventions that address employee needs in a post pandemic and hybrid work environment. Our segment’s Pulse Culture Survey results had a 90% response rate, and our Culture Index Score was above the Old Mutual Limited Group average. We scored well on inclusive leadership, trust and accountability, and diversity and inclusion. We have action plans to improve the scoring on execution and delivery, employee engagement and service culture. Value creation Customers » R37.2 billion (2022: R41.5 billion) in claims and benefits paid » 72% customer satisfaction score » SMEgo gross funding application grew by R2 billion Intermediaries » R274 669 (2022: R1.7 million) spent on intermediary training and development Trade-off With almost 250 000 members potentially claiming from their savings pot, the focus on two-pot retirement system readiness means people, technology and funding resources were diverted to and focused on meeting the requirements for the initially expected effective date of 1 September 2024. The two-pot retirement system digital, data and process re- engineering deliveries will benefit the customer experience and operational efficiencies in the longer run. Other major deliverables in product enhancements and servicing infrastructure were re-phased to accommodate this priority. In the SME business, we re-prioritised deliveries by accelerating the build of additional features in SMEgo that will drive further growth, usage, and revenue generation over focusing on market development upfront. This was based on customer feedback on the platform. The trade-off was delaying extensive digital marketing campaigns and attaining planned traction in client take-up, which is now a key focus for 2024. Awards » Old Mutual received Impact Asset Owner of the Year in Southern Africa at the inaugural Krutham Africa Impact Investment Awards 2023 Key activities 2024 The key activities in 2024 are a continuation of our existing strategy while incorporating learnings from 2023: » Gain traction and drive growth and scale, particularly in the solutions introduced in 2023 » Continue to strengthen the core employee benefits business through investing in our pre- and post-retirement solutions, group risk, advisory and administration and servicing capabilities » Complete the preparations for the two-pot system implementation » Continue to expand our core employee benefits business by leveraging our enhanced remuneration consulting capability and scaling our member-centred health and wellness propositions » Grow the SME proposition with non-employee benefits offerings, focusing on lending through our partner, Preference Capital, and scaling our operations and market access services via the SMEgo digital platform 95 Integrated Report 2023 Old Mutual Corporate continued Financial performance overview Rm (unless otherwise stated) Results from operations Gross flows Life APE sales Net client cash flow Funds under management (Rbn) Value of new business Value of new business margin (%) FY 2023 FY 2022 Change 1 718 37 744 3 190 (3 587) 282.9 272 1.0% 1 449 27 883 1 900 (11 709) 261.3 147 1.0% 19% 35% 68% 69% 8% 85% – Gross flows increased by 35% to R37 744 million due to improved recurring premium flows attributed to increased contributions from customers in Old Mutual SuperFund and strong single premium flows in our investment portfolio. The positive persistency also contributed to the growth in gross flows. Life APE sales increased by 68% to R3 190 million. This was driven by single and recurring premium savings book growth. Large corporate sales are lumpy by nature with long and sometimes unpredictable lead times. We are also pleased with the good risk new business secured over the year, given the competitive market. The value of new business increased by 85% to R272 million, with a corresponding value of new business margin of 1.0%, which was sustained from the prior year and remains a competitive margin within the employee benefits market. The value of new business and value of new business margin were driven by the new business secured over the period and a favourable product mix within our annuity and risk offerings. Net client cash flow improved by 69% from the prior year, bolstered by higher gross flows and lower outflows. Termination outflows improved from R6.5 billion in 2022 to R6.4 billion in the current year as a result of management interventions. The terminations in the current year included a R1.8 billion outflow from the closure of a bespoke product in the Old Mutual Multi-manager platform. Total funds under management improved by 8% to R282.9 billion, driven by strong flows, improved retention and strong investment performance over the period. A component of the funds under management relates to our flagship smoothed bonus funds which performed well in an incredibly volatile market environment. This smoothing allowed our customers to experience reduced volatility in a tough market while building their retirement savings through consistent real returns. Results from operations increased by 19% to R1 718 million. This performance was driven by higher returns on the contractual service margin and better mortality underwriting experience, with prudent expense management contributing positively to profits. 96 Integrated Report 2023 Old Mutual Insure Old Mutual Insure offers a comprehensive range of short-term insurance products to the personal, commercial and corporate markets that help customers manage and mitigate their risks, enabling them to protect their financial wellbeing. Through multi-channel distribution networks and partnerships, we offer a wide range of policies that protect against property damage, personal accident, agriculture, engineering, liability, marine, motor, accident and health, travel, credit protection and trade credit risks. We deliver our solutions through the following businesses that provide tailored products that meet our customers’ needs: » Retail offers a multi-product and multi-channel distribution portfolio and includes the commercial business portfolios catering to small to large-sized businesses, and personal business portfolios that serve individuals » iWYZE offers direct short-term, gap cover and business insurance » Specialty provides insurance for large and complex risks in niche market segments, particularly property, engineering, marine, agricultural assets and corporate property insurance » OMART Insure offers first and third-party cell captive and alternative risk solutions » Blue Sky is the strategic acquisitions division of non-life insurance providers, including Genric, specialising in accident and health insurance, and ONE Financial Services, operating as a cell owner within the cell captive environment » Credit Guarantee Insurance Corporation provides insurance for trade credit, bonds and surety Old Mutual Insure uses multiple distribution channels that include intermediaries, direct channels, strategic partnerships and digital channels. Intermediaries include independent brokers who are equipped to deliver personal advice and service to new and existing customers. We have a physical branch network and call centres where our tied advisers provide advice and customer servicing. Digital channels include the digital broker portal, MyOMinsure, which enables brokers to service customers digitally. Through our strategic partnerships, we underwrite new business to new customer demographics. y e K s r o t a i t n e r e f f i d 1 2 3 4 A recognisable and dependable brand Diversified short-term insurer with a broad range of insurance solutions Specialist insurance skills and experience that support and bring innovation to corporate and niche markets Credit Guarantee Insurance Corporation is a market leader in trade credit with an experienced management team and a strong brand Operating context The business faces threats, including increased broker market consolidation, direct competitors with aggressive marketing strategies and non-traditional businesses diversifying into insurance. Challenging socio-economic conditions, such as high inflation, continue to put pressure on our claims costs and place consumers under strain, adversely impacting our ability to retain existing customers and attract new business. The increased severity of weather-related events continue to put pressure on our profitability due to the high value of claims pay-outs and higher reinsurance pricing. Our strategic objectives provide direction, creating a buffer to help us weather the challenging operating context. Topline growth was driven by diversifying our products, strengthening of our Material matters: broker market, strong strategic partnerships and new business acquisitions. We strive to leverage off existing technology and data capabilities to help us manage our expenses and claims processes. We continually monitor weather events, stress test our catastrophe models and rely on advanced analytics and technology to understand and assess the impact on pricing and reserving. We anticipate that the ongoing socio-economic challenges will remain. The increased frequency and severity of extreme weather events are particularly challenging for the industry. However, our business remains strong and agile to face these challenges. We are working to improve our claims process, refine policy wording, upgrade our IT infrastructure to enhance our customer and broker experience, and review product and reinsurance pricing. Operational metrics 483 913 policies 2022: 471 877 5 148 tied advisers 2022: 4 750 2 958 independent brokers 2022: 1 843 2 725 employees 2022: 2 590 97 Integrated Report 2023 Old Mutual Insure continued Strategic focus areas Holistic coverage of customer needs We are committed to growing coverage of customer needs by diversifying our product offerings and channels, while strengthening and growing our existing businesses. We furthered the expansion of our alternative channel within the retail business, establishing customer centric engagement models. This initiative is designed to foster the growth and fortification of our tied distribution network, ensuring direct and personalised access to our customers. The channel reported growth compared to the prior period, a result of the efforts of our sales teams. We fully integrated the ONE Financial Services and Genric Insurance businesses, growing our specialised/niche businesses and increasing our share of the credit protection, transport, engineering, marine and liability markets. Specialty launched a renewable energy product that provides project cover for transporting renewable energy equipment, the construction phase of the project, and losses due to business interruption and liability exposures. Distribution and digital engagement To grow our distribution and digital engagement, we focused on leveraging existing technology capabilities, using the Old Mutual Group ecosystem, consolidating our broker market share and building new partnerships while enhancing existing ones to drive growth. We continued to refine and enhance our MyOMinsure platform, ensuring that it remains easy to use and convenient for our brokers., Genric partnered with Old Mutual Corporate to underwrite and administer the recently launched Old Mutual Health Solutions. This employee benefit offering is designed for low-income workers, and provides access to affordable health insurance that includes access to healthcare practitioners, private hospitals and gap cover. We are growing our share of the broker market by partnering with a black- owned intermediary group in commercial short-term insurance, further building on our BEE enterprise development strategy. We maintained our partnership with Pineapple, an independent insurance agency that offers instant, affordable and online insurance. We continued to improve iWYZE hub’s usability, a digital self-service platform that enables customers to manage their policies, update their details, download policy documents, confirm insurance cover and perform vehicle inspections. Operational efficiencies To improve operational efficiencies, we leverage data and technology by enhancing expense management, and automating and digitising the claims process. Our overall cost saving initiatives have been strained due to increased investment in IT infrastructure, cloud migration, of our core platforms and the implementation of new technology platforms, which included a customer relationship management platform. While these investments reduced our savings capability, we expect increased benefits in our financial reporting, customer servicing and reinsurance processes that rely on these IT systems. We migrated our core platforms to the cloud, which will help us optimise costs and efficiencies. We enhanced our use of advanced analytics to analyse customer activities and preferences, which is expected to create cross-sell opportunities and improve our relevance to customers and retention levels. Value creation Customers » R7.5 billion (2022: R5.1 billion) in claims paid » Established a customer experience academy that upskills client-facing roles to improve service levels Intermediaries » R1.1 million (2022: R238 740) spent on intermediary training and development Communities » Implemented initiatives to improve our B-BBEE scorecard » Through our Mutual and Federal Community Trust, we invested in a community food garden and water management system » Our Mutual and Federal Community Trust and the Mutual and Federal Development Trust sponsored a SETA accredited programme that offers art, entrepreneurship and robotics, and Internet of Things skills development » Partnered with World Wide Fund for Nature to focus on biodiversity restoration in Ceres Regulatory » We maintained our B-BBEE level 1 rating Trade-off In response to external factors such as prolonged load shedding, power surges and the potential national grid failure, we reviewed and updated insurance policy wording in some of our portfolios. We believe our response is appropriate to the risk environment where claims related to the electricity crisis have increased. These updates are expected to have some negative impact as some customers might elect to move to competitors. We continued to focus on enhancing the synergies between our businesses, aligning our insurance licences to unlock reinsurance and other opportunities that benefit more than one business within our Group. Key activities 2024 We enhanced our claims complaints process using our technology platforms to capture and resolve lower-level claims complaints at first point of contact in the business, thereby creating process efficiencies and expanding our employee capacity which will improve customer experience. We focus on catastrophe modelling, refining our data analytics outputs, and stress testing our models to better understand the impact of weather-related events and creating customised responses. Agile delivery driven by engaged employees We implemented a new junior management development programme to further upskill our employees. 58 employees joined the programme, of which 53 were black. We delivered bespoke women’s development programmes to improve our leadership succession initiatives. During the year, 46 female employees attended the SheThrives and SheAspires development programmes. We hosted the Insuring Happiness Conference with wellness programmes supporting mental, emotional, financial, social, physical, and spiritual wellbeing. We implemented a comprehensive action plan addressing five Pulse Culture Survey focus areas with a key focus on improving employee engagement. We launched the actuarial apprenticeship programme to support black students pursuing actuarial qualifications. We furthered our investment in employee education by increasing employee study bursaries by 39% to R5.9 million. Employees predominantly chose studies that enhanced their insurance expertise and future-fit skill sets. We established the iWYZE unemployed youth call centre in Hazyview, Mpumalanga. This initiative contributes to rural development and provides job opportunities for the youth. » Maintain focus on strategic pillars to remediate underperforming areas and drive growth across our businesses » Continue to leverage technology to automate the claims process, improve customer experience and reduce the cost of claims » Embed our climate change strategy and climate short-term weather forecasting models to improve our understanding of and response to weather patterns and events » Continue to focus on unlocking capital and ongoing balance sheet optimisation initiatives » Deliver the first iteration of a people centric employee value proposition, designed in partnership with The Performance Agency » Finalise our information technology plan to focus on realising efficiencies from new technology investments » Focus on additional pipeline development and key opportunities, which include growing our offering and market share in under indexed insurance classes 98 Integrated Report 2023 Old Mutual Insure continued Financial performance overview Rm (unless otherwise stated) FY 2023 FY 2022 Change Gross written premiums Insurance revenue Net insurance revenue Net underwriting result Results from operations Net underwriting margin (%) Insurance margin (%) Rm Retail1 iWYZE Specialty1 Credit Guarantee Insurance Corporation Blue Sky2 Insurance service result Non-attributable expenses Net underwriting result Investment return on insurance funds Finance income and expenses from insurance and reinsurance contracts Other income and expenses Results from operations 20 196 19 846 16 098 46 524 0.3% 3.3% 17 190 17 314 14 213 602 678 4.2% 4.8% FY 2023 FY 2022 (63) (3) 21 354 266 575 (529) 46 525 (102) 55 524 92 148 258 550 19 1 067 (465) 602 300 (57) (167) 678 17% 15% 13% (92%) (23%) (390 bps) (150 bps) Change (>100%) (>100%) (92%) (36%) >100% (46%) (14%) (92%) 75% (79%) >100% (23%) 1 Premier was transferred from Retail to Specialty, to better align with how the portfolio is managed which resulted in a re-presentation of comparative numbers 2 Blue Sky is the investment portfolio that includes Genric Insurance Company, ONE Financial Services, Primak Insurance Brokers and Versma Management Services Excluding Genric Insurance Company, which contributed R823 million, gross written premiums increased by 13% to R19 373 million due to strong new business growth, renewals and average premium increases. Insurance service result decreased by 46% to R575 million, largely due to the significant increase in the net cost of reinsurance, higher insurance service expenses and a once-off impairment of irrecoverable assets in iWYZE. Our businesses experienced an increase in reinsurance costs and lower reinsurance claims recoveries compared to the large business interruption and weather-related catastrophe claims recovered in 2022. The increase in insurance service expenses was largely driven by high claims inflation, adverse weather and corporate property damage claims as well as an increase in commissions paid to our intermediaries which was mainly attributed to strong new business flows. Net underwriting result significantly decreased by 92% to R46 million due to an overall decline in insurance results and an increase in non-attributable expenses. Expense growth was mainly due to the inclusion of Genric Insurance Company for the first time, an increase in project costs incurred to enhance our existing IT infrastructure and the implementation of new technology platforms across several of our business units. This led to a net underwriting margin of 0.3%, below the long term target range of 4% to 6%. Results from operations decreased by 23% to R524 million, mainly driven by lower net underwriting result. This was partially offset by strong growth in investment returns on insurance funds given the high interest rate environment and fair value gains driven by positive performance of equity markets as well as income from our non-underwriting activities. Retail Retail includes the Commercial and Personal business portfolios. The Commercial business portfolio serves small to large sized enterprises by providing commercial insurance solutions tailored to the needs of entrepreneurs and businesses. The Personal business portfolio offers a multi-product and multichannel distribution portfolio that provides private individuals with cover through a wide range of products. The Retail business reported 8% growth in gross written premiums. This was mainly driven by premium increases in personal product lines to keep pace with inflationary trends and the risk environment as well as strong sales to the high net worth market segment in the Elite portfolio. Insurance service result decreased from a profit of R92 million in 2022 to a loss of R63 million. The business was impacted by large weather-related claims from the Western Cape floods and Gauteng hailstorms. Furthermore, higher claims inflation on spare parts, labour and building costs as well as higher IT infrastructure costs were reported, contributing to the negative insurance service result. Various initiatives were implemented to improve underwriting performance and return to profitability. This included refining of policy wording, appropriate excess structures and enhancement of the motor assessment model and recoveries. iWYZE The iWYZE business offers short-term, gap cover and business insurance through a direct distribution model. iWYZE reported 9% growth in gross written premiums, benefiting from strong policy renewals and an increase in average premium rates. Insurance service result deteriorated to a R3 million loss compared to R148 million profit in the prior year. This was mainly due to a balance sheet review conducted that resulted in the once-off write off of certain items deemed irrecoverable. iWYZE’s results were further impacted by the increase in technology costs and lead generating expenses, coupled with a higher loss ratio compared to the prior year. 99 Integrated Report 2023 Old Mutual Insure continued Specialty The Specialty business portfolio focuses on the insurance of large and complex risks in niche market segments, particularly corporate property, engineering and marine. It also offers first and third-party cell captive as well as alternative risk solutions. Premier delivers tailor-made products for the commercial market segment and complements the type of technical underwriting and improved risk management used in the Specialty business for complex and bespoke customer needs. In Specialty, gross written premiums increased by 21%, supported by strong new business and higher renewal rates in the corporate property, engineering, marine and public sector portfolios. Insurance service result declined by 92% to R21 million, largely driven by the decrease in reinsurance claims recoveries compared to the prior year. We plan on reviewing and redesigning the Specialty reinsurance programme during the year, to better manage risk retention and net underwriting results. The business was also not immune to weather-related claims particularly from the Western Cape flooding and Gauteng hailstorms, coupled with large corporate property damage claims. Higher IT-related expenses and an increase in commission paid to intermediaries contributed to the decrease in insurance service result. Various initiatives implemented to improve underwriting performance include the launch of a renewable energy product, building strategic relationships, seeking opportunities to diversify our product lines particularly in the marine and engineering portfolios, as well as utilising digital tools and technology platforms to improve the reinsurance, agency management and claims processes. Credit Guarantee Insurance Corporation Credit Guarantee Insurance Corporation’s main business is trade credit insurance in the domestic and export trade credit insurance market. The business reported a 5% increase in gross written premiums reflecting some slowdown on the prior year inflationary trends in the business environment following the central bank interventions. Insurance service result decreased by 36% to R354 million, mainly due to an increase in claims paid as challenging economic conditions continued to directly impact our policyholders and their insured turnover levels. Credit Guarantee Corporation’s loss ratios continue to rise to normalised levels with the economy now fully reopened. Results were further impacted by higher project and operating expenses incurred to improve business processes and efficiencies through the investment in IT infrastructure. Blue Sky Blue Sky is the strategic acquisitions division in which we report the results of our acquired subsidiaries. This includes Genric Insurance Company, a diversified non-life insurer that focuses mainly on accident and health insurance together with other niche classes of insurance, as well as ONE Financial Services Holdings Proprietary Limited, a South African non-life insurance service provider and a cell owner within the cell captive environment. Primak Insurance Brokers provides intermediary services in the non-life insurance space. Versma Management Services provides customisable, end-to-end business processing services that are tailored to insurance brokers. Insurance service result significantly increased to R266 million, mainly due to the R86 million contribution from Genric Insurance Company and the strong recovery in ONE Financial Services’ heavy commercial vehicle book, supported by various remediation actions taken to improve the business performance. 100 Integrated Report 2023 Old Mutual Africa Regions Old Mutual Africa Regions has a presence in 12 countries spanning across Southern, East and West Africa. We hold leading market share positions in most of our markets in Southern Africa. To further strengthen our presence in East and West Africa, we are actively pursuing strategic partnerships and capitalising on our product capabilities to penetrate our target markets. Our comprehensive range of services includes Life and Savings, Asset Management, Banking and Lending (including micro-lending) and Property and Casualty (including medical insurance). We cater to the needs of retail customers, small and medium-sized enterprises and, corporate and institutional customers. Our extensive distribution network encompasses physical branches, independent agents, brokers, digital channels, strategic partnerships with banks and limited digital and telesales distribution capabilities to maximise our accessibility to our customers. y e K s r o t a i t n e r e f f i d 1 2 3 4 Strong brand recognition in Namibia, Malawi, Zimbabwe and Kenya Leading Life and Savings offerings across Southern Africa Leading medical solutions in East Africa Strong distribution capabilities Operating context Despite facing challenges such as high inflation, increasing unemployment and exchange rate fluctuations, the operating environment remained robust, as indicated by the resilient growth observed in most of our markets. Except for South Sudan, all countries in our region recorded a positive GDP growth in 2023, with an average growth rate of 4.79%. We anticipate persisting inflation in some markets, attributed to external factors such as escalating energy prices and global conflicts impacting supply chains. However, markets in East Africa are expected to stabilise. Despite tight monetary policy, future rate hikes are not expected from most central banks. Southern and West Africa are projected to experience modest economic growth despite prevailing headwinds. We expect East Africa to outperform other regions, primarily due to growth in the services sectors, including tourism and entertainment. Nevertheless, growing public debt becomes a concern due to the reliance on costly market Material matters: based financing and the reduced allocation of aid budgets in the long run. This poses a risk to economic growth as governments turn to domestic funding methods, which might involve tax hikes. With eight of our 12 markets scheduled to hold national general elections within the next three years, there is potential for heightened anxiety among our customer base, which could impact the business operating environment. Our focus is to maintain our impressive track record of achieving outstanding results. We are committed to capitalising on growth opportunities by expanding our product range and improving our distribution strategy. This will enable us to reach a larger customer base faster and more efficiently. Operational metrics 5.9 million customers 2022: 5.3 million 2 175 tied advisers 2022: 3 124 5 068 employees 2022: 4 836 175 Old Mutual branded branches 2022: 202 101 Integrated Report 2023 Old Mutual Africa Regions continued Strategic focus areas Holistic coverage of customer needs We are driving an integrated financial services approach with a focus on cross-selling through integrated offerings in markets where we have a broad offering including Zimbabwe, Namibia, Malawi and Kenya. We successfully launched Old Mutual Rewards in Namibia on the website and the mobile app and United States dollar unit trust funds in Uganda and Kenya. In Zimbabwe, we launched an innovative fintech solution called O’mari, which has delivered strong customer growth and higher-than-anticipated average revenue per user. The O’mari platform offers mobile money services, insurtech, investech, digital lending, e-commence, payments and digital products and services for the retail mass market. Our alternative investment’s funds under management have experienced noticeable growth. Value creation Customers » Introduced US dollar based options in some products to protect value from customers » R6.3 billion (2022: R5.6 billion) in claims and benefits paid » R3 billion (2022: R3.5 billion) in responsible lending to customers Intermediaries » R3.7 million (2022: R2.4 million) spent on intermediary training and development Distribution and digital engagement We are expanding our digital engagement with customers by rolling out mobile, secure web and WhatsApp platforms across our markets. We are seeking strategic and innovative partnerships to strengthen our market position by enhancing our offerings and introducing new distribution models to reach new customers. In Malawi, we forged a significant partnership with Airtel to launch the Phuka Digital Savings platform, offering a user-friendly mobile solution that simplifies the savings process. Operational efficiencies In East Africa, we successfully reduced the business debt, providing the business with a greater opportunity to allocate resources towards growth investments. Following the implementation of management actions, we achieved strong margin improvements in our Property and Casualty line of business driven by improved revenue growth, pricing, credit control, reinsurance governance and claims recoveries. Strategic growth markets Old Mutual Ghana marked its 10th anniversary this year, underscoring our dedication to the market and optimism about its potential, even amid challenging conditions. Life APE sales are performing well, driven by corporate sales in East and West Africa in line with the pivot to corporate strategy. Gross written premiums and digital sales showed strong growth. Growth in loans and advances was muted, mostly due to tighter credit risk management in a tough operating environment. We made progress in fixing and turning around underperforming entities and are on track to deliver 90% profitable entities by the end of 2024. In West Africa, we are driving growth by broadening our offering and pursuing innovative distribution approaches to deliver our offering to more customers timeously. Agile delivery driven by engaged employees The key human capital focus was on strengthening our talent pools and leadership succession. We ensured adequate capacity for key functions, accelerated the development, acquisition and retention of critical talent and skills. We also leveraged diversity across the portfolio, including increasing the representation of women in leadership roles. Underpinning this were efforts to shape and nurture a healthy culture as a key enabler for optimising employee engagement and morale. We maintained our Pulse Culture Survey results, which closely aligned to the previous survey, with small improvements or dips in certain markets seen intermittently. Efforts to improve and address specific areas arising from the surveys and debriefing continued during 2023. The relative stability of the results is a positive sign, given the challenges relating to business operations turnaround efforts and high levels of economic turbulence in many of our markets. We designed and piloted specific development programmes aimed at strengthening the competence of our people and leaders, and improved the quality of engagement with employees. Our annual talent review ensured robust identification of high-value talent, with corresponding actions to grow, engage and reward these individuals. Over 2023, we made significant investments in talent development programmes, coaching and mentoring for our high-value talent cohort, and retained more than 90% of this cohort. We improved the succession coverage slate for our senior leadership roles across the portfolio, resulting in promotions and leveraging cross-country assignments for this group. We reviewed the market competitiveness of pay and benefits to realign compensation and other elements of the employee value proposition. Trade-off We are investing in strengthening controls and improving the financial reporting capabilities, including compliance with IFRS 17, which do not directly lead to the growth of the business but provides greater visibility and a strong foundation for increased predictability of delivery. Awards » Best company offering sustainable financial education by the Reserve Bank of Malawi » Old Mutual Namibia’s Sustainable Economic and Empowerment Drive bestowed Corporate Social Investment of the Year by Namibia Premier Business Awards » Best Transformation and Change Strategy of the Year by Institute of Human Resources Management 2023 in East Africa » Responsible investment Award obtained by Old Mutual Ghana from the Sustainability and Social Investment Awards » Customer Service Excellence Award winner in the Life Insurance sector from the Chartered Institute of Customer Management in Botswana » Overall Insurance Company of the Year winner by The Zimbabwe Independent Insurance Awards Key activities 2024 » Broaden life, banking and alternative investment offerings in various markets » Drive profitable growth across all markets and lines of business » Improve distribution efficiencies and increase productivity 102 Integrated Report 2023 Old Mutual Africa Regions continued Financial performance overview Rm (unless otherwise stated) Results from operations1 Gross flows Life APE sales Net client cash flow Funds under management (Rbn) Value of new business Value of new business margin (%) Banking and Lending Loans and advances Net lending margin (%) Credit loss ratio (%) Property and Casualty Gross written premiums Insurance revenue Net underwriting margin (%) 1 Old Mutual Africa Regions results from operations include central regional expenses of R146 million (FY 2022: R189 million) FY 2023 1 116 33 713 1 548 8 351 112.4 157 2.8% FY 2022 535 25 109 1 215 3 840 110.0 133 2.2% 5 317 5 358 (0.4%) 5 154 4 768 (9.1%) 3 020 13.8% 0.5% 3 497 12.9% 0.7% Southern Africa Rm (unless otherwise stated) Results from operations Gross flows Life APE sales Net client cash flow Funds under management  (Rbn) Value of new business Value of new business margin (%) Banking and Lending Loans and advances Net lending margin (%) Credit loss ratio (%) Property and Casualty Gross written premiums Insurance revenue Net underwriting margin (%) FY 2023 1 212 16 284 865 2 878 72.2 127 3.4% 1 300 22.0% 0.4% 1 224 1 271 6.9% FY 2022 968 13 618 838 738 66.4 163 3.6% 1 281 18.2% 2.0% 1 087 1 016 0.8% Change >100% 34% 27% >100% 2% 18% 60 bps (14%) 90 bps (20 bps) 3% 12% 870 bps Change 25% 20% 3% >100% 9% (22%) (20 bps) 1% 380 bps 160 bps 13% 25% 610 bps Gross flows of R16 284 million grew by 20%, largely driven by high demand for offshore investments in Namibia. The strong gross flows resulted in significant improvements to net client cash flow. This was despite Malawi experiencing higher withdrawals due to the amendment of the Pensions Act, which enabled members to access their pension funds five years before retirement as well as increased claims following the liquidation and restructuring of a large scheme. Life APE sales increased by 3% to R865 million due to good corporate and retail sales in Namibia. The value of new business margin declined by 20 bps due to the retail product mix being weighted towards lower margin savings business. This was partially offset by improved retail protection margins due to profitable policies sold at lower acquisition costs. The roll out of the debit order product and momentum from sales initiatives in Namibia resulted in loans and advances marginally increasing to R1 300 million, which was partially offset by lower disbursements of personal loans due to the continued tightening of credit granting criteria. As a result, net lending margin increased by 380 bps to 22.0% as the quality of the loan book improved. Gross written premiums of R1 224 million increased by 13% driven by new business growth and strong renewals following a re-pricing of commercial and personal lines as well as good volumes sold in the specialised risk sector. The net underwriting margin increased by 610 bps to 6.9% driven by strong top line growth coupled with sound underwriting discipline. Results from operations increased by 25% to R1 212 million mainly due to the Life and Savings business in Malawi and good turnaround in Property and Casualty business in Namibia. Malawi’s performance was driven by increased fees earned on policyholder funds as a result of the rally in the local equity market, reflecting increased volatility which may result in returns reversing in future. Malawi’s group assurance business recorded good top line growth and improved claims experience. Property and Casualty results from operations increased due to good top line growth and better claims experience. In Banking and Lending, the increase in non-interest revenue and lower impairments following improved collections resulted in higher results from operations than the prior year. Asset Management results from operations increased due to higher fees earned from listed equity investments in Malawi. East Africa Rm (unless otherwise stated) Results from operations Gross flows Life APE sales Net client cash flow Funds under management (Rbn) Value of new business Value of new business margin (%) Banking and Lending Loans and advances Net lending margin (%) Credit loss ratio (%) Property and Casualty Gross written premiums Insurance revenue Net underwriting margin (%) FY 2023 66 16 772 502 5 190 38.6 29 1.9% 1 720 7.6% 0.5% 3 853 3 884 (3.2%) FY 2022 (141) 10 943 214 2 845 42.0 (8) (0.9%) 2 216 10.0% –% 3 822 3 510 (10.6%) Change >100% 53% >100% 82% (8%) >100% 280 bps (22%) (240 bps) 50 bps 1% 11% 740 bps Gross flows of R16 772 million were 53% higher than the prior year driven by new asset management mandates secured and asset transfers from large clients in Kenya. Furthermore, Uganda onboarded a large pension fund and recorded an increase in unit trust sales. The strong gross flows resulted in a significant increase of 82% in net client cash flow. 103 Integrated Report 2023 Old Mutual Africa Regions continued Life APE sales of R502 million were significantly higher than the prior year. This was driven by increased new business and renewals in Uganda’s corporate book coupled with growth of both the retail and corporate book in Kenya following recruitment of additional personnel and improved productivity. The value of new business and value of new business margin improved significantly due to a higher proportion of more profitable corporate sales. Loans and advances of R1 720 million were 22% lower than prior year due to the continued slowdown in disbursements resulting from the tightening of credit granting criteria to de-risk the portfolio away from poor performing segments, unfavourable economic conditions and continued buyoffs of the good loan book by competitors. The depreciation of the Kenyan shilling against the South African rand also contributed to the decrease in loans and advances. Gross written premiums of R3 853 million were marginally up due to improved sales in health and general insurance portfolios in Kenya as well as better underwriting practices across the region, despite the impacts of the depreciation of the Kenyan shilling. Insurance revenue grew by 11% to R3 884 million mainly due to higher corporate sales and high scheme retention. The significant turnaround in results from operations from a loss in the prior year to a profit of R66 million was mainly due to better underwriting results from the Property and Casualty business as well as improvements in the Life and Savings business. In our Life and Savings business, better mortality experience contributed positively to profits. In Property and Casualty business, better claims experience resulted in improved results from operations. In the health portfolio, improvements were largely driven by repricing and enhanced risk selection in Uganda and South Sudan, while the general insurance portfolio reported lower motor claims due to better claims management across the portfolio as well as repricing of the motor book in Kenya. As a result, net underwriting margin improved by 740 bps. The Asset Management business performed well due to increased unit trust fees as a result of strong inflows and higher brokerage commissions from fixed income trades in Uganda. The Banking and Lending business loss increased from the prior year due to decreased net interest income earned on a lower average loan book and the increased cost of funding leading to margin compression. West Africa Rm (unless otherwise stated) Results from operations Gross flows Life APE sales Net client cash flow Funds under management (Rbn) Value of new business Value of new business margin (%) Property and Casualty Gross written premiums Insurance revenue Net underwriting margin (%) FY 2023 (16) 657 181 283 1.6 1 0.3% 240 203 (33.9%) FY 2022 (103) 548 163 257 1.6 (22) (5.3%) 245 242 (28.5%) Change 84% 20% 11% 10% – >100% 560 bps (2%) (16%) (540 bps) Gross flows of R657 million were 20% higher than the prior year largely due to improved flows in Ghana driven by renewals and new business growth. Strong gross flows resulted in net client cash flow increasing by 10% to R283 million, partially offset by higher pension fund withdrawals in Ghana given the decline in the macroeconomic conditions. Life APE sales increased by 11% to R181 million due to high retail and corporate sales in Ghana as well as improved renewals, high conversion rate of new business and growth in retail in Nigeria. The value of new business margin improved by 560 bps due to higher proportion of more profitable corporate sales in Ghana. Gross written premiums of R240 million decreased by 2% due to the depreciation of the Ghanaian cedi and Nigerian naira against the South African rand. However, in local currency, gross written premiums were higher due to more business written as a result of an improved broker value proposition and the regulator increasing the minimum prescribed premium rates for the motor portfolio. The net underwriting margin was negatively impacted by the poor claims experience in the engineering and motor portfolios due to the increase in the cost of motor spare parts driven by the depreciation of the Nigerian naira against the US dollar. This was partially offset by the lower frequency of claims in the energy portfolio. Results from operations loss improved by 84% to R16 million. The Life and Savings business in Ghana recorded higher revenue from the corporate book, better mortality experience and lower expenses. The Property and Casualty business was profitable due to higher investment returns on United States dollar assets backing liabilities in Nigeria due to foreign exchange gains. 104 Integrated Report 2023 www.oldmutual.com

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