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
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u
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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
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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
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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
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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.
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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
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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.
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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
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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
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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
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Strategy
Risk management
Finance and audit
Actuarial
5
Information technology
Remuneration and
performance management
Sales and distribution
5
Responsible business
Listed corporates
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10
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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
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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
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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
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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
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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
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p
a
C
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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
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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
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p
O
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x
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s
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e
d
o
h
e
k
a
t
S
d
e
t
c
a
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m
i
s
k
s
i
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o
T
i
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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.
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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.
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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.
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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.
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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.
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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.
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Integrated Report 2023 www.oldmutual.com