Old Mutual earnings dive as new business is hard to find

OLD MUTUAL, the insurer listed jointly in the UK and South Africa, reported a bigger-than-expected drop in statutory profits yesterday, despite making improvements at its troubled US life business.

South Africa’s largest insurer said its earnings were boosted by investment returns from its US bond portfolio, offsetting weakness in Europe and South African arm Nedbank.

On a statutory basis, pre-tax profits at the group plummeted by 81 per cent in the first half of the year, down to £160m compared to £853m in the same period last year.

The firm blamed lower new business sales, increased levels of credit impairment in its banking arms and lower asset management profits for the loss. Gross written premiums were down 36 per cent to £1.82bn from £2.86bn a year ago.

Earnings at its US division were $398m (£234m) higher than the comparative period last year, at $388m, the group added.

Meanwhile, Old Mutual said it has appointed Patrick O’Sullivan, formerly a finance director of Zurich Financial Services, as its new chairman. O’Sullivan is replacing Chris Collins, who is set to retire from the firm at the end of this year.