New chief executive will replace former boss Peter Moyo, who was fired after a prolonged court battle
Old Mutual expects to announce its new chief executive soon |
SOUTH Africa’s second largest insurance company Old Mutual said yesterday that it expected to announce a new chief executive in the coming months after it fired its former boss Peter Moyo last year.
Old Mutual chief executive Iain Williamson said that the group stood by its decision to axe Moyo after it recorded lower results from its operations during the year ended December 2019.
“The board remains confident that the decision made was in the best interests of our stakeholders and that their duties were discharged in line with the high standard of governance and ethics expected of an established and respected organisation like ours,” said Williamson.
Old Mutual suspended Moyo over a conflict of interest and a breakdown in trust and confidence last May before axing him a month later.
Yesterday, Williamson said the group took the difficult decision after careful consideration of the relevant facts and actions.
Williamson made the announcement after the group flagged that it was likely to miss its 2020 growth target on global equity market jitters and pressure on gross domestic product (GDP) growth rates.
Williamson said that the group’s target of 2 percent plus nominal GDP depended on a turnaround in the South African economy and higher equity market levels.
“Over the medium term, we expect that meeting several of our most important targets will be challenging.
We will remain very closely focused on our operational results, digital enablement and exploiting opportunities for growth,” said Williamson.
The group said results from its operations fell 2 percent to R8.9 billion from R9.1bn in 2018, with the Old Mutual Insure recording a 65 percent decline to R233 million from R670m in 2018. It said the personal finance segment fell 14 percent to R1.7bn in 2019 from R2.02bn a year earlier.
Chief financial officer Casper Troskie said the decline was driven by lower inflows in most of its segments and heightened catastrophe losses in Old Mutual Insure.
“The weather-related catastrophes hurt us badly during the year,” said Troskie.
Old Mutual said its profit after tax attributable to equity holders of the parent fell 74 percent to R9.39bn from R36.57bn, reflecting the unbundling of the group’s 32 percent stake in Nedbank and the spin-off of Quilter, its wealth management business.
The group said the turnaround of the east of Africa market was hampered by a R40m loss due to poor claims and lower new business volumes. In West Africa, the group delivered strong results from operations growth.
Some of the highlights included the 5 percent increase in adjusted headline earnings to R9.8bn from R9.3bn in the prior year on the back of higher investment returns in South Africa. The group also achieved R1.2bn in cost savings, exceeding the target of R1bn.
Williamson said that the rapid spread of the virus since the start of 2020, and particularly in recent weeks, had caused significant disruption in global equity markets.
Old Mutual shares declined 15.19 percent on the JSE yesterday to close at R12.05.