OLD Mutual SA has been resilient through the recession, aided mainly by efficient cost management, investment in its people and paying close attention to the markets it services, says newly appointed CEO Kuseni Dlamini. Dlamini, who took over his post on September 1, and who was previously the head of Anglo American’s South African operation, said in an interview on Friday the recession was challenging, but the group had in the past traversed the Great Depression and many other downturns.
It had a “robust culture. We have got all that we require to weather the storm.” There was no large retrenchment in SA.
Dlamini also heads the group’s emerging markets expansion strategy, involving businesses in Africa, Latin America, China and India. He said there were similarities between SA and emerging markets where the group operated, such as a growing middle class and big income disparities.
There was also potential for Old Mutual to export its product development and distribution experience to these markets, as well as gain from the experience there, he said. In India, which Dlamini said was “too big and exciting a market not to be attractive to us”, Old Mutual held a 26% stake in a firm with partner Kotak Mahindra Life Insurance. It was awaiting India’s decision on financial reform so it could raise that stake to 49%.
There was a big market in India that was underserved with long-term savings products. It was a competitive market and included many of the world’s big financial institutions. “There are exciting prospects.”
Dlamini said China was similarly exciting. The group had gross premiums of £23m in China in the half-year to June, 22% more than a year before.
In Colombia, which appeared to have escaped the worst of the global recession, Old Mutual operated a business it got from its Skandia acquisition that had 7,5% of the voluntary pension market.
In Mexico, with more than 120- million people, a big underserved market and gross domestic product per capita of double that of SA’s, there were opportunities to serve markets other than the corporate segment where the group operated.
In Africa, the group operates in Namibia, Kenya, Malawi and Zimbabwe. Expansion into other countries such as Nigeria was being investigated.
Dlamini said the global economy was starting to emerge from recession. While the South African economy would recover in time, its economy lagged that of developed countries. “We were lucky we had a stimulus package in the 2010 World Cup” and in the capital expenditure programme.
The business sector had to stand “shoulder to shoulder” with the state to tackle economic challenges. Nedlac was a good consultative forum, but needed “more substance to it”.
He hoped Old Mutual would remain a leading company in SA, an employer of choice, trusted by clients and having a brand with wider appeal. “I want our people to wake up and feel like they own the company.”
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