When Iain Williamson took over as chief executive officer of Old Mutual four months ago, Africa’s largest insurer was being hammered from all sides.
The Cape Town-based financial-services firm was contending with the economic fallout of a strict lockdown to contain the spread of the coronavirus, a spike in claims, and tumultuous global capital markets.
Its reputation had been hurt by an acrimonious legal spat that saw Williamson’s predecessor suspended, locked out of his office and fired, twice. This after Old Mutual had already gained notoriety as the South African company that embarked on a global expansion by moving its headquarters to London in 1999, only to unwind it all and retreat home in 2018.
Now, the 50-year-old is adding flesh to a strategy refresh started with the board last year — even amid the tussle with ex-CEO Peter Moyo.
Williamson is seen as a safe pair of hands, having joined the group about 30 years ago and acting in the top post since May last year. In that time, five CEOs came and went.
Here are some highlights from a wide-ranging interview with Williamson to discuss topics from his transition into the role to dividend payouts:
South African market
- Part of Old Mutual’s plan involves selling a broader array of financial services to its 6 million customers in South Africa, where it makes 80% of its earnings. Local insurers and banks, including Sanlam and Standard Bank, are all fighting for clients to beat a recession in their home market.
- “In the South Africa market we still see quite a number of pockets of growth.”
- “There’s a big opportunity to utilise what we know from customers to provide a really meaningful, wider offering. There’s many that probably last bought something from us 10 or 20 years ago because of the nature of our businesses.”
- The insurer’s main battlegrounds for the next 10 years include more cost savings, expanding and defending market share in South Africa, turning around its operations in East Africa, and investing in technology.
- Business has improved each month since hitting their lows in April.
The 175-year-old firm is in talks with fintech players to create an ecosystem that will make it easier for customers to add more products.
It’s also working on taking its entire business digital, has already deployed 151 robots to cut processing times, and equipped advisers with the technology they need to function when they can’t physically meet clients.
The insurer has partnered with Amazon Web Services to modernise its technology, launched a fresh website and a new app.
“It’s been a strange transition” with the change from interim CEO to having the job permanently.
The announcement was made on a Friday and he officially started on the Monday, July 6. But nothing much had changed.
“All the meetings are the same, the diary is already set up in advance. Your time horizon does shift slightly in having confirmation it’s a longer-term appointment, so that’s been good.”
After deferring its interim dividend, Old Mutual will continue to monitor developments in coming months before making a recommendation to the board.
“We don’t have any lack of confidence around the strength of the balance sheet.”
“We’re reasonably optimistic we should be in a position to do something.”
Old Mutual’s shares climbed as much as 5% and were trading up 4.2% as of 10:42 a.m. in Johannesburg, leading gains on the five-member South African life insurance index.
© 2020 Bloomberg