Old Mutual (OMU) CMD 2025 summary

Strategic priorities and operating model

• Two-phase strategy: value unlock through cost efficiency, margin recovery, and capital discipline, followed by growth via market share gains, new business, and digital expansion.

• New operating model with two segments (Life & Savings, Banking) and a leaner corporate center, devolving accountability to business clusters for faster decision-making.

• Four strategic priorities: drive competitiveness in South Africa, deepen market leadership in Southern Africa, establish OM Bank's right to win, and evaluate/pivot on growth markets.

• Integrated execution leverages technology, AI, and rewards to enhance customer engagement, operational efficiency, and cross-selling.

• Acquisition of 10X Investments and Two Mountains to strengthen digital, direct-to-consumer, and mass market offerings.

Financial guidance and capital allocation

• Medium-term targets: RoGEV 14–16%, dividend per share growth 6–9%, RONAV 15–17% (excl. OM Bank: COE +2–4%), VNB margin 2–3%, underwriting margin 5–8% for OM Insure.

• R2.5bn cost savings targeted by FY2027, with at least R1bn by end 2026, representing a 10% reduction in FY2024 operating costs.

• R3bn share buyback announced, with further buybacks or special dividends considered if shares trade at a discount to group equity value.

• Capital allocation follows a horizon-based approach, prioritizing shareholder returns in the value unlock phase and shifting to growth investments as RONAV improves.

• Cash generation supports a progressive, cash-based dividend policy, with shareholder distributions since FY2022 totaling R16.6bn.

Business developments and growth initiatives

• OM Bank launched as a digital-first, cloud-native platform, acquiring 140k+ customers in three months and targeting break-even at 2.5–3m customers by FY2028.

• Life & Savings cluster reorganized for end-to-end accountability, margin recovery, and digital adviser platforms.

• OM Rewards program drives customer retention and cross-sell, with 7–10% persistency improvement and 90% of bank customers enrolled.

• Old Mutual Insure maintains a top 3 market position, focusing on direct/digital growth, cost efficiencies, and advanced analytics.

• Use of AI and automation to improve customer experience, reduce operational costs, and enhance fraud detection and claims processes.