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When Iain Williamson took over as CEO of Old Mutual four months ago, Africa’s largest insurer was getting hit from all sides.
The Cape Town-based financial services firm was grappling with the economic fallout from a strict lockdown to contain the spread of the coronavirus, a surge in claims, and tumultuous global capital markets.
Iain Williamson, CEO of Old Mutual
His reputation had been affected by a bitter legal dispute that saw Williamson’s predecessor suspended, barred from 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 relax and retire home in 2018.
Now the 50-year-old is adding flesh to a strategy update that began with the board last year, even in the midst of the fight with former CEO Peter Moyo.
Williamson is seen as a safe pair of hands, having joined the group about 30 years ago and has been performing in the highest position since May last year. At that time, five CEOs came and went.
Here are some highlights from an extensive interview with Williamson to discuss topics from his transition to the position to paying dividends:
South African Market
- Part of Old Mutual’s plan involves selling a broader range of financial services to its 6 million clients in South Africa, where it makes 80% of its profits. Insurers and local banks, including Sanlam and Standard Bank, are struggling to get clients through the recession in their local market.
- “In the South African market we still see a lot of growth pockets.”
- “There is a great opportunity to use what we know about customers to offer a truly meaningful and broader offering. There are many who probably last bought something from us 10 or 20 years ago due to the nature of our business. “
- The insurer’s main battlefields for the next 10 years include further cost savings, expanding and defending market share in South Africa, reversing its East African operations and investing in technology.
- Business has improved every month since it hit its lows in April.
Going digital
The 175-year-old firm is in talks with fintech players to create an ecosystem that will make it easier for clients to add more products.
It is also working to digitize its entire business, already deploying 151 robots to reduce processing times and equipping consultants with the technology they need to function when they cannot physically meet with clients.
The insurer has partnered with Amazon Web Services to modernize its technology, launched a new website and a new application.
CEO transition
“It has been a strange transition” with the change from interim CEO to having the job permanently.
The announcement was made on a Friday and officially began on Monday, July 6. But nothing had changed much.
“All meetings are the same, the agenda is already set in advance. His time horizon changes slightly as he has confirmation that it is a longer-term appointment, so it has been good. ”
Dividend forecast
After deferring its interim dividend, Old Mutual will continue to monitor developments in the coming months before making a recommendation to the board.
“We have no lack of confidence around the strength of the balance sheet.”
“We are reasonably optimistic that we should be in a position to do something.”
Old Mutual shares rose as much as 5% and were trading 4.2% as of 10:42 a.m. in Johannesburg, leading gains on the five-member South African Life Insurance Index.
© 2020 Bloomberg
