Old Mutual reported double-digit growth in gross flows and improved net client cash flows in the nine months to the end of September.
Gross flows surged by 19% to R170 billion compared to the prior period, driven by inflows across multiple segments. Wealth Management led this growth, benefiting from enhanced client acquisition efforts and the launch of new cash and liquidity products towards the end of 2023. Old Mutual Investments also recorded strong inflows, particularly in its equity, multi-asset, and alternatives capabilities, the financial services group said in a voluntary trading update this week.
Net client cash flow improved by 95% to R557m, supported by reduced outflows in Wealth Management. Nevertheless, higher outflows in Old Mutual Investments, Old Mutual Corporate, and the Africa Regions partially offset these gains.
Old Mutual Investments experienced low-margin outflows from Futuregrowth because of client liquidity needs and strategic investment shifts, while Old Mutual Corporate faced increased retirement, retrenchment, and withdrawal benefit outflows, particularly in its Superfund portfolio.
Regarding to the two-pot retirement system, Old Mutual said as of the end of October it had paid 93% of the savings benefit withdrawal 240 000 claims submitted, amounting to R2.4bn. It and was “well positioned to manage the impact of the increase in claims volumes”.
Although initial withdrawals under the two-pot system will likely dampen net client cash flow, Old Mutual expects the long-term benefits of compulsory preservation to bolster assets under management.
Life Annual Premium Equivalent sales increased by 6% year-on-year to R10.4bn, supported by strong risk sales in the Mass and Foundation cluster and “robust” contributions across distribution channels.
Personal Finance delivered higher guaranteed annuity sales, better savings, and funeral sales, while Wealth Management reported good sales growth in tax-free savings, life and investment funds. This was partially offset by marginally lower sales in Old Mutual Corporate because of lower single-premium sales.
Gross written premiums increased by 7% year-on-year to R20.7bn, driven by strong new business growth and rate adjustments in Old Mutual Insure, particularly in the Specialty segment.
