Bloomberg News

Old Mutual First-Quarter Sales Drop on Euro-Area Turmoil

May 10, 2012

Old Mutual Plc (OML), the third-biggest insurer in the U.K. by market value, said sales fell 13 percent in the first quarter as turmoil in the euro area undermined investor confidence.

Sales on a so-called annual premium equivalent basis fell to 269 million pounds ($434 million) in the first quarter, the London-based firm said in a statement today. That beat the 262- million-pound estimate of 13 analysts surveyed by the company. Assets under management increased 6 percent to 284 billion pounds.

“The prolonged turmoil in the eurozone has continued to undermine investor confidence, creating a subdued retail investment market in Europe as a whole,” Julian Roberts, the insurer’s chief executive officer, said in the statement. “With growth in funds under management and further strategic progress, overall this has been another good quarter.”

Shares (OML) in the firm rose 1.6 percent to 146.2 pence by 8:16 a.m. in London, paring its decline this year to 5.6 percent.

Old Mutual, recovering from two years of net losses linked to hedging failures in 2008 and writedowns of investments, has sold 2.3 billion pounds of assets since March 2010 to cut debt. The company, which is Africa’s largest insurer, sold its U.S. life insurance unit in 2010, and agreed to sell its Nordic unit to Skandia Liv in December. The company, which wants to focus on the more profitable emerging markets, is also considering an initial public offering of its U.S. asset management unit.

“Our strong franchises and significant exposure to higher- growth emerging markets underpin prospects for the year as a whole,” Old Mutual said in the statement.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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