All data are collected in the Fiscal Year of 2008-2009.

Malawi / Finance, Insurance, Investment

The company was founded by John Fairbairn as a mutual insurance company in 1845 under the name of The Mutual Life Assurance Society of the Cape of Good Hope. In 1970 Old Mutual acquired a major shareholding in the newly formed Mutual & Federal and in 1973 acquired shareholdings in Nedcor Bank. In 1999 the company listed on the London, Johannesburg, Zimbabwe, Malawi and Namibian Stock Exchanges.

In 1999 it was demutualised and listed on London Stock Exchange and JSE Securities Exchange. In 2000 it bought the Gerrard Group, a financial services concern and United Asset Management, based in Boston.

The Life and Pension Industry in Malawi dates back to 1930 when the first Life Office, Old Mutual started selling Life Assurance products to clients in what was then known as Nyasaland. Old Mutual later opened an office in Blantyre in 1954 with the appointment of a resident representative. In 1976 this office was upgraded to a full Branch office of Old Mutual South Africa.

Old Mutual Malawi is a subsidiary of Old Mutual plc and currently the only foreign listed counter on the Malawi Stock Exchange.

30 Glyn Jones Road, Old Mutual Building, Blantyre, Malawi; tel: +265 (0) 1 820 677; faz: +265 (0) 1 822 649

Old Mutual House, City Centre, Lilongwe 3, Malawi; tel: +265 (0) 1 773 522; fax: +265 (0) 1 771 075

Old Mutual Malawi operates primarily in the long-term savings market. Other services include asset management, life assurance, third-party asset management, pension fund administration and management, and property investment. Historically, it has focused on the corporate segment of the market and sells group life cover and annuities, pension fund management, credit life and funeral cover. It also sells life cover to individuals in the retail segment.

97 employees

Old Mutual Malawi has over 40 000 policyholders and controlling over K39b (US$ 279 million) worth of assets under management.

Old Mutual Malawi is the largest Life Assurance Company in Malawi. The long- term (life) insurance market has two major players; Nico Life Insurance Company Limited and Old Mutual. Between them, they control about 97 percent of the 3 Billion Kwacha premium income market, with Old Mutual dominating with a 55 percent market share. The third player is Vanguard Life Assurance Company Limited.

“To become the international long-term savings and investment provider of choice and the premier financial services provider in South Africa and to focus on leveraging our strongest businesses (South Africa and Long-Term Savings), to streamline the Group, and to drive value creation within, and between businesses”

“To be a leading wealth creation organization in Malawi through delivering innovative and superior services and results to our clients and stakeholders while being an employer of 1st choice”

Its business model is based on the following: “maintain and strengthen our capital position; streamline portfolio over time; leverage scale in our Long-Term Savings businesses; drive value creation in South Africa; and strengthen governance and risk management.”

“Maintain and strengthen our capital position

We continue to closely monitor our capital and liquidity position, with uncertain markets making it increasingly important to consider the impact from each management action to overall Group capital position. Our FGD surplus has increased to £0.9 billion as at 31 March 2009 and we have strong capital surpluses in our individual business units. Continuing to manage our capital/liquidity responsibly is our top priority.

Streamline portfolio over time

We recognise that our portfolio of businesses is too broad. We operate in too many geographies, have too many lines of business and some of which are sub-scale in their respective markets. This is a strong focus of our attention and we recognise that our portfolio requires simplification.

However, in the current environment, major rationalisation of our portfolio of businesses would be extremely difficult and, if achievable, would almost certainly destroy value for our shareholders. At this stage, we have therefore concluded that it will take some time to achieve our optimal business structure. That said, we have already taken some actions where it has been sensible to do so, namely: completed the sale of our Australian business; rationalised our businesses in continental Europe, creating two hubs based in Berlin and Paris for the mass market and affluent markets respectively; exited Portugal; scaled back our aspirations in the Far East, and have closed our office in Hong Kong and have terminated the acquisition of the Chinese Asset Manager TEDA.

Leverage scale in our Long-Term Savings businesses

We have consolidated all our long-term savings businesses into a single operating structure, including Skandia, Old Mutual South Africa (OMSA), US Life and Asia Pacific. We believe that there is a significant amount of value that can be unlocked by these businesses working more closely together. For example, by deploying the distinctive technology and capabilities that exist within our South African, UK and Nordic platform businesses more effectively across the Group.

Drive value creation in South Africa

We have already created significant value through co-operation between Nedbank and OMSA delivering synergies in excess of R1 billion in annual pre-tax profits. We remain firmly committed to all our South African businesses and in line with our focus on maximizing the value of each individual business, believe that there is more value that can be achieved through their closer co-operation. We believe greater synergies can be delivered between Nedbank and OMSA, e.g. in the area of IT and procurement as well as agreeing and delivering on revenue synergies from cross-selling, distribution agreements, etc.

Strengthen governance and risk management

In 2008 we started to invest in additional risk resources (people and systems) and, as a result, our risk and governance processes have been significantly strengthened. The next priority is to embed those processes firmly across the Group. One consequence of these initiatives is that we are rolling out a business level risk appetite, which sets the mandatory risk levels each business must adhere to.”

We have also launched an 'integrated Capital, Risk and Financial Transformation' (iCRaFT) programme that aims to implement best practice in the way that we measure and manage risk, capital and financial performance. This programme will also ensure that we become fully compliant with Solvency II, the new regulatory regime being introduced for all European-domiciled insurers.

In Malawi

“As a leader in our chosen local market, Old Mutual Malawi will continue to build on our culture of integrity and financial strength by providing quality products and service to our clients. We remain a valued partner of the Old Mutual Group while helping to build the Group’s success. We embrace the challenge of managing our business profitability, and will enhance the Group’s reputation by insisting on and upholding a professional approach to business at all times. Old Mutual Malawi is focused on fully exploiting selected viable opportunities in the local market to satisfy the unique needs of our clients for wealth creation and management. Our goals include anticipating future client needs and competitive trends, and acting on them. “

Old Mutual Malawi is a subsidiary of Old Mutual plc.Old Mutual Life Assurance Company (Malawi) Limited is a local company fully owned by Old Mutual Malawi Limited and whose ultimate shareholder is Old Mutual Plc

The Insurance Act of 1957 regulates the insurance industry. Other than currency changes effected when the country moved from the Pound Sterling to the Kwacha, the Act itself has not seen any significant modifications over the years and all stakeholders agree that it is an outdated legislation. A new Act is in draft form.

Responsibility for supervision of the insurance industry is currently in the hands of the Ministry of Finance although the office of the Governor of the Reserve Bank is the de facto Registrar of Insurance. The Reserve Bank deals with applications, registration and deregistration, financial monitoring as well as routine supervision of the industry.

The minimum capital requirement for an insurance licence in Malawi is only US$95 000. The Reserve Bank, which issues the licences, also requires that the applicant is “fit and proper” and can present a sound business plan. Furthermore, the Reserve Bank also considers whether the establishment is in the best interest of the financial system of Malawi. There are no restrictions regarding foreign ownership.

With other Old Mutual offices, Malawi launched the new generation policy, 'Greenlife' in 2005 and has seen its successful implementation. In 2007, the recurring premium on 'Greenlife' surpassed that of reversionary bonus products. The product is market-linked as well as inflation linked. In 2008, the company introduced Group Credit as well as Funeral product offerings.