Old Mutual Ltd. · JSE:OMU
Old Mutual — Investor Day (2021)
88 slides from Old Mutual's investor day presentation, 2021
Slide 1: Welcome
““ TWALNWd10
Slide 2: Agenda
14:00 – 14:05 14:50 – 15:05 15:40 – 15:55 Welcome and context Building a world-class Charting a Agenda Sizwe Ndlovu investment platform corrected course Khaya Gobodo Garth Napier 14:05 – 14:10 Introduction and recap 5 min Q&A 5 min Q&A Celiwe Ross 14:10 – 14:25 16:00-16:15 In conversation 10 min BRE
Slide 3: Welcome - Sizwe Ndlovu
Welcome Sizwe Ndlovu Old Mutual is a Licensed Financial Services Provider
Slide 4: a ae tS iF Za Ses
a ae tS iF Za Ses LET FT Fas
Slide 5: Introduction and Recap
Introduction and Recap Celiwe Ross Old Mutual is a Licensed Financial Services Provider
Slide 6: Achieving our ambitions
Achieving our ambitions R750m Building cost saving digital by end of capabilities 2022 Growth Amplify our adjacent to customer our and adviser traditional experience channels
Slide 7: In conversation with Iain Williamson and Gugulethu Mfuphi
In conversation with Iain Williamson and Gugulethu Mfuphi
Slide 8: Capitalising on our capabilities
Capitalising on our capabilities Prabashini Moodley
Slide 9: Who we are
URBATE = Who we are
Slide 10: Our place in the SA market
Our place in the SA market R250bn 22% R1.8bn assets under of the group in profits advice/ risk market 2019 RFO administration share
Slide 11: Retailisation and member solutions
Retailisation and member solutions R3bn c.R500m +1.5m Retail Life APE members retention in retail in NCCF cross sales
Slide 12: Challenges
Challenges Traditional South African employee benefits market is saturated Growth is stagnant in large corporate space Dominance of key product lines being eroded
Slide 13: Solutions
Solutions Re-assert our claim to ‘market-leading’ title Re-earning our ‘innovative challenger’ title Making the decisions that impact the world around us positively
Slide 14: Where we are
UPDATE = Where we are
Slide 15: Absolute Growth Portfolio improved short-term performance
Absolute Growth Portfolio improved short-term performance Pace of smoothing makes 1-year 3-Year Performance is affected by level comparisons difficult of equity exposure and pace of smoothing Old Mutual Absolute Old Mutual Smooth Growth 12,6% CoreGrowth 90 7,4% Old Mutual Absolute Sanlam Stable Bonu
Slide 16: Uptick in market activity
Uptick in market activity Cautious in Much stronger lockdown pipeline 2020 2021 2022 Limited market Weak pipeline activity into 2021
Slide 17: Strong pipeline to drive Net Client Cash Flow recovery
Strong pipeline to drive Net Client Cash Flow recovery by product (Rm) Pre-retirement Annuities Retail GAP & OMART Total 10 000 5 000 0 -5 000 -10 000 -15 000 Actuals 2016 Actuals 2017 Actuals 2018 Actuals 2019 Actuals 2020 Actuals H1 2021
Slide 18: Market leader in umbrella funds
Market leader in umbrella funds Based on AUM Old Mutual ^ R137 billion Alexander Forbes * R99 billion MMI ** R56 billion Sanlam R53 billion Liberty R39 billion ^ Based on the unsigned AFS for 2021 * Comprises of AF Retirement Fund, AF Access and AF Core Plan. Access AFS (30/09/2020), Core AFS (31/12
Slide 19: Our execution framework
Our execution framework RECTIFY SIMPLIFY AMPLIFY Investment Customer Technology performance engagement Distribution partnerships In-organic growth Adjacencies SME offerings
Slide 20: Rectify Simplify Amplify
RECTIFY SIMPLIFY AMPLIFY
Slide 21: Simplified customer experience
Simplified customer experience Multiple channels Remchannel of member engagement Africa’s leading remuneration benchmark Legacy admin system moved to AWS Cloud
Slide 22: Rectify Simplify Amplify
RECTIFY SIMPLIFY AMPLIFY
Slide 23: SME offering
SME offering Listen Learn Innovate Iterate
Slide 24: Our commitments to investors
Our commitments to investors Stronger #1 Commercial Build out sales Profitable umbrella SME funding delivery market leadership proposition in 2022 share
Slide 25: Building a world-class investment platform
Building a world-class investment platform Khaya Gobodo
Slide 26: What makes us competitive?
What makes us competitive? 34
Slide 27: Old Mutual Investments Holdings Group
2018 Old Mutual Alternative Investments Marriott Investment Old Mutual Managers Investment Group OLD MUTUAL Old Mutual Specialised Macro INVESTMENTS Finance Solutions HOLDINGS GROUP Liability Driven Investments Customised Solutions Old Mutual Equities Futuregrowth Asset Global Emerging Global Equity
Slide 28: What this meant in reality
What this meant in reality… 36
Slide 29: What are we solving for?
What are we solving for? Four key constituent clients: The life Retail investors company as Old Mutual Independent via Old Mutual the custodian as the institutional unit trust funds of policyholder shareholder clients assets
Slide 30: The journey
a3 n Wu > < 5 a ee <l 2 O ris) The journey
Slide 31: A logical evolution
A logical evolution 5 defined Fostering Clear value businesses extreme propositions with purpose ownership Allow the Create businesses alignment of to communicate the value with clarity chain RECTIFY SIMPLIFY AMPLIFY
Slide 32: Our investment mandate with R750 billion AUM
Five distinct, effective and aligned affiliate businesses Our investment mandate with R750 billion AUM Old Mutual Futuregrowth Old Mutual Old Mutual Marriott Investment Asset Alternative Specialised Investment Group Management Investments Finance Managers AUM: AUM: AUM: AUM: AUM: R437 BN R177 BN R54
Slide 33: KPIs to measure success
KPIs to measure success Investment excellence Innovation Top quartile New products & capabilities Improved delivery Client reputation Responsible Investing Improved retention of clients True ESG Integration Fund flows into ESG & Impact Stability Net client cash flows Strategy, propositions, people a
Slide 34: Positive trajectory in key metrics
Positive trajectory in key metrics YTD September 2019 to September 2021: -R4.1bn to R5.9bn R1.3bn to R4.7bn NCCF OMAI capital raise 0.29% to 0.29% 37% to 40% Annuity fee margin* Operating Margin % core funds above: Median Benchmark 1 1-year -year 5-year 25% to 88% 63% to 69% 1-year 5-year 44% to 81%
Slide 35: Competitive advantages
Competitive advantages OMLACSA seeded IDEAS OMLACSA seeded OMLACSA seeded our Emerging fund which is soon to be a what is now a Market Infrastructure JV, which closed R20bn R1bn its first investment in India etc for SA INFRASTRUCTURE HYBRID EQUITY FUND $175m EQUITY FUND 1999 2000 2021 OMLACSA seeded
Slide 36: We have a strong platform to grow from (AUM)
We have a strong platform to grow from (AUM) Pan African Low-cost platform Unlisted credit platform Infrastructure platform (LDI + Indexation) R36bn R164bn R69bn Launched 6 unlisted equity and debt funds RECTIFY SIMPLIFY AMPLIFY with long term scale potential
Slide 37: Delivering sustainable value to our clients and shareholders
Delivering sustainable value to our clients and shareholders RECTIFY SIMPLIFY AMPLIFY 45
Slide 38: Non-negotiables
Non-negotiables Deliver top Continue to Stay quartile grow our Deliver committed investment higher margin growing to 5 performance third party operating independent across the institutional margins businesses ecosystem flows RECTIFY SIMPLIFY AMPLIFY
Slide 39: In conversation with Casper Troskie and Gugulethu Mfuphi
In conversation with Casper Troskie and Gugulethu Mfuphi
Slide 40: Quick results
Quick results Life APE Sales Gross flows Significant improvement 18% 7% - VNB margin ΔQ3 2020 ΔQ3 2020 - Net lending margin - Underwriting margin
Slide 41: Quick results
Quick results Significant Share price performance Life APE Sales Gross flows improvement 18% 7% 39% growth YTD - Net lending margin - VNB margin ΔQ3 2020 ΔQ3 2020 - Underwriting margin
Slide 42: Solvency ratio (%) - OML
Solvency ratio (%) OML Target range 165% - 195% 190 177 184 FY 2020 H1 2021 Q3 2021
Slide 43: Solvency ratio (%) - OMLACSA
Solvency ratio (%) OMLACSA Target range 175% - 210% 215 206 225 FY 2020 H1 2021 Q3 2021
Slide 44: Impact of COVID-19 on September RFO
Impact of COVID-19 on 30 September RFO Increase of Release of Net Unrealised Total direct Excess COVID-19 COVID- pandemic Mark to COVID-19 Rm deaths provisions at 19 provisions impact Markets impacts H1 2021 Mass and Foundation Cluster 960 1 043) 251 168 – 168 Personal Finance and Wealth 3 571 (2 61
Slide 45: Life APE sales (Rm)
Life APE sales (Rm) +18% 9,029 6,890 8,136 Q3 2019 Q3 2020 Q3 2021
Slide 46: Value of new Business (Rm)
Value of new Business (Rm) >100% 1,341 1,099 Q3 2019 Q3 2021 274 Q3 2020
Slide 47: Underwriting margin (%)
Underwriting margin (%) 320 bps 0,5 2,6 Q3 2019 Q3 2021 -0,6 Q3 2020
Slide 48: Net Client Cash Flow (Rbn)
Net Client Cash Flow (Rbn) 3,6 Q3 2020 -0,7 -2,6 Q3 2019 Q3 2021
Slide 49: In conversation with Casper Troskie and Gugulethu Mfuphi
In conversation with Casper Troskie and Gugulethu Mfuphi Old Mutual is a Licensed Financial Services Provider
Slide 50: Charting a corrected course
Charting a corrected course Garth Napier
Slide 51: Overview of OM Insure
Overview of OM Insure Retail R7.7Bn CGIC iWyze R1.3Bn R1Bn MFRF Specialty R3.3Bn R1.9Bn
Slide 52: Top 3 insurer with R15Bn GWP
R15Bn GWP R200Bn Voted #1 intermediated non- In trade flows life insurance industry approximately Top 3 2020 SA Customer Satisfaction 11% Index (SA-sci) in any of the markets insurable GDP we operate in
Slide 53: Where we come from
Where we come from RECTIFY SIMPLIFY AMPLIFY
Slide 54: The opportunity to rectify
The opportunity to rectify GWP growth Inconsistent of 3.5% underwriting COVID compared results to market at 7.6%
Slide 55: Lessons from the past
Underestimated the growth of the direct channel Lessons Expense growth faster than GWP Lack of investment from in tech and data thepast Substantial shifts in leadership and staff Loss of key underwriting skills
Slide 56: Where we are going (2025)
URBATE = Where we are » ” going (2025) %»—
Slide 57: Where we are going (2025)
Where we are going (2025) 7% 10% 4-6% #1 CAGR Non-commission Consistent Net Maintain leading GWP Expense Ratio Underwriting position in customer Margin satisfaction
Slide 58: How we will get there
URBATE #3 How we will get there
Slide 59: Rectify Simplify Amplify
RECTIFY SIMPLIFY AMPLIFY New operating model Use technology to Develop Appropriately focused reduce complexity new products and channels (Direct +) Drive cost efficiencies Leverage data to price correctly for improve pricing Maintain our market the market leader position in trade Optimise our credit
Slide 60: Rectifying our core
INVEST. -R UPDATE Rectifying © Se O O ne = | oO
Slide 61: Focused operating models
Focused operating models Retail Corporate and niche CGIC, Specialty Retail intermediated (incl. Large commercial) Direct+, iWYZE MFRF Each require different focuses to win RECTIFY SIMPLIFY AMPLIFY
Slide 62: CGIC turnaround complete
CGIC turnaround complete Underwriting - Q3 2020 30% reduction R110Bn due to improved risk quality of insured buyers off our total exposure of R350Bn RECTIFY SIMPLIFY AMPLIFY
Slide 63: Investing in our people
Investing in our people RECTIFY SIMPLIFY AMPLIFY
Slide 64: Simplifying to unlock value
Simplifying to unlock value
Slide 65: Simplifying and digitising Retail and Specialty
Simplifying and digitising Review and Retail our processes Specialty optimise our risk Increased levels retention of automation Leverage data to improve pricing RECTIFY SIMPLIFY AMPLIFY
Slide 66: Amplifying for growth
Amplifying for growth 97
Slide 67: Channel innovation
Channel innovation Contributing 20% New Alternative channel 'Direct+' of new business RECTIFY SIMPLIFY AMPLIFY
Slide 68: Product innovation
Product innovation 15% VeeInsure iWYZE - OM ESD App-driven virtual Fund in Pineapple auctions for Agri sector BCX innovation awards New short-term (2nd in the large insurance app business category) RECTIFY SIMPLIFY AMPLIFY
Slide 69: Comma Insure video
Comma Insure Insurance that enables short pauses between places in your life. Switch your cover on when you need itand off when you don't. Only pay for what you use. / . MUTUAL & FEDERAL SGM
Slide 70: What we are excited about
What we are excited about Strategic Acquisitions The ‘Direct+’channel Acquisition of One Insure* Technology Telematics RECTIFY SIMPLIFY AMPLIFY * Subject to regulatory approval
Slide 71: The direction is set
URBATE = The direction is set
Slide 72: Strong financial delivery
Strong financial delivery Lowest loss ratio over Specialty CGIC MFRF 5 years Grown at Grown at Growing at Non-commission 11% 21% 12.8% expense ratio 13.3% YTD September 2021
Slide 73: Looking ahead
Looking ahead 7% 10% 4-6% #1 CAGR Non-commission Consistent Net Maintain leading GWP Expense Ratio Underwriting position in customer Margin satisfaction
Slide 74: Regaining our mojo
URBATE = Regaining ol Um nate) ie)
Slide 75: Setting up for profitable growth
Setting up for profitable growth Clement Chinaka
Slide 76: A quick recap
A quick recap From Managed Separation to now Firmly Zimbabwe, ANCHORED no longer in Africa consolidated Defended our TURNING strong positions and AROUND our grew market shares East African COVID-19 in Southern Africa businesses
Slide 77: Overview
Overview 1 2 3 Progress The Rest in turning How we will of Africa around our grow the business businesses in business of today East & West Africa
Slide 78: Our footprint on the continent
Our footprint on the continent Q2, 2021 1/5 SOUTH SUDAN 2/9 RWANDA 1/9 2/21 2/7 UGANDA NIGERIA 18/27 27/41 7/24 1/37 3/16 1/13 KENYA 6/21 GHANA 16/26 TANZANIA ZIMBABWE 1/11 3/18 1/16 4/20 NAMIBIA 1/16 3/15 2/26 2/10 1/5 1/6 MALAWI BOTSWANA 6/9 3/13 3/7 3/7 ESWATINI #/# = market position / number of
Slide 79: Growth in key metrics
Growth in key metrics Actual metrics and growth (FY2017-FY2020) Normalized RFO grew to R401m, CAGR 22% R5,8bn R88bn 3% CAGR 7% CAGR Life Gross Flows FUM R3,8bn R4,3bn 7% CAGR 16% CAGR P&C GWP Loans & Advances
Slide 80: Our turnaround journey in East & West Africa
Our turnaround journey in East & West Africa Securing our East Africa 2021 2022 Turnaround to West Africa acquisition of Start rebranding Ghana business be materially operations UAP of UAP turnaround complete businesses 2012 2015 2020 2021 2022 2023 East Africa asset Complete management merger of tu
Slide 81: Our Growth Strategy
Our Growth Strategy RECTIFY SIMPLIFY AMPLIFY
Slide 82: East & West Africa
East & West Africa Improve Improve Improve Improve Pivot to Life P&C Distribution Control Corporate insurance underwriting productivity environment offerings margin Strengthen Grow Loan Balance Book (Faulu) Sheet (UAP) RECTIFY SIMPLIFY AMPLIFY
Slide 83: Digital delivery
Digital delivery 500k 145% active users on growth in digital channels digital sales 900k users accessed the web RECTIFY SIMPLIFY AMPLIFY
Slide 84: Amplify
Our Growth Strategy Amplify 11 7
Slide 85: Amplifying Growth
Amplifying Growth… 1 Integrated Financial Services 2 Strategic Partnerships 3 Mergers and acquisitions 4 Zimbabwe RECTIFY SIMPLIFY AMPLIFY
Slide 86: To recap
To recap… Firmly We expect anchored in We are set Africa, in good turnaround to up to deliver be materially markets with complete by profitable good market growth positions end of 2023
Slide 87: Concluding remarks
Concluding remarks Iain Williamson & Celiwe Ross Old Mutual is a Licensed Financial Services Provider
Slide 88: Thank you
THANK YOU