Old Mutual says Skandia remains core as it records 11% new business dip

Old Mutual has denied that cutbacks in Skandia’s support to advisers is a precursor to a sale of the business.

In a conference call this morning, group chief executive Julian Roberts said the firm was core to Old Mutual’s business.

He said: “The Skandia business is absolutely key to this group. People do speculate from time to time on all elements of our group because we said we would go through a restructuring.

“The changes we have made in the sales area are because of the success of the platform moving forward.

“We finished the integration of the old Skandia and Selestia platform and that is working extremely well. As such, our model in the UK is different from what it has been in the past and therefore we have decided to restructure our organisation.”

Meanwhile, the firm reported long-term savings business on an annual premium equivalent basis was down 11 per cent to £960m for the first nine months of 2009. Unit trust sales increased 12 per cent across the group to £4.4bn.

UK life sales were up 6 per cent to £72m in the third quarter and unit trust sales were up 53 per cent to £536m.

The firm says the continued recovery in the markets saw a movement back into equities, helping drive sales growth during the period.

Europe life APE sales were down 3 per cent to £208m and unit trust sales increased by 63 per cent to £945m. In emerging markets, life APE sales increased by 6 per cent to £104m and unit trust sales were up 30 per cent to £754m.

Group funds under management increased by 6 per cent in the third quarter to £281bn.

Old Mutual’s FGD surplus increased to £1.4bn, up from £1bn at June 30 due to a £500m bond issued in October.

Roberts says: “The group has delivered a good sales performance during the third quarter, a marked improvement on the first half of the year, as the pick-up in the investment market has led to increased equity allocation by our clients.

“This trend has continued into the fourth quarter, although consumers and asset allocators remain cautious. We expect market conditions to remain volatile.

“We have made further strategic progress. We have resolved our capital and liquidity issues, we are successfully managing the risks in US life, and we continue to simplify the portfolio.

“As recently announced, we have made an offer to acquire the remaining ordinary shares in Mutual & Federal, which we expect to complete before the end of the year.

“We remain focused on managing risk and capital tightly and on driving further underlying operating efficiencies in order to capitalise on further recovery in our markets.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. 500 hours of study, 50% pass marks, uncertainty about your very survival, a myriad of regulatory initiative, the collapse of the UK banking system – all have had just a slight impact on the ability of the IFA community to continue writing new business!

    Blame is on the doorstep of the FSA – I want a regulator not a parasite

  2. The CEO of Old Mutual doesn’t have a job if the Group gets rid of Skandia – so obviously he WOULD say it’s key. For his own sake, he has to keep hold of it, whether it’s sensible financially for the Group to do so or not.

    The Board, on the other hand, and the Shareholders might have other ideas.

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