Old Mutual not looking to sell US business

United Kingdom-listed insurer Old Mutual said on Wednesday it was not looking to sell its United States life business after announcing a further $135-million in writedowns at the troubled unit.

The company also said on Wednesday that chief executive Jim Sutcliffe was resigning with immediate effect.

“Jim felt that he should resign after the surfacing of further issues [in the US life business],” said non-executive chairperson Chris Collins.

Julian Roberts, the former head of the group’s Skandia operations, has been appointed as Old Mutual’s new chief executive.

Roberts told journalists that the insurer is not considering selling its US options, after it announced on Wednesday a $135-million writedown in the value of preferred stock of Fannie Mae and Freddie Mac held by Old Mutual’s US life business.

“We have an isolated issue in the US life business that we are going to tackle very hard and make sure its behind us,” said Roberts.

The unit also took a $125-million provision in August to cover for hedging failures, which was nearly double the level estimated in a June profit warning.

Analysts and shareholders called for a radical overhaul of the business, including the possible sale of its US life unit, after the surprise writedowns.

Old Mutual also announced a strengthening of its reserves by $155-million in the US life business, as its variable annuity product guarantees were hit by continuing volatile equity markets.

Shares in Old Mutual were down 5,65% at 7.33am GMT to 95,4 pence. - Reuters