UK regulatory changes affect Old Mutual sales
This fugure missed analysts' estimates, as regulatory changes in the UK hurt savings inflows.
Life insurance revenue, taking into account exchange rate fluctuations, missed the £272-million average estimate of 15 analysts surveyed by the company.
Fund sales dropped 3% to £3.32-billion from a year earlier, London-based Old Mutual said in a statement today. Analysts had forecast £3.24-billion.
"The continued uncertainty around new regulations has had an impact on distribution in the UK," Old Mutual said in the statement.
Still, chief executive officer Julian Roberts said that "against a backdrop of continued challenging macroeconomic conditions, we are confident in the prospects for the group for the full year,"
Old Mutual is focusing on selling life insurance in fast-growing African countries such as Kenya and long-term savings products in the UK after cutting costs, selling assets and paying down debt to return to profit after the financial crisis.
The UK this year banned fund management and life insurance firms from paying commission to financial advisers in return for sales, undermining demand for some products.
Old Mutual's funds under management from core operations rose 10% to £288.4-billion, boosted by rising equity markets and higher inflows into its US and African business.
That beat analysts' estimate of £276.9-billion.
The insurer set aside R5-billion ($560-million) to buy stakes in firms selling life insurance and savings products to Africa's growing middle class, Roberts said in March. – Bloomberg