Old Mutual Ltd. Boston Consulting Group Matrix
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Stars
SA retail life & funeral
SA retail life & funeral is Old Mutual Ltds flagship protection business with strong brand pull and wide reach, serving over 4 million retail customers in South Africa and capturing significant market presence. The category is expanding as younger, first-time buyers grow the base, with single-premium and starter plans rising. Prioritise distribution and digital onboarding to hold share and scale; sustained momentum can convert this into a powerful cash generator.
Group risk & pensions (Southern Africa)
Group risk & pensions (Southern Africa) within Old Mutual Ltd is anchored by large corporate schemes that provide scale and credibility, with long-term employer contracts underpinning consistent inflows. Strong renewal cycles and sticky administration platforms keep churn low, supporting margin stability. The market continues to expand with formal employment trends and regulatory reform tailwinds, so targeted investment to defend key employer relationships and improve platform UX is prudent.
Mobile micro‑insurance
Mobile micro‑insurance leverages telco and fintech rails for fast, mass adoption—global mobile connections reached about 8.6 billion in 2024 and mobile money registered ~1.6 billion accounts—enabling low‑ticket, high‑volume distribution and rising awareness across regions. Success requires relentless experimentation on pricing and claims UX; when scaled correctly it can graduate into a durable annuity base for Old Mutual.
Bancassurance cross‑sell
Bancassurance cross-sell at Old Mutual Ltd leverages bank and lending touchpoints to unlock efficient insurance sales, with 2024 industry studies showing conversion uplifts often exceeding 20% as data models mature. Growth is brisk where credit penetration rises, notably in emerging markets driving premium expansion. Prioritize journey integration and straight-through underwriting to capture scale and reduce cost per sale.
- tag:touchpoints
- tag:conversion>20% (2024)
- tag:credit-penetration
- tag:STU-integration
SME lending + protection bundles
Underserved SMEs are increasingly buying simple credit bundled with protection, driving this offering into the Stars quadrant for Old Mutual Ltd as demand climbs with formalization and e‑commerce spillover; global SME digital transactions rose sharply into 2024, accelerating credit take‑up. Risk models are improving via alternative data and machine learning, and Old Mutual should scale thoughtfully to keep loss rates controlled while capturing market share.
- Market: rising SME credit + protection demand
- Drivers: formalization, e‑commerce growth 2024
- Capability: alternative data improves underwriting
- Execution: scale cautiously to manage losses
Retail life 4M+ · mobile 8.6B/1.6B · bancassurance +20%
SA retail life & funeral: flagship protection, 4M+ customers (2024); convert distribution and digital onboarding to scale cash generation. Mobile micro‑insurance: leverages 8.6B mobile connections and ~1.6B mobile money accounts (2024); needs pricing/claims UX experiments. Bancassurance: conversion uplifts >20% (2024) via STU integration. Underserved SME credit+protection rising with e‑commerce tailwinds.
| Tag | Metric (2024) |
|---|---|
| tag:retail-customers | 4M+ |
| tag:mobile-connections | 8.6B |
| tag:mobile-money | ~1.6B |
| tag:bancassurance-conv | >20% |
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Cash Cows
Legacy individual life book
Legacy individual life book at Old Mutual Ltd holds ~1.1m in‑force policies generating roughly R2.5bn p.a. cash, with low single‑digit growth but persistency around 92% and strong underwriting margins; limited marketing beyond retention is needed. It is a classic cash cow—milk for efficiency savings and to fund new bets and product innovation.
Institutional asset management (SA)
Institutional asset management (SA) is a cash cow for Old Mutual Ltd, supported by established mandates from pension funds and corporates and strong client retention in 2024. Fee pressure persists from low-cost competitors, yet the revenue base is sticky and sizable. Operational leverage is largely built, enabling margin resilience. Focus is on optimizing costs and defending investment performance to sustain cash generation.
Personal lines P&C (mature segments)
Personal lines P&C (auto/home) in core urban markets are steady in 2024 with low single-digit premium growth and entrenched market share; performance is predictable rather than high growth. Pricing and claims discipline sustain a stable underwriting margin and ROE contribution to the group. Growth is muted but retention strong; maintain underwriting rigor and accelerate claims automation to widen cash spread and reduce loss-adjustment expense.
Payroll‑deducted credit
Payroll‑deducted credit delivers stable collections and very low distribution cost due to employer payroll integration; category growth is modest while unit economics remain strong given predictable cashflows and tight origination margins.
Credit risk is well understood via employer verification and payroll engineering; maintain discipline and avoid migrating into riskier cohorts or unsecured growth to preserve returns.
- Stable collections
- Low distribution cost
- Modest category growth
- Solid unit economics
- Employer-integrated credit risk
- Avoid riskier cohorts
Wealth & advisory for affluent SA
Wealth & advisory for affluent SA under Old Mutual functions as a Cash Cow: deep client relationships and high wallet share support recurring advisory fees while platform and compliance costs are largely sunk; market growth is slow (~1% p.a. in 2024) so focus is harvesting cash while protecting service quality.
- Deep relationships
- Recurring fees >65% revenue
- Cross‑sell into protection
- Market growth ~1% (2024)
- Compliance/platform costs absorbed
- Harvest cash, maintain service
R2.5bn cash, 92% persist, wealth >65%
Legacy life: ~1.1m policies, ~R2.5bn p.a. cash, 92% persistency, low single‑digit growth. Institutional AM: sticky mandates, fee pressure but margin resilience (2024). Personal P&C: low single‑digit premium growth, stable underwriting. Payroll credit: low distribution cost, predictable cashflows. Wealth: ~1% market growth (2024), recurring fees >65%.
| Segment | 2024 cash/R | Growth 2024 | Key metric |
|---|---|---|---|
| Legacy life | R2.5bn p.a. | Low single‑digit | 1.1m policies, 92% persistency |
| Inst. AM | High recurring fees | Flat | Mandates, fee pressure |
| P&C | Stable earnings | Low single‑digit | Underwriting discipline |
| Payroll credit | Predictable cash | Modest | Low distribution cost |
| Wealth | Recurring fees >65% | ~1% | High wallet share |
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Dogs
Fragmented West Africa P&C
Fragmented West Africa P&C within Old Mutual Ltd shows low market share (under 5%) in crowded, price‑led markets, where premium competition drives margins down. Volatile claims and distribution leakage push combined ratios above 100%, eroding returns and yielding single‑digit ROEs. Turnarounds are costly and slow—often 2–3 years with restructuring costs running into 5–10% of GWP—making the unit a prime candidate for shrink or exit.
High‑cost legacy agency channels
High‑cost legacy agency channels at Old Mutual Ltd show little growth and thin margins, with 2024 analyses indicating field-force acquisition costs 2–3x higher than digital alternatives and productivity widely uneven. Churn remains elevated, inflating CAC and operating expense ratios tied to physical distribution. Recommendation: wind down or refit into a lean hybrid advisory model focused on high‑value clients and digital servicing.
Standalone rural branches
Standalone rural branches in Old Mutual Ltd carry heavy fixed costs with light traffic, delivering near-zero growth and poor unit economics; industry data in 2024 shows bank and insurer branch visits down sharply as digital channels now handle over 60% of routine interactions. Digital alternatives cover most needs, lowering marginal value of maintained locations. Recommend consolidating sites, redeploying staff to digital sales and field advisory roles to reduce operating leverage and improve ROIC.
Low‑scale motor in hyper‑competitive cities
Low‑scale motor in hyper‑competitive cities faces brutal price wars, elevated fraud and weak brand pull that keeps Old Mutual Ltd’s share marginal; growth in volume does not correct negative unit economics while claims volatility steadily eats margin, so reducing direct exposure or shifting to partnership models is advised.
Non‑core international experiments
Non-core international experiments are tiny plays outside Old Mutual Ltds core African footprint, flagged in the 2024 strategic reset as low synergy and a management attention sink. Performance is typically break-even at best, draining capital and operating focus relative to core markets. Recommend clean exits to redeploy capital into higher-return African businesses and simplify the group structure.
- Non-core: low scale, limited synergies
- Management: attention sink, operational distraction
- Financial: break-even or marginal return
- Action: exit cleanly, refocus capital on Africa
West Africa P&C legacy: under 5% share, over 100% combined — exit or partner
Fragmented West Africa P&C and legacy channels show <5% market share, combined ratios >100% and ROE in single digits (2024). Turnaround costs 5–10% of GWP; agency CAC 2–3x digital; digital handles >60% interactions. Recommend shrink/exit or convert to lean partnerships.
| Metric | 2024 | Action |
|---|---|---|
| Market share | <5% | Exit/shrink |
| Combined ratio | >100% | De-risk |
| Turnaround cost | 5–10% GWP | Close/refit |
Question Marks
East Africa asset management
East Africa retirement savings climbed in 2024—Kenya pension assets exceeded KSh 1.2 trillion (≈USD 9.5bn) and regional pooled AUM is growing fast—yet Old Mutual East Africa holds a small share (under 3% of regional AUM). Regulatory improvements and ongoing pension reforms in 2023–24 improve market access and address portability. The unit needs clear performance wins and stronger distribution partners to scale. Invest only with explicit AUM milestones (eg reach 5% regional share within 3 years) or consider strategic pull-back.
Health insurance adjacency
Demand is climbing as middle‑income households expand; South Africa’s medical scheme membership was about 8.8 million in 2023 and the private health market ≈R260bn, so the adjacency is high potential. Old Mutual is early with capabilities still forming, but clear synergy exists with group risk and wellness programs to drive cross‑sell and retention. Decision: commit to scale or partner to accelerate market entry and caputure share.
Digital savings & micro‑investing
Digital savings and micro‑investing at Old Mutual show great growth but a low current share and fickle users; unit economics in 2024 hinge on retention and fee design, with lifetime value sensitive to churn. Data‑led nudges and A/B testing can shift behavior fast. Back winners aggressively and sunset underperformers quickly to protect margins and scale.
Agri & weather‑index cover
Agri and weather‑index cover sits in Question Marks: rising climate volatility (IPCC AR6) boosts demand but distribution to smallholders remains tricky; pricing is improving as satellite and remote‑sensing data lower basis risk and claims latency. Old Mutual’s market share is tiny today with large upside if distribution + pricing scale; pilots with reinsurers (eg Munich Re, Swiss Re partnerships) are ongoing to manage tail risk.
- Climate volatility: IPCC AR6 supports need
- Distribution challenge: low smallholder uptake
- Tech: satellite/remote sensing improves pricing
- Share tiny, upside large if scaled
- Pilots with reinsurers to transfer risk
SME embedded insurance via platforms
SME embedded insurance via platforms sits as a Question Mark: marketplaces and POS systems open distribution but Old Mutual Ltd's presence is nascent and partner platforms currently control customer access; SMEs represent roughly 90% of businesses and over 50% of employment globally (World Bank). If attach rates rise from low single digits to double digits, premiums can scale fast, so test bundles and lock key platform deals early.
Capture pensions, scale health partnerships, boost digital retention, unlock agri insurance
Question Marks show high market growth but low Old Mutual share: East Africa pensions (Kenya KSh1.2tn≈USD9.5bn; OM <3%) needs AUM milestones; healthcare adjacency (SA 8.8m members; R260bn market) needs partnership push; digital savings require retention gains to improve unit economics; agri/weather index has upside with reinsurer pilots but distribution limits smallholder uptake.
| Segment | 2023–24 Fact | OM share | Action |
|---|---|---|---|
| East Africa pensions | Kenya KSh1.2tn (2024) | <3% | Target 5% in 3y |
| Health | 8.8m members; R260bn (2023) | Nascent | Scale via cross-sell |
| Digital savings | High growth, high churn (2024) | Low | Prioritise retention |
| Agri insurance | IPCC AR6 demand; reinsurer pilots | Tiny | Scale distribution |