Old Mutual Limited (OMU.L): BCG Matrix [Apr-2026 Updated]

Old Mutual's portfolio now reads like a deliberate growth-and-defence playbook: high‑momentum Stars (short‑term insurance, wealth and alternatives, plus select Africa markets) are driving ROE and inflows, mature Cash Cows (Personal Finance, mass market clusters, corporate and Southern Africa) fund dividends, buybacks and expansion, while capital‑hungry Question Marks (the new bank, China JV, digital retirement propositions) demand heavy investment and clarity on scale or exit, and underperforming Dogs (selected country exits, legacy life books, unprofitable mandates) are being wound down to free capital-a mix that makes capital allocation and execution the company's decisive battleground.

Old Mutual Limited (OMU.L) - BCG Matrix Analysis: Stars

Stars

Old Mutual Insure (OMI) has transitioned into a clear 'Star' within Old Mutual's portfolio, delivering exceptional growth and a material underwriting turnaround. Results from operations increased 71% to R1.3 billion for H1 2025, driven primarily by a sharp improvement in underwriting quality: net underwriting margins rose from 0.9% to 9.7%. Gross written premiums (GWP) increased 7% to R7.4 billion in early 2025, materially outpacing broader short-term insurance market expansion. The unit now reports a high return on net asset value (RoNAV) which materially supported group adjusted headline earnings rising 29% year-on-year. Management continues to prioritise OMI as a high-growth engine, leveraging specialist portfolios (motor, commercial, niche broker channels) to capture incremental market share in the near term.

Wealth Management (Old Mutual Wealth and Private Clients) is another Star, delivering strong profitability and asset growth. Operating results rose 33% to R1.84 billion in H1 2025. Group funds under management (FUM) reached R1.5 trillion, up 10% YoY, supported by robust inflows into offshore mandates and high-net-worth platforms. Private Clients reported approximately R59 billion AUM, maintaining a 30% growth trajectory from previous high bases. The unit benefitted from strong domestic equity performance-JSE All-Share Index return of 16.7% in H1 2025-allowing high-margin bespoke solutions to generate consistent capital efficiency and elevated margins.

• Operating results: R1.84 billion (H1 2025), +33% YoY
• Group FUM: R1.5 trillion, +10% YoY
• Private Clients AUM: ~R59 billion, +30% YoY
• JSE ALSI return: +16.7% in H1 2025

Old Mutual Investments (OMI Investments) sustains momentum as a Star through rapid expansion in alternative assets. Revenue for the 2024-2025 period increased by 37%, underpinned by strong inflows into Alternatives and Specialised Finance. OMAI (Old Mutual Alternative Investments) raised R12.3 billion in capital, with nearly 50% from external global investors. Operating results for the investment segment rose 43%, driven by recurring management fees and outperformance in infrastructure and private equity portfolios. The division manages 23 active funds with stakes across over 260 companies in Africa, reinforcing its dominant position in high-growth private markets and contributing materially to the group RoNAV of 15.5%.

Africa Regions function as Stars in selected markets by delivering resilient cash remittances and growth despite macro volatility. The regional footprint across 12 countries produced a R1 billion cash remittance in the latest cycle. Gross flows in Africa Regions remained robust, offsetting life sales weaknesses in mature South African clusters. Although some regional operating profits fell by ~8% due to inflation and currency headwinds in Malawi and Kenya, management values East African and Namibian operations using high-growth dividend discount models, reflecting long-term potential. The strategic pivot toward East and West Africa aims to capitalise on under-penetrated financial markets and multi-pronged expansion opportunities.

• Cash remittance to group: R1 billion (latest cycle)
• Operating profit change (some markets): -8% (inflationary impact)
• Footprint: 12 African countries
• Strategic focus: East & West Africa expansion

Collectively, these Star units demonstrate high growth rates, strong relative market share gains, robust capital generation and focused management allocation. Key strategic priorities across Stars include continued underwriting discipline and margin expansion in OMI, targeted HNW and offshore product development in Wealth Management, accelerated capital raising and fund distribution for Alternatives, and reallocating resources to high-potential African markets to sustain medium-term expansion.

Old Mutual Limited (OMU.L) - BCG Matrix Analysis: Cash Cows

Cash Cows

Personal Finance maintains dominant share in South Africa and is a primary cash cow for Old Mutual. As a core pillar of the group, this segment contributed the largest portion of the combined R1.84 billion operating result (with Wealth Management) in H1 2025. The business serves over 5.4 million policyholders in South Africa, producing consistent premium income and low volatility cashflows despite muted life sales growth of 1% year-on-year. Personal Finance provided essential liquidity to fund the group's R3 billion share buyback program while operating under a disciplined capital allocation strategy; the group shareholder solvency ratio stood at 172%, comfortably within the target range. The mature nature of the book supports stable capital returns, enabling a 9% interim dividend increase to 37 cents per share.

Mass and Foundation Cluster provides steady, high-volume cash flows that underpin group liquidity. The cluster delivered steady operating profits historically exceeding R1 billion but recorded R801 million in early 2025 following persistency basis changes (a 15% decline). It remains a market leader in the South African mass market, processing over 275,000 retirement claims after the "two-pot" reform, managing a lending book of R16 billion and covering over one million lives in a R19.7 billion funeral policy book. The cluster's volume-driven recurring premiums and extensive distribution network form a defensive moat.

• Operating profit (early 2025): R801 million (15% decline)
• Retirement claims processed: 275,000+
• Lending book size: R16 billion
• Funeral policy book: R19.7 billion; lives covered: >1,000,000
• Total brand customers (group distribution reach): 32.5 million

Old Mutual Corporate secures large-scale institutional mandates and operates as a dependable cash generator. The segment contributed to the group's R8.7 billion total operating profit for the 2024-2025 period. Despite some client terminations on investment platforms, Old Mutual Corporate retains a substantial share of South African corporate retirement and risk markets, benefiting from high barriers to entry and long-term contracts with major employers. Strong cash generation supports the group's dividend cover target of 1.5x-2.0x adjusted headline earnings and helps drive operational efficiency and cost-reduction initiatives.

Old Mutual Namibia and Southern African operations outside RSA are mature cash-generating territories that reinforce group stability. Namibia reported "excellent" international fund inflows and remains highly profitable with a robust solvency position. These markets, characterized by high market share and mature financial ecosystems, require minimal CAPEX relative to new ventures while contributing to disciplined growth: regional operations helped drive a 14% increase in group adjusted headline earnings through focused execution in core insurance products. Deepening market leadership in Southern Africa is a strategic lever that preserves capital for broader African expansion.

• Regional contribution to adjusted headline earnings growth: 14%
• Namibia: strong international fund inflows; high profitability
• CAPEX profile: low versus new market entry
• Strategic role: capital preservation for African expansion

Old Mutual Limited (OMU.L) - BCG Matrix Analysis: Question Marks

Dogs - Question Marks

Old Mutual Bank (new standalone bank): The group has invested a cumulative R2.8 billion since 2022 to establish the bank, which launched publicly in late 2025. Management projects an initial annual loss run rate of R1.1-R1.3 billion while scaling. Break-even is targeted for 2028, requiring approximately 2.5-3.0 million active customers. An additional R1.6 billion is allocated for 2026, taking potential total investment toward R8.0 billion (R2.8bn spent + R1.6bn allocated + projected further capital and operating costs through 2028). The unit faces intense competition from digital incumbents (Capitec, TymeBank) and will need rapid customer acquisition, low-cost digital onboarding and high activation rates to convert Old Mutual's 5.4 million existing South African customers into banking users.

China joint venture (50% JV): Old Mutual retains a niche presence in China via a 50% joint venture; the company has previously considered an exit but continues operations. China offers a very large market (world's second-largest economy) but regulatory limits (50% foreign ownership cap in many insurance segments) and entrenched state-backed competitors constrain scale and strategic control. Recent volatility in life sales due to broker-channel regulatory changes has depressed short-term results. Old Mutual's stance-"evaluate and pivot"-indicates limited appetite for heavy new capital there while prioritising a "right to win" in African markets; the JV remains a question mark on capital allocation and strategic focus.

• Ownership constraint: 50% cap limits strategic control and consolidation.
• Regulatory volatility: broker-channel rules have materially impacted life sales.
• Market opportunity: large GDP and insurance density upside vs high entry barriers.

New Savings and Income proposition pilot: In 2025 Old Mutual launched a pilot with select financial advisers to test a new Savings and Income product targeting retirement income markets undergoing regulatory change in South Africa. The proposition seeks to convert Old Mutual's life-insurance customer base into modern savings and income clients. Current status is pilot/build phase - scalability, adviser adoption, digital servicing and profitability remain unproven. Investment needs include digital platform build, adviser incentives/training and compliance adaptation to new retirement rules. Early KPIs to monitor include pilot conversion rate, average account size, cost-to-serve and adviser adoption percentage.

Digital two-pot retirement solutions expansion: After processing 275,000 claims in 2024, Old Mutual is investing materially in digital platforms to support the new "two-pot" retirement system. The regulatory change creates strong demand for flexible retirement products but raises operational complexity and administrative costs. The group is targeting ~99% automated processing rates to keep unit costs down and to retain customers during withdrawals, while maintaining high customer experience standards. The long-term effect on assets under management, fee margins and retention is still uncertain; success hinges on delivering scalable automation, real-time processing and compelling customer journeys.

• 2024 claims processed: 275,000 (operational baseline).
• Automation target: ~99% automated processing to reduce OPEX.
• Primary investments: platform development, security, reconciliation systems.
• Key outcome metrics: retention rate during withdrawals, incremental AUM, fee margin impact.

Comparative summary of Question Marks (Dogs quadrant attributes): The four initiatives share high market-growth contexts but currently carry low-to-moderate relative market share inside their respective competitive sets, substantial incremental capital needs, and uncertain paths to profitability. The bank and two-pot digital expansion are capital- and tech-intensive; the China JV faces strategic and regulatory constraints; the savings pilot requires distribution conversion and scale. Strategic options include accelerate (selective heavy investment), partner/scale through alliances, harvest (limit further capital), or divest/exit where "right to win" is absent.

Old Mutual Limited (OMU.L) - BCG Matrix Analysis: Dogs

Old Mutual's 'Dogs' - low-growth, low-market-share businesses - have been a focal point for portfolio pruning as the group reallocates capital toward higher-return assets within its 12-country strategic footprint.

Tanzania and Nigeria subsidiaries divestment: Old Mutual completed sales of its Tanzania and Nigeria subsidiaries as part of a strategic exit from non-core markets. These operations exhibited low market share, constrained scale and declining margins; both failed to meet the group's return on net asset value (RoNAV) targets in the medium term. The divestments remove exposure to high-risk, low-return jurisdictions and permit redeployment of capital to core markets.

Zimbabwe operations face hyperinflationary challenges: The Zimbabwe business recorded a R2.2 billion decrease in profit in 2025 following a change in functional currency to USD. Hyperinflation, restrictions on dividend remittances and inability to repatriate cash have led management to exclude Zimbabwe from the primary adjusted headline earnings metric. Zimbabwe materially increased volatility in IFRS attributable profit, contributing to a c.22% decline in IFRS profit; it remains a low-growth, low-return unit treated largely as a standalone entity.

Legacy Life Assurance products in decline: Older, high-cost life products within the Personal Finance segment are shrinking as customers migrate to lower-margin, digital-first savings solutions. Persistency basis changes in the Mass and Foundation Cluster negatively impacted earnings by hundreds of millions of rand, reflecting persistency deterioration and higher administration intensity on legacy books. Management is actively migrating policyholders toward the group's newer wealth and banking platforms to improve margins and customer experience.

Unprofitable investment platform terminations: Old Mutual Corporate and Africa Regions terminated unprofitable mandates, driving net client cash outflows of R21.5 billion in the 2024-2025 period as the group prioritized margin over AUM scale. These mandates showed low ROI and high operational cost, detracting from the group's 15.6% RoNAV (excluding new growth). Exiting these contracts is intended to restore new business margins toward the group's 2%-3% target range.

Key immediate consequences for the group include reduced exposure to high-risk geographies, short-term cash outflow volatility (notably R21.5bn net client outflows) and a measured improvement in portfolio capital efficiency as low-return segments are exited or migrated.

• Divestments: completed exits in Tanzania and Nigeria to eliminate low-share operations.
• Containment: Zimbabwe results excluded from adjusted headline earnings; run as standalone.
• Migration: transfer legacy life policyholders to modern wealth/banking platforms.
• Rationalization: termination of unprofitable investment mandates to restore new business margins to 2%-3%.