Mupita is in it for the long haul

2012-03-17 08:40

Ralph Mupita, the recently appointed chief executive of Old Mutual’s emerging market operations, is a man for the long haul.

Contrary to industry rumour that he wanted to quit when he was passed over for the top job, which went to a company outsider, he says he never intended to leave. His decision to stay has paid off.

Now Mupita, who took over from Kuseni Dlamini earlier this year, has an ambitious plan to make the life insurer a formidable player in rapidly-growing emerging markets such as Nigeria, India, and China.

In keeping with his other passion as an ultra long-distance runner, he has hit the road running since his appointment two months ago.

Very few people are surprised that Mupita has gone on to occupy Dlamini’s plush office at Old Mutual’s head office in the swanky financial suburb of Sandton.

Mupita has been one of the company’s rising stars and his elevation came after Dlamini unexpectedly quit in January.

Dlamini had been at the helm for more than two years.

Before Dlamini moved from Anglo to Old Mutual in 2009, Mupita and Thabo Dloti, then the head of Old Mutual’s asset management unit, were tipped as front-runners to replace Paul Hanratty, who was the chief executive of Old Mutual SA.

Dloti has since joined Stanlib as chief executive.

Mupita, who has been running Old Mutual’s emerging markets life and savings business, decided to stay despite wild rumours that he too wanted to abandon the Old Mutual ship.

“I was not going to leave. The rumour that I planned to leave was certainly not from myself. I worked with Kuseni on the emerging markets strategy. I will continue implementing the strategy.”

Mupita says he has never had bad feelings about Dlamini’s appointment and the criticism that an insurance insider should have been appointed ahead of Dlamini, a mining man, is misplaced.

“I don’t think it was a mistake to appoint Kuseni. Kuseni has reshaped the business from an African focus to an emerging market focus.

“Sometimes you need an outsider, who comes in and looks at things differently,” says Mupita.

He still maintains a close friendship with Dloti.

“We are both ultra-marathon runners. We have a common love for long-distance running. We also talk a lot about our kids,” Mupita, a trained engineer, says.

His immediate task is to grow Old Mutual’s African business, particularly its operations in east and west Africa.

The life insurer and savings group is currently in seven African countries including Kenya, Nigeria, and Zimbabwe.

 Outside of Africa, it has operations in Colombia, Mexico, India and China.

Zimbabwe – Mupita’s native country – is still a substantial contributor to the business despite its political and economic strife.

“Our profit engine outside of South Africa is Zimbabwe. It contributes about 5% to Old Mutual SA’s profits and 50% of the profits we make in Africa, come from Zimbabwe. In the late 1990s, Zimbabwe used to contribute about 15% to Old Mutual’s SA profits,” he reveals.

He wants to use Nigeria as a springboard for Old Mutual’s expansion to the rest of west Africa, particularly Ghana. Kenya will be utilised to spread Old Mutual’s tentacles to other east African markets like Burundi, Rwanda, South Sudan, and Tanzania. Old Mutual is in the process of acquiring Nigerian life insurer Oceanic Life from Nigerian lender Oceanic Bank.

Mupita says Africa holds enormous opportunities because insurance penetration is very low.

“Asia was like Africa 25 years ago, it had low levels of insurance penetration,” he says.

In the long run, he believes that mobile phone companies and low-cost lender Capitec may pose a threat to Old Mutual’s dominance.

“We respect our traditional competitors, but we think over time the real competition is going to come from non-traditional players like Capitec and mobile phone providers like MTN and Vodacom,” Mupita says.

One of the criticisms that crop up is Old Mutual’s poor acquisition record. It has bought companies at high prices, only to dispose of them a loss.

Mupita admits that mistakes have been made, but he says that the acquisition of Swedish savings group Skandia by Old Mutual in 2005 for $6.5 billion (about R50 billion) delivered the goods.

“Let’s not put a lipstick on a gorilla. We have made acquisitions that weren’t fantastic. But Skandia has been the most transformative acquisition. We have made a 45% return on Skandia,” he says.

In March 2000, Old Mutual bought Gerrard, a UK wealth management business, for £525 million (about R6.3 billion) but sold it for £210 million. It also acquired US Life for $600 million, but sold it for $350 million.

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