Old Mutual has strategy to dominate

2010-12-11 10:05

Life insurer Old Mutual SA has ­released plans to entrench its ­dominance of the industry at the expense of its major competitors, such as newly listed MMI Holdings and Liberty Life.

Old Mutual SA and Emerging Markets chief executive Kuseni Dlamini said this week that his business unit’s aggressive business strategy aimed to capture the untapped part of the insurance market.

Dlamini, who presented the business plan to his bosses on Wednesday, said the focus would be on creating and offering ­products aimed at attracting ­clients earning up to R12?000 a month.

The upper end of the white market was saturated.

“We want to develop relevant products that will respond to the dynamic and holistic needs of our potential customers,” he said.

“We are going to increase our cross-selling (offering more products to one customer) and up-selling (offering more value-added products to customers).”

Old Mutual SA is the multinational’s profit engine.

Dlamini’s comment came after a survey delivered by Finmark Trust earlier this week showed that 23% of South Africa’s adult population are principal holders of life ­insurance policies, compared to last year’s 16%.

The study did not cover the beneficiaries of the insurance policies.

Finmark Trust researcher ­Jabulani Khumalo said the ­increase in the life insurance ­uptake was partly due to the recession, which had made more people cautious with their income.

“More people are now taking up life insurance policies because they do not want their families to lose income should they die or ­become disabled,” said Khumalo.

Dlamini said Zimbabwe, Malawi, Kenya, India, Mexico, Swaziland and China presented growth ­opportunities and would generate double-digit revenues and profits.

“We are investing for growth in those countries and plan to introduce new products with an aim to attract potential customers,” he said.

He said he was not deterred by the competition that had been brought in by MMI Holdings.

“Competition is always good. It will encourage innovativeness and make us refine our customer-value proposition,” he said.

Dlamini’s business plan, however, is being delivered while there is still uncertainty about the recovery of the world economy.

“We hope the world economy will recover quickly and more jobs are going to be created and more people will afford life insurance policies,” he said.

“We are also facing a challenge in acquiring the right quality and quantity of human capital to enable us to achieve our strategic objectives.”

He declined to give any time frame for his business plan and its targets.

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