Old Mutual Plc, Africa’s biggest insurer, said first-quarter life insurance sales held at 269 million pounds ($418 million), missing analysts’ estimates, as regulatory changes in the U.K. hurt savings inflows.
Life insurance revenue, taking into account exchange rate fluctuations, missed the 272 million-pound average estimate of 15 analysts surveyed by the company. Fund sales dropped 3 percent to 3.32 billion pounds from a year earlier, London-based Old Mutual said in a statement today. Analysts had forecast 3.24 billion pounds.
“The continued uncertainty around new regulations has had an impact on distribution in the U.K.,” 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 U.K. after cutting costs, selling assets and paying down debt to return to profit after the financial crisis. The U.K. 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 percent to 288.4 billion pounds, boosted by rising equity markets and higher inflows into its U.S. and African business. That beat analysts’ estimate of 276.9 billion pounds.
The insurer set aside 5 billion rand ($560 million) to buy stakes in firms selling life insurance and savings products to Africa’s growing middle class, Roberts said in March.