Julian Roberts has replaced his old boss as CEO of Old Mutual after Jim Sutcliffe fell on his sword, partly because of continuing fallout from the sub-prime crisis.

Roberts left his job as CEO of Skandia, part of the Old Mutual group, to take the chief executive position after Sutcliffe stepped down, as Old Mutual’s exposure to Fannie Mae and Freddie Mac hit home.

Roberts said that the life assurer’s first task was to get an exact idea of Old Mutual’s exposures.

‘Old Mutual is a great company with fantastic potential but also a number of challenges, which I look forward to tackling. The issue we are looking at is to get to the bottom of the exposures we have got,’ he said. ‘It’s a work in progress to understand what these exposures are.’

Shares in the two companies, which are now being propped up by the US government, have nosedived recently. Old Mutual issued a profit warning which included a £77m write-down because of its stake in the pair.

The accounting systems used at Fannie Mae and Freddie Mac were branded a ‘house of cards’ by a senior US Senator recently.

Analysts have called for a major overhaul of Old Mutual, including a possible sale of the US business, which Roberts said the company would consider after it had completed its review of the business.

The two mortgage lenders have posted four consecutive quarterly net losses, totalling a combined $10.5bn (£8.4bn) and have warned of more losses in the future. This may mean more trouble for Old Mutual further down the line, but Roberts has a distinguished background in the insurance sector.

Before taking over at Skandia, the chartered accountant had been FD of Old Mutual since August 2000. He was formerly FD of Sun Life and prior to that, he was a director and CFO of Aon UK.

Chris Collins, chairman of Old Mutual, said: ‘We are fortunate in having an executive of the calibre of Julian, who is familiar with both the industry and the company. This broad experience means he is very well qualified for the job.