Overview: Old Mutual’s new FD

Philip Broadley, FD of Old Mutual

Philip Broadley, FD of Old Mutual

Old Mutual has had an
awful year a year, but the appointment of new FD Philip Broadley earlier this
month pleased the market and helped provide a temporary boost to the Anglo-South
African insurer’s share price.

Shares in the FTSE 100 company have fallen by about two-thirds since the
beginning of the year, weighed down by concerns over bad debts at its US

What’s happened?

In September, its chief executive, Jim Sutcliffe, resigned. Meanwhile, the
company has announced around $135m (£77m) in writedowns after a sharp fall in
preference shares in Fannie Mae and Freddie Mac after the US government
effectively nationalised the mortgage giants.

Broadley – a former chairman of the Hundred Group of Finance Directors and FD
of insurer Prudential – is well-respected and seen as a safe pair of hands at a
turbulent time for the insurance industry, which has been hit hard by the credit
crunch and global economic slowdown.

He replaces Jonathan Nicholls who stepped down ‘to pursue interests outside
the life insurance sector’, according to Old Mutual.

What’s going to happen?

Founded in South Africa in 1845, Old Mutual is under pressure to consider
selling parts of its business to simplify its complex structure, leaving
Broadley little time to ease himself into his new role. There is also
speculation that Old Mutual may be broken up and sold.

The company, whose services include asset management, life assurance, banking
and general insurance services, has said that it hopes to sell Mutual &
Federal, its South African general insurer, by the end of the year.

One analyst, who asked not to be named, said: ‘If [bond] defaults pick up
Broadley will have to make some tough decisions. Does he have the capacity to
inject some more capital into the business or does he try to sell off parts of
the business?’

He added: ‘Part of the business is in emerging markets and part of it is in
developed markets. That doesn’t appeal to investors. It’s neither fish nor

One analyst described Broadley as softly spoken, determined and
authoritative. ‘He’s a safe pair of hands and in an industry that’s complex he
gives the impression that knows exactly what he’s talking about.’
Broadley will need all his powers of persuasion in his new job.

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