2019 INTERIM RESULTS AGENDA 1 Iain Williamson, Interim Group H1 - PowerPoint PPT Presentation

2019 INTERIM RESULTS

AGENDA 1 Iain Williamson, Interim Group H1 2019 OVERVIEW CEO 2 2019 INTERIM RESULTS Casper Troskie, Group CFO 3 Iain Williamson, Interim Group CONCLUDING REMARKS CEO 4 Q&A 2

H1 2019 OVERVIEW Strong financial Operational Optimisation of Distributions to effectiveness balance sheet shareholders delivery • AHE up 10% from • 122 Bots have • New debt of • Interim strong investment saved 2.8 million R2 billion at dividend of returns minutes of improved rates 45 cents per processing time • RFO up 2% from share • R4.9 billion of profit growth in • Old Mutual share buybacks PF and RoA Protect in pilot in 2019 and being rolled • On track to save • Sale of Latin out R1 billion America completed Delivery continues in a sustainable and responsible way 3

IMPACT OF THE SOUTH AFRICAN MACRO ENVIRONMENT Equity market levels - SWIX Impact on our business 13 500 13 000  Average market levels have not 12 500 recovered to H1 2018 levels 12 000  Although SA equity markets are up 7% in 11 500 11 000 H1 2019 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 YTD 2019 Real GDP Growth 1 and Inflation 2 % Impact on our customers 4.7% 4.5% 4.5% 4.4%  Low GDP growth adversely impacting RFO Target job creation 0.8% of nominal 0.7% GDP + 2% N/A  Pressure on levels of disposable income Real GDP and reduction in propensity to save Inflation (3.2%) FY 2018 Q1 2019 Q2 2019 FY 2019F 1. Real GDP growth is seasonally adjusted and calculated on a quarter-on-quarter (QoQ) annualised basis, Q2 2019 data not released yet 2. Inflation is reflected on a quarterly basis 4 Source: Bloomberg, SARB, IMF

OVERVIEW OF THE REST OF AFRICA MACRO ENVIRONMENT Zimbabwe Kenya Real GDP Real GDP growth and inflation 2,3 Equity market levels 1 Inflation % 700 6.0% 5.8% 5.8% 5.7% 5.7% 600 5.6% 500 4.4% 400 300 200 100 N/A 0 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 FY 2018 Q1 2019 Q2 2019 FY 2019F Real GDP growth and inflation 2,3 Nigeria Real GDP Real GDP % Real GDP growth and inflation 2,3 Inflation 175.7% Inflation % 11.4% 11.4% 11.3% 11.1% 66.8% 42.1% 3.5% 2.9% N/A N/A 2.4% 2.3% 1.8% -5.2% N/A FY 2018 Q1 2019 Q2 2019 FY 2019F FY 2018 Q1 2019 Q2 2019 FY 2019F 1. Equity market level represents the Zimbabwe Industrial Index 2. Real GDP growth is not seasonally adjusted and is calculated on a year-on-year (YoY) basis. 3. Inflation is reflected on a year-on-year (YoY) basis 5 Source: Bloomberg, IMF, Focus Economics

OUR STRATEGY 1. Defend and grow SA market share in Mass and Corporate markets Meet the core needs of  our customers every day 2. Defend and grow 8. Cost efficiency in SA Personal leadership ACCELERATE GROWTH Finance market Become a digital  platform business Service unique needs STRENGTHEN THE  7. Refresh the 3. Improve the of customers through competitiveness of Wealth technology FOUNDATION and Investments analytics offering Drive a culture of  delivery 6. Win the war 4. Continued turnaround for talent of Old Mutual Insure Social upliftment in the  communities we operate in 5. Turnaround East African business and improve returns across Rest of Africa 6

TECHNOLOGY REFRESH Customer lead Simplified estate Always on We focus on helping our We simplify our estate to be We focus on delivering an business deliver a better nimble, more cost efficient always-on service, based on experience for end customers and more flexible in order to cost-effective but highly and intermediaries meet our current and future stable infrastructure and business demands service 122 Bots in place assisting  5 to 1 Fund Merge in Old Deliberate focus on   with process automation Mutual Unit Trusts to reducing our downtime saving 2.8 million minutes in improve operational threshold by 50% from H1 processing time efficiencies, save costs and 2018 – consistently provide better options to achieved in H1 2019 Continued roll out of digital  customers tools to enhance customer Tools implemented to  experience Continue to reduce detect and pro-actively  complexity through respond to potential Old Mutual Protect in pilot  consolidation of our performance issues and being rolled out in systems and promoting 2019 new ways of working 7

H1 2019 - ROBOTICS HIGHLIGHTS

DEFEND AND GROW SA MARKET SHARE IN MASS MARKET +9% -6% 18,073 2,142 Commendable performance in tough environment 2,019 16,518 Life APE sales down due to lower productivity  H1 2018 H1 2019 NCCF growth driven by savings inflows and  growth in life in-force book Loans and advances Life APE sales Loans and advances up 9% showing good growth (Rm) 1 (Rm) with an expected increase in credit loss ratio from a low base -1% -12% Launched FutureInvest product range improving 1,534 655 1,512 579 customer value proposition H1 2018 H1 2019 Live interface with home affairs and real time claims validation through use of robotics RFO VNB (Rm) (Rm) 9 1. Comparative period is December 2018.

DEFEND AND GROW SA MARKET SHARE IN CORPORATE MARKET +24% -3.1 1,793 0.8 Strong Life APE sales with healthy pipeline of flows 1,451 Life APE sales up 24% with growth in recurring  premiums driven by umbrella fund sales H1 2018 H1 2019 Single premium flows down 26% led to a  Life APE sales -2.3 decline in NCCF, but we expect future flows (Rm) NCCF from secured umbrella deals subject to section (Rbn) 14 transfer process +2% -35% Lower VNB as full margin not yet recognised  for umbrella fund deals subject to section 14 870 168 854 transfer process 109 H1 2018 Continued improvement in underwriting H1 2019 experience in the group life assurance RFO VNB (Rm) (Rm) 10

DEFEND AND GROW IN SA PERSONAL FINANCE MARKET +2% +0.2 Recovery of profits in a tough environment 1,242 1,221 Life APE sales up 2% due to growth in recurring  premium risk and savings sales H1 2018 Profit improvement largely due to improved  H1 2019 mortality and morbidity experience -1.6 -1.8 Life APE sales (Rm) NCCF Growth in NCCF due to lower claims and fewer (Rbn) maturities as legacy book runs off +34% +3% Distribution channels generated gross flows of over R33 1,227 103 100 billion for the Group , contributing R17.4 billion to Wealth and Investments and R2.6 billion to Old Mutual 918 Corporate H1 2018 Advisor application launched in August 2019 to H1 2019 improve interaction with advisers and streamline communication in a cost efficient manner RFO VNB (Rm) (Rm) 11

IMPROVE THE COMPETITIVENESS OF WEALTH AND INVESTMENTS -14% Investor sentiment putting pressure on flows -8.3 10.9 Gross flows down 14% due to shift to income 45.1  38.8 type solutions Annuity revenue up 2% in line with Average  2.6 AUM increase of 2% H1 2018 H1 2019 Gross flows NCCF Restructuring and rationalisation activities in asset (Rbn) (Rbn) management led to lower profits with benefits expected to emerge in future profits +5% -9% R4.2 billion of assets originated by OMSFIN in tough 783 763 724 710 environment Digital enablement for advisers through a mobile application H1 2018 H1 2019 RFO AUM (Rm) (Rbn) 1 1. Comparative period is December 2018. 12

H1 2019 - INVESTMENT ACTIVITY

CONTINUED TURNAROUND OF OLD MUTUAL INSURE +14% -21% 370 Strong top line growth, catastrophe claims 7,198 reduced underwriting margin 6,293 294 CATS GWP growth across all lines of business and  RFO 153 growth from strategic partnerships H1 2018 H1 2019 141 Catastrophe losses below the reinsurance  threshold compared to benign environment GWP RFO in 2018 (Rm) (Rm) Decrease in underwriting result driven by higher - 6.9 -97% claims experience and catastrophe losses 7.1 300 Underwriting margin below target of 4%-6% and expected to partially recover in H2 2019 H1 2018 8 0.2 H1 2019 Underwriting result Underwriting margin (Rm) (%) 14

TURNAROUND IN EAST AFRICA AND IMPROVED RETURNS ACROSS ROA +12% +7% Strong RFO growth across all regions driven by top line 1,682 3,917 growth 3,666 1,505 Southern Africa – profit growth due to strong unit  trust inflows in Asset Management and good H1 2018 performance in the Banking and Lending H1 2019 business GWP Loans and advances (Rm) (Rm) 1 East Africa – strong unit trust inflows and Life APE  sales with improved underwriting experience in Property and Casualty West Africa – improved financial performance +282%  RFO by region (Rm) but continued focus on operational turnaround through restructuring 214 -54 -94 214 Zimbabwe – excluded from Group key metrics for 0 2018 and 2019 periods and hyperinflation accounting 362 56 applied under IFRS RFO Southern Africa - Ex Zim West Africa (Rm) East Africa Central Expenses 15 1. The % change has been calculated with reference to FY 2018.

FINANCIAL REVIEW Casper Troskie

FINANCIAL DELIVERY IN H1 2019 AHE RoNAV Free surplus Group solvency RoEV R5,211 16,4% R3,739 166% 11.7% million million Up 10 % Reflecting Free cash Remains well Higher reflecting higher levels within target investment more than higher of covering range return and shareholder shareholder dividend improved investment cash experience payments returns in SA variances Supporting returns to shareholders Supporting returns to shareholders 17