Robert Prevost was only given a 2% chance of becoming pope. In contrast, as soon as Iain Williamson announced he was stepping down as Old Mutual CEO, there was just one serious candidate.
Jurie Strydom was licking his wounds after losing the tug-of-war with Paul Hanratty to become Sanlam group CEO. Old Mutual quite sensibly found him a berth on its board as a nonexecutive director. Playing a kind of fantasy football, there might have been better candidates than Strydom, such as Discovery CEO Adrian Gore or Momentum CEO Jeanette Marais. And some equally good, such as Anton Gildenhuys, who took over from Strydom as head of long-term savings at Sanlam.
But all three have jobs at companies that are much more successful than Old Mutual. Strydom, on the other hand, is the main shareholder in a fintech, FSPHub, and otherwise devotes most of his time to charity. He was keeping a low profile and shrewdly showing no visible signs of ambition, though he clearly still has deep reserves of energy and hopes to contribute a lot more to the life insurance sector. He steps down from the FSPHub board. There won’t be the conflicts of interests that made the reign of his predecessor-but-one, Peter Moyo, so disastrous.
At 49, with more than a decade until retirement, Strydom is the right age to take the CEO job. His main challenge will be to fit into Old Mutual’s notoriously insular culture. Big Green has a market capitalisation about one-third of archrival Sanlam’s, and barely half that of new kid on the block Outsurance. But many Mutual executives who talk to the FM still demonstrate a “Crisis? What crisis?” complacency.
His main challenge will be to fit into Old Mutual’s notoriously insular culture
It is an indictment of Old Mutual’s succession planning that there was nobody in the C-suite who was prepared to take the job. Kerrin Smith, the capable head of personal finance and wealth management — the core life business — tells the FM the CEO job is not at all tempting to her. Clarence Nethengwe, the obvious internal BEE candidate, recently took over as head of OM Bank — a huge challenge in its own right. The former head of investments, Khaya Gobodo, is now CEO-designate of Telesure, which owns the Auto & General and Hippo brands.
Even though Strydom was part of the Sanlam executive committee that decided not to set up a bank, it would be very surprising if he canned the bank now that it has been launched. While there are too many banks in South Africa, OM Bank is a sunk cost now, and it will be an important distribution channel in the mass and foundation market. If it keeps costs low, maybe it can take market share from the big four banks and even Capitec.
Mass and foundation is one area in which Old Mutual remains strong and respected. When it comes to asset management and unit trusts, Strydom has the option of following Hanratty. He could sell Old Mutual Investment Group to one of the independent managers (Coronation’s name has come up), while keeping the good parts of the investment cluster: Futuregrowth (a first-rate fixed-income manager) and Old Mutual Alternative Investments.
Life insurers, with their bureaucratic culture, usually give mediocre investment returns. Old Mutual has sold its global investment businesses and retains just a domestic equity rump. Strydom knows only too well that the core skills of life offices are underwriting and distribution, not asset management.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.