Life Insurance Licence
Old Mutual PLC
10 January 2001
LIFE INSURANCE LICENCE AWARDED IN INDIA
Old Mutual plc ('Old Mutual') announces that OM Kotak
Mahindra Life Insurance ('OMKM'), its joint venture with
Kotak Mahindra Finance Ltd ('KMFL'), has received a licence
from the Insurance Regulatory and Development Authority
('IRDA') to commence life insurance business in India.
Old Mutual will initially own 26% of the share capital of
the company and KMFL and its affiliates 74%. The total
capitalisation of the company will be R1,500 million
(£22.25million, R232 million). Old Mutual is a London
listed financial services group with a substantial life
assurance business in South Africa and an international
portfolio of activities in asset management, banking and
general insurance. Old Mutual has approximately £190bn
assets under management.
KMFL is one of India's leading financial services companies,
with operations covering asset management, investment
banking, securities trading and research and auto and
consumer finance.
The new venture brings together the complementary skills of
Old Mutual in developing and introducing innovative products
and the strong distribution capability of KMFL. The first
product launch is targeted for April 2001. OMKM anticipates
being able to develop rapidly in the deregulated Indian
market for life assurance, which is expected to grow
substantially over the next decade.
OMKM will be headquartered in Mumbai and operate nation-
wide. The Chairman is Uday Kotak of KMFL and the Deputy
Chairman is Hasan Askari of Old Mutual. A dedicated
management team has been appointed - including Andrew
Cartwright, previously with Old Mutual in South Africa, as
the appointed Actuary and managers of Finance, Technology
and Marketing.
Old Mutual CEO Life, Jim Sutcliffe said:
'This is an excellent start to 2001. We and our partners
are already well advanced in planning the launch of our
first products into the Indian market - one of our key
international emerging markets growth opportunities for
insurance and financial services. Our team is already in
place and excited by the opportunity and challenges.'
Kotak Mahindra Chairman, Uday Kotak, said:
'We are delighted to have been awarded the licence. We are
committed to playing a key role in the development of the
life insurance business in India and look forward to the
opportunities ahead.'
For further information please contact:
Old Mutual plc
Hasan Askari, Director Developing Markets
+44 (0) 20 7569 0100
+44 (0) 7785 307 759
Hasan.askari@omg.co.uk
James Poole / Anna Quenby, Investor Relations
+44 (0) 20 7569 0100
Bruce Allen, Media Relations South Africa
+27 (0) 21 509 2732
Kotak Mahindra Finance Ltd
Shivaji Dam
+91 22 285 4650
Shivajid@kotakmahindra.com
College Hill Associates
Nicholas Williams / Gareth David
+44 (0) 20 7457 2020
NOTES TO EDITORS
OLD MUTUAL PLC
Old Mutual plc is an international financial services
company based in London, with expanding operations in life
assurance, asset management, banking and general insurance.
Following demutualisation in May 1999, it is listed on the
London Stock Exchange with a market capitalisation at 8
January 2001 of approximately £5.9 billion. It is also
listed in South Africa, Namibia, Malawi and Zimbabwe. In
addition to the joint venture with Kotak Mahindra to
establish a new life assurance operation on the Indian sub-
continent, Old Mutual also has plans to develop
international life assurance and long term savings
operations in Europe and North America, as well as in the
UK.
Financials for the six months ended 30 June 2000
*Operating profits based on a long-term investment return
increased 61% to £457m.
*Operating earnings per share based on a long-term
investment return rose 50% to 9 pence.
*Total funds under management increased 23% to £55.1 billion
from £44.9 billion at December 1999.
*Continuing life assurance operating profits based on a long-
term investment return rose 26% to £249 million.
*Banking operating profits increased 59% to £156 million.
Key Businesses:
Life Assurance
In southern Africa, Old Mutual provides life, disability,
health, retirement savings and investment products to
individuals and groups. With over 3.2 million policyholders,
Old Mutual has approximately 30% of the life assurance
market in South Africa.
The development of a fully integrated eCommerce capability
is a strategic priority. During the past six months, Old
Mutual has extended its partnerships in networks and
systems, working with Nedcor and Dimension Data, including
joint investments in Internet Solutions, a leading South
African corporate internet service provider, and Miraculum,
a business-to-business electronic marketplace.
Old Mutual International is the offshore and international
investment subsidiary providing individually tailored
offshore investments, life assurance and unit trusts from
product companies based in Guernsey.
On 2 August 2000 Old Mutual announced a joint venture with
Kotak Mahindra Finance Ltd, one of India's largest financial
services companies, to establish a life assurance business
in India.
Asset Management
Old Mutual Asset Managers provides a multi-country asset
management capability with global investment and asset
management expertise. Old Mutual Unit Trusts is the leading
unit trust provider in South Africa.
On 31 March 2000, Old Mutual completed the acquisition of
Gerrard Group plc, parent company of Greig Middleton. On 10
May 2000, Old Mutual's subsidiary, Albert E Sharp
Securities, and Greig Middleton's institutional and
stockbroking businesses, merged to form Old Mutual
Securities, which focuses on the growth sector of corporate
and advisory services for smaller and medium sized UK and
European companies.
Old Mutual's private client businesses, Greig
Middleton/Capel Cure Sharp, is one of the leading providers
of portfolio management and stockbroking services to high
net-worth individuals in the UK.
GNI, the leading derivatives house in London and Europe, is
Old Mutual's specialised broking and derivatives market
subsidiary.
On 26 September 2000, Old Mutual plc acquired United Asset
Management Corporation, one of the largest investment
management organisations in the world, increasing the
group's total assets under management to approximately
$275bn (£190bn).
On 20 November 2000, Old Mutual announced it was embarking
on a phased restructuring of the UAM Group with the
acquisition of additional revenue streams from Pilgrim
Baxter, the major US mutual funds franchise.
Banking
Old Mutual's banking business is conducted principally by
Nedcor, in which the company has a 53.5% controlling
interest. Nedcor is the highest rated bank listed on the JSE
Securities Exchange South Africa. Its activities include
retail, commercial, corporate and investment banking and
asset management, with more than 2.4 million banking
customers. On 20 September 2000, Old Mutual and Nedcor
strengthened their partnership with Dimension Data Holdings
plc, a global network services company listed in London. In
July 2000, Nedcor acquired FBC Fidelity Bank, which is being
merged with Peoples Bank to create the biggest empowerment
bank in South Africa.
General Insurance
Old Mutual holds a 51% controlling interest in Mutual &
Federal Insurance Company, which writes motor, fire,
accident, engineering and marine business. M&F is one of
the largest general insurers in South Africa. It is listed
on the JSE Securities Exchange South Africa, with operations
in South Africa, Namibia, Botswana and Zimbabwe. On 17
October 2000, it completed its acquisition of CGU Holdings
Ltd for £115 million.
Website address: www.oldmutual.com
KOTAK MAHINDRA FINANCE LTD
Key Points
Amongst the top three in all its businesses.
Consistent Credit Rating of AA+ or higher.
Caters to over a million investors.
Provides financial solutions to over 800 large and mid sized
corporates.
Over 60,000 shareholders and half a million depositors
across 32 Indian cities.
Ranked the most trusted securities house in India for FY
1996 by 'Euromoney'.
Ranked as No 2 investment banker in 1998 and 1999 by Prime
database (based on amount raised).
Companies
Each of the companies within the Kotak Mahindra Group
specialises in particular sectors of the financial services
market. The main companies include:
Kotak Mahindra Finance Limited: corporate and consumer
finance.
Kotak Mahindra Capital Company: investment banking.
Kotak Securities: brokerage and distribution.
Kotak Mahindra Primus Limited: auto-finance.
Matrix Information Services Limited: online information
services.
Kotak Mahindra Mutual Fund: mutual funds.
KMFL Financials
Kotak Mahindra Finance Ltd's networth increased to about Rs
4750 million (£68.3 million) as on 31 March 2000. KMFL
posted for the year 1999-2000 a record Profit Before Tax
(PBT) of Rs 906 million (£13 million) (P.Y. Rs 345.8 million
/ £5 million) and a Profit After Tax (PAT) of Rs 611 million
(£8.8 million) (P.Y. Rs 121.8 million / £1.75 million).
History
1985 Kotak Mahindra Group began as Kotak Capital
Management Finance Limited
1986 KMFL enters the lease and hire purchase market
1990 Auto-finance division started
1991 Investment banking division started
1992 Enters the fund syndication sector
1995 Brokerage and distribution businesses incorporated into
a separate company, Kotak Securities. Investment
banking division incorporated into a separate company,
Kotak Mahindra Capital Company.
1996 Auto finance business hived off into a separate
company, Kotak Mahindra Primus Limited. They take a
significant stake in Ford Credit Kotak Mahindra Limited
for financing Ford vehicles.
1997 Launch of Matrix Information Services Limited marks the
group's entry into information distribution.
1998 Enters the mutual fund market with the launch of the
Kotak Mahindra Asset Management Company.
Website address: www.kotakmahindra.com
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