Old Mutual Ltd on Thursday reported a solid performance in the first quarter of 2022, with growth in sales and value of new business, however the company expects to see pressure going forward due to inflation and rising interest rates.

For the three months ended March 31, the Anglo-South African financial services firm reported a 19% increase in Life APE sales to R 2.89 billion, around £145.5 million, from R 2.43 billion the same period a year before, driven by strong risk sales in Mass & Foundation Cluster, as well as funeral sales in Personal Finance and Wealth Management.

Growth in Mass & Foundation Cluster sales also contributed to a 53% rise in the value of new business to R 464 million from R 304 million, as did higher corporate business in the Rest of Africa.

Also, gross written premiums grew 8% to R 5.47 billion from R 5.07 billion on higher renewal rates and business acquisitions in Kenya and Uganda.

However, gross flows dropped 9% to R 40.20 billion from R 44.26 billion, as a result of lower asset management flows in Old Mutual Investments, through the non repeat of large new mandates which occurred in the prior year.

As at the end of March, funds under management declined 3% year-on-year to R 1.23 billion from R 1.27 billion, as a result of market movements and a stronger rand reducing the value of funds managed offshore.

Looking ahead, Old Mutual said the global economy remains under significant pressure with rising inflation, higher interest rates and the ongoing war in Ukraine.

‘Whilst the full impact is yet to play out, we expect pressure on our customers because of higher inflation and interest rates which have continued to increase in the second quarter of 2022. We continue to monitor the impact of these factors and the declining market levels on our business,’ the company stated.

Shares in Old Mutual were up 0.7% at 60.20 pence each in London, while its Johannesburg shares were 0.9% higher at R 11.97.

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