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  The financial information in this section relating to Old Mutual and its operating subsidiaries in South Africa has been consolidated into the audited financial statements of Old Mutual plc.

Operating profits in 2002 amounted to R3.7 billion, 12% up on the previous year. The table below contains an analysis of operating profit by activity.

With funds under management of R310.9 billion at the end of 2002, Old Mutual is South Africa’s leading asset manager. However, funds under management declined on the previous year’s R343.7 billion, mainly due to the poor performance of equity markets in 2002.

Gross premiums written by OMLACSA amounted to R33.5 billion. This figure, up by 4.8% on the previous year, is made up of single and recurring premium income from both our individual and group businesses.

The value of new business written grew by 32% with margins on
new business increasing to 29% from 26% in 2001.		  
     
 
Operating profit by activity  
Rm
2002 		 
Rm
2001
Operating profit before investment return and taxation    
Life assurance
 3 318  3 055 
Asset management 485  467 
Banking (61) (177)
Other shareholder income (1) (10)
Total 3 741  3 335 
     
Funds under management    
Shareholder funds 44 891  48 850 
Life assurance 198 511  226 248 
Unit trusts 14 304  14 931 
Third party (pension funds and other) 53 197  53 685 
Total 310 903  343 714 
     
Gross premiums written    
Individual business:    
Single 9 786  11 654 
Recurring 9 712  9 445 
Group business:    
Single 10 215  7 409 
Recurring 3 797  3 475 
Total 33 510  31 983 
     
New business premiums on a statutory basis    
Individual business:    
Single 8 624  9 812 
Recurring 1 808  1 486 
Annual premium equivalent (APE) 2 670  2 467 
Group business:    
Single 7 385  4 331 
Recurring 296  242 
APE 1 035  675 
Total APE 3 705  3 142 
 
     
  Glossary of terms
 
Operating profit before investment return and taxation: Profits earned from operating activities before the allocation of investment returns on capital and surplus assets and before tax.
Funds under management: Total investment funds managed on behalf of customers and shareholders.
Gross premiums written: Total premium income received from new and existing policyholders.
Single premiums: Lump sum amounts received.
Recurring premiums: Premiums written under a policy requiring regular monthly payments.
Total benefits paid: Amounts paid to policyholders under policy agreements due to death, disability or maturity.
Annual premium equivalent (APE): New recurring premiums written plus one-tenth of single premiums.
 
     
   
     
 
         
 
 


 

 

 

   RETURNS TO STAKEHOLDERS
 
Customers receive bonuses on policies, investment returns on market-linked products and benefit payments from life and disability insurance policies. During 2002, Old Mutual paid out R37.5 billion in benefit payments to customers compared with R33.6 billion in 2001, and declared bonuses that were in excess of market performance.
Bonuses declared
  		 
Product
Bonus rate
    2002 2001
Employee Benefits Guaranteed Fund for retirement funds  12% 15.5%(1)
Employee Benefits Genesis (after tax)  14% 13.4%(1)
Employee Benefits Coregrowth (pre-tax)  12.7% 12.6%(1)
Individual Business Flexi Smoothed Bonus Fund for taxed business (after tax)  2.0% 12.0%(2)
Individual Business Smoothed Bonus Fund for Investment Horizons, Investment Frontiers and Essential Savings (after tax)  3.0% 13.0%(2)
Inflation  14.4% 4.6%(2)
       
(1)
(2)		 Year to 30 June 
Year to 31 December   		   
 
Employees were rewarded in the amount of R1.8 billion for their contribution to the business during 2002. This includes remuneration, bonuses and employer contributions to retirement funds and medical aid. In addition, R89 million was spent on training and developing our people during the year. Comparative reward and training expenditure figures for 2001 were R1.6 billion and R83 million respectively.



Government benefits through the receipt of taxes and other levies. Old Mutual and its employees contributed significantly to the South African fiscus through the payment of R2.8 billion in taxes and levies during 2002. The figure for 2001 was R3.2 billion.

Shareholders were also rewarded by Old Mutual’s performance in South Africa in 2002.

A final dividend of 3.1 pence has been recommended by Old Mutual plc for the year ended 31 December 2002, bringing the total dividend for the year to 4.8 pence.

Dividends paid collectively to South African shareholders during 2002 amounted to R1.579 billion. 		 
         
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