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| Old Mutual Insure is strengthening underwriting discipline and claims management as it focuses on sustainable profitable growth in South Africa. |
Old Mutual Insure entered 2026 with stronger underwriting momentum after significantly improving profitability in 2025, as the South African insurer focused on pricing discipline, risk selection and claims management rather than pursuing premium growth at any cost. The business reported a 6.8% net underwriting margin for 2025, up from 6.2% a year earlier, while gross written premiums increased 7% to R23.4 billion.
The improvement matters because South Africa’s short-term insurance market continues to face pressure from claims-cost inflation, particularly in motor and property, alongside rising exposure to severe weather. Old Mutual Insure’s results suggest that tighter underwriting and better portfolio management can improve margins even while insurers operate in a challenging cost environment.
Premium growth has been accompanied by better margins
Old Mutual Insure’s 2025 performance represented another step up from the difficult profitability levels seen two years earlier.
| Old Mutual Insure | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Gross written premiums | R20.20bn | R21.93bn | R23.41bn |
| Net underwriting margin | 0.3% | 6.2% | 6.8% |
| Results from operations | R524m | R1.81bn | R2.06bn |
Source: Old Mutual 2025 annual results.
Gross written premiums, which represent the premiums generated before deductions such as reinsurance, rose from R21.93 billion in 2024 to R23.41 billion in 2025. At the same time, results from operations increased to R2.06 billion from R1.81 billion.
That combination is important. Premium growth alone does not necessarily indicate a healthier insurer because additional business can also bring higher claims and expenses. The improvement in Old Mutual Insure’s underwriting margin indicates that a greater proportion of the insurance business was being written at economically sustainable rates.
Pricing and risk selection are central to the improvement
Old Mutual has attributed the improvement to disciplined underwriting and pricing, together with portfolio diversification and claims-management initiatives. The company has also continued investing in digital capabilities aimed at improving operational efficiency, claims processing and customer experience.
The strategy reflects a broader challenge facing South African insurers. Rising repair costs, inflation and weather-related risks can increase the amount insurers need to pay out on policies. If premiums do not adjust sufficiently, underwriting profitability can deteriorate even when the number of policies sold increases.
Old Mutual Insure has therefore placed greater emphasis on the quality of the risks it accepts. Its 2025 results also benefited from continued expansion in specialist and alternative risk-transfer businesses, as well as acquisitions, including ONE Financial Services.
There was, however, an important qualification to the reported margin. Old Mutual said an exceptional provision related to a third-party cell within Old Mutual Alternative Risk Transfer Insure affected the second-half result. Excluding that once-off impact, the 2025 underwriting margin would have been 8.3%.
The first quarter of 2026 points to continued underwriting discipline
The early performance in 2026 provides further evidence that Old Mutual Insure is prioritising profitability.
In its June 2026 operating update covering the quarter ended March 31, Old Mutual said Old Mutual Insure achieved a net underwriting margin above its 5%–8% target range. The company highlighted disciplined underwriting, targeted claims-cost initiatives and continued improvement in portfolio quality.
Severe flooding in parts of Limpopo and Mpumalanga during the first quarter did not result in material net losses for Old Mutual Insure, according to the company. At the same time, management said market conditions were beginning to show signs of rate softening.
Rate softening is significant because it can make it harder for insurers to maintain margins. When competition increases, insurers may reduce premiums to win or retain customers. That can support volume but potentially weaken underwriting economics if prices fall faster than underlying claims costs.
Old Mutual has indicated that it would rather protect sustainable underwriting profitability than chase volume through pricing that could attract weaker risks.
What the results mean for the wider insurance market
Old Mutual Insure’s performance highlights the importance of diversification in South Africa’s short-term insurance sector.
The company operates across retail, specialty insurance, credit guarantees and alternative risk-transfer activities, among other areas. This gives it exposure to different sources of premium income rather than relying entirely on traditional personal motor and property insurance.
That diversification can help reduce dependence on any single claims environment, although it does not eliminate insurance risk. Specialist and alternative risk businesses can carry different forms of volatility, while climate-related events remain an issue across the broader market.
For customers, the strategy could have a more complicated effect. Better underwriting can support the financial strength of an insurer, but pricing decisions are ultimately influenced by claims experience, repair costs, reinsurance costs and the risk characteristics of individual customers. A stronger margin does not automatically mean premiums will fall.
The strategic test is maintaining margins as competition changes
Old Mutual’s broader 2025 strategy placed greater emphasis on competitiveness in its South African businesses, disciplined capital allocation and growth that generates sustainable returns. Old Mutual Insure has become one of the stronger contributors to that strategy, with its operating performance helping support the group’s overall results.
For 2025, Old Mutual reported group results from operations of R9.8 billion, up 13%, while adjusted headline earnings rose 24% to R8.3 billion. The company specifically identified improved performance in Old Mutual Insure and Wealth Management as contributors to the group’s stronger performance.
The key issue going forward is whether Old Mutual Insure can preserve its improved underwriting economics if market pricing becomes more competitive. The company has already signalled that rate softening is emerging, making portfolio quality, claims management and disciplined pricing increasingly important.
For the insurer, the next phase is therefore less about simply increasing premiums and more about ensuring that growth continues to generate acceptable returns. That distinction will be particularly important as South Africa’s insurance market balances competitive pricing against rising claims and operating costs.
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