Old Mutual’s CEO resigns after facing writedowns
Jim Sutcliffe, chief executive of London-based financial services company Old Mutual, has resigned from the firm after it reported it would face heavy writedowns in its US life insurance division, US Life.
Julian Roberts has been appointed as the firm's new chief executive. Roberts has been chief executive of Skandia, the company’s European insurance subsidiary, since February 2006, and before that was group finance director of Old Mutual.
"Old Mutual is a great company with fantastic potential but also a number of challenges, which I look forward to tackling," said Roberts.
The announcement on September 7 that the US government has nationalised mortgage entities Fannie Mae and Freddie Mac resulted in a sharp fall in the preferred stock value of these companies. Old Mutual said this has led to a $135 million writedown in US Life’s portfolio holdings of this preferred stock. In addition, Old Mutual has decided it will recognise additional guarantee reserves of $155 million.
According to Old Mutual’s half-year 2008 results, pre-tax adjusted operating profit (calculated on an International Financial Reporting Standards basis) for its US Life business had reduced by 80% year on year to $12 million. The firm reported difficult credit markets over the first half of 2008 resulted in higher impairment losses and volatile equity markets increased the costs associated with the guaranteed benefits on US Life’s variable annuity contracts.
In addition, first-half results revealed US Life's fixed-income portfolio had been affected by poor economic and financial market conditions, which resulted in impairments of $149 million on 21 securities over the first half of the year, over half of which were either directly or indirectly linked to subprime credit assets or monoline insurer exposures.
See also: Washington Mutual drops CEO
US authorities step in to rescue GSEs
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on People
People: Isda taps four new directors, O’Callaghan joins CA, Berlinski quits Goldman, and more
Latest job changes across the industry
People: Citi snags Raghavan, SocGen bags Estrada, all change at NYCB, and more
Latest job changes across the industry
Kane to leave Citadel Securities for senior Miax role
Options exchange has been on a four-year acquisition spree
Asia moves: senior hires at Millennium, Citi, SMBC and more
Latest job news from across the industry
Ken Pang set to join Millennium as Asia equities head
Former Credit Suisse markets co-head joins hedge fund’s Hong Kong office
People: Risk shake-up at Santander, JPM juggles markets, and more
Latest job changes across the industry
People: UBS rejigs EQD, risk head departs; Rustad joins buy side, and more
Latest job changes across the industry
Rustad re-emerges at Taula Capital
Former JP Morgan clearing head to help prepare for Q2 fund launch
Most read
- Top 10 operational risks for 2024
- Japanese megabanks shun internal models as FRTB bites
- LCH issued highest cash call in more than five years