LONDON (Reuters UK) - Old Mutual (OML) said operating profits at its U.S. asset management and life businesses are running below their 2007 levels as a result of tougher markets, sending its shares lower on Wednesday.
In a statement South Africa's largest insurer (OMLJ) said that while its U.S. asset management business had positive net client cashflow, its adjusted operating profits are running a little over 10 percent below the 2007 rate.
The unit made $324 million (164.7 million pounds) for the full year in 2007, the company said.
Old Mutual's U.S. life business will also take charges of $60 million to $70 million to bolster its reserves to meet guarantees it has made in policies. It said underlying operating profit for the first half is likely to be in the range of $130 million to $140 million.
The company has shaken up the management of its U.S. businesses, appointing new heads of both its life insurance and asset management units. The company is holding a presentation for analysts and investors on these businesses later on Wednesday.
Old Mutual shares in London slid 3.3 percent to 95 pence at 8:18 a.m., among the FTSE 100's biggest fallers. The company's shares already trade at the lowest multiple in the sector, with a price to embedded value of 0.7 times versus a UK insurance multiple of 0.9 times.
(Reporting by Simon Challis; Editing by David Holmes)
