Despite being an insurer, Peter Kenny said: “We don’t sell an insurance product in the UAE, we sell a redemption product.”
During a recent trip to Dubai, he and OMI’s chief risk officer met with the Insurance Authority and the SCA to “navigate through” where that product sits “relative to the IA and SCA”.
Kenny was unable to provide any details about when OMI expects to be granted a licence.
The company is based in the Dubai International Financial Centre (DIFC) and will remain there.
Tough market headwinds
Kenny was speaking to IA on the morning the insurer’s parent company, Quilter, published its annual results for 2018.
A headline figure of ‘adjusted’ profit growth of 11% to £233m ($304m, €271m) was a strong indicator that 2018 was a tough year for Quilter. It was no different for OMI.
Net client cash flow (NCCF) plummeted to £0.3bn in 2018 from £1.4bn the previous year.
Similarly, gross sales for the year were £1.8bn, down 36% from £2.8bn in 2017.
The 2017 gross sales figure, however, was “somewhat flattered”, Kenny said, by one large case accounting for £600m, which was received in 4Q17.
“We never expected such a case to be repeated in 2018; and, when you take that out, you’re really comparing £2.2bn against £1.8bn.
“Against that backdrop, we are very happy with that result, not least because of the challenging market conditions.”
He highlighted the “omni-present uncertainty of Brexit”, which saw investors mostly sit on their hands and delay making investment decisions.
A “softening of the pension transfer market and the volume and sheer impact of regulatory changes” were also big factors.
“Having to prepare our business for the Isle of Man Conduct of Business Code, the ever-changing regulatory environment in the UAE, the Insurance Distribution Directive in Europe, etc. All of those things have had an impact, to a greater or lesser extent,” Kenny said.
Remaining core and being strategic
As Quilter puts its resources and energy into building a “modern UK wealth management company”, as described by its chief executive Paul Feeney, Kenny is adamant that OMI remains a core part of the business.
“It enables Quilter to serve UK high net worths wherever they are located in the world.”
Looking to 2019 and beyond, “the strategy for Old Mutual International going forward continues to be to focus on deeper roots in the regulated markets in which we operate”, Kenny said. “And improving customer outcomes.”
In addition to Dubai and its headquarters on the Isle of Man, OMI has offices in Singapore, Hong Kong and Dublin.
The regulatory changes have not just impacted insurers, but also the advisory community.
“In recognition of that, and as a hedge against a reduction in the number of IFAs, we decided to broaden our distribution footprint by focusing on relationships with private banks, trust companies, family offices, specifically in Asia but not exclusively.
“That’s one area that we continue to focus on, broadening our distribution base.”