(NAIROBI, KENYA) – Old Mutual Holdings net profit rose to KES 882 million (about $6.7 million / £5.3 million / €6.2 million) in the half year to June 2026, exceeding its 2025 full year earnings in six months, driven by the benefits of disposing of underpriced medical customer accounts.
Underpriced customer accounts in insurance refer to policyholders whose premium payments are lower than the true level of risk they pose to the insurance company. The insurer’s net profit was 176 times the KES 5 million (about $38,000 / £30,000 / €35,000) posted in a similar period last year and more than the KES 856 million (about $6.5 million / £5.1 million / €6 million) it recorded in the 12 months ended December 2025.
Management disclosed that the insurer enjoyed a 2.8% profit margin from its medical business this year, the first time it had a positive return since 2023 from the underwriting business, citing repricing of its business.
Underpricing of customer accounts marks the cutthroat competition in the industry, resulting in quoting lower prices than the cost of managing the customer’s medical expenses when they arise.
“We have now priced the portfolio properly on a case by case basis, and really at the end of the day some people said we are expensive and went to get service from somewhere else. But we were okay with that because we were losing money on some of the accounts,” Old Mutual Holdings chief executive officer Arthur Oginga said.
The repricing saw the insurer record underwriting profit of KES 287 million (about $2.2 million / £1.7 million / €2 million) compared to a loss of KES 303 million (about $2.3 million / £1.8 million / €2.1 million) in the previous reporting period despite its insurance revenues remaining flat at KES 16.3 billion (about $124 million / £98 million / €114 million).
The insurer’s operating costs grew by 5%, which was attributed to renegotiation of supply contracts. Some of the renegotiated contracts include those with pharmaceutical companies on the price of drugs, especially for chronic disease patients.
“We are also using artificial intelligence in managing fraud and waste,” Mr Oginga said.
Old Mutual reported a 69% fall in confirmed fraud losses compared to the similar period last year, with KES 60 million (about $457,000 / £360,000 / €420,000) of attempted fraud prevented in the first half of the year.
The insurer had an investment income of KES 3.1 billion (about $23.6 million / £18.6 million / €21.7 million), a 26.1% drop from the KES 4.1 billion (about $31.2 million / £24.6 million / €28.7 million) earned in the previous review period.
Its asset management business recorded a 34.4% growth in commissions earned to KES 1.37 billion (about $10.4 million / £8.2 million / €9.6 million) following a 32.4% rise in its portfolio to KES 192 billion (about $1.46 billion / £1.15 billion / €1.34 billion).
Old Mutual has also been repositioning its regional business by exiting the South Sudan and Tanzania markets while increasing its focus in Uganda. The insurer appointed Edith Jiya as its chief executive officer in Uganda to spearhead the consolidation of its three businesses in the market, covering insurance, investment and wealth management.
The appointment of Ms Jiya, who has previously served as chief executive of Malawi, also signals the transition of Uganda to a standalone market reporting to South Africa.
The insurer’s board of directors did not recommend an interim dividend. Old Mutual is in the process of using a portion of its share premium, KES 4.6 billion (about $35 million / £27.6 million / €32.2 million), to wipe out part of its KES 7.5 billion (about $57 million / £45 million / €52.5 million) accumulated losses so as to return to dividend distribution.
Besides the balance sheet restructuring, the insurer is also disposing of its properties in the region valued at over KES 19 billion (about $145 million / £114 million / €133 million) to unlock cash for business, repayment of its debts and distribution to shareholders. Management disclosed that it was in negotiations with possible buyers for its Old Mutual Towers located in Upper Hill, Nairobi.