Old Mutual to gain from UK pension overhaul: CEO

UK pension reform will benefit Old Mutual: CEO

Anglo-South African financial group Old Mutual is set to be a "beneficiary" of the U.K.'s upcoming pension system overhaul, its CEO told CNBC on Thursday.

Britain's Chancellor of the Exchequer George Osborne announced in his March budget that retirees would be offered more investment choices for their savings. In particular, compulsory annuities, which pay out a steady income for life, will be scrapped.

Julian Roberts, CEO of Old Mutual, told CNBC that the company would benefit from the pension reforms because it does not write annuities, but does offer other investment products that pensioners will now be able to tap.

"People don't have to take their money out of their pension schemes and buy annuities and we are one of the beneficiaries of that," Roberts told CNBC.

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HIs comments come after FTSE 100-listed Old Mutual posted its first quarter results. It reported gross sales of £6.2 billion ($10.4 billion) for the quarter, up 24 percent from the same period last year.

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Old Mutual Wealth, the company's arm that deals with investment and retirement products, saw gross sales up 28 percent in the first quarter from the same period last year.

Critics of the U.K.'s new pension plans have said retirees could be left vulnerable to poverty if they spend irresponsibly after taking money from their pension pot. But Roberts said this thinking underestimated people's ability to choose what they wanted to do with their savings.

"There are some people who are going to turn around and say, 'I am worried about the future income;' they will buy annuities," he said.

"There are many other people who will turn around and say, 'Actually I want to manage my pension fund, I want to drawdown from that, I want to carry on investing in it, and I don't want to buy an annuity.' Why shouldn't they have that choice?"

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Africa expansion

Old Mutual's strong results were buoyed by strength in its emerging markets division, which saw gross sales increase 18 percent to £2.3 billion in the first quarter of 2014. This was driven by strength across Africa.

The company announced it had completed the acquisition of a Kenyan micro-finance company called Faulu and was eyeing further opportunities in East and West Africa.

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Roberts said Nigeria was particularly attractive, with a growing economy and a still-small insurance sector.

"I think Nigeria, you can tell from all the stats, GDP growth is very strong, that economy is growing, will be larger and larger and larger. The insurance industry is really tiny in Nigeria, there's a great opportunity for companies that have got the skill sets, and we want to be one of them," Roberts told CNBC.