A deliberate decision to walk away from loss-making business has started paying off for Old Mutual Holdings PLC, with the group recording a sharp improvement in earnings in the first six months of 2026.
The financial services company posted Sh882 million in profit after tax for the period ended June, compared with Sh5 million in the same period last year, as improved insurance results, stronger asset management and tighter spending helped lift its performance.
The group’s recovery came even as insurance revenue edged down to Sh16.316 billion from Sh16.395 billion recorded in the first half of 2025.
Old Mutual, however, managed to turn its insurance service result around, moving from a loss of Sh303 million in the previous year to a profit of Sh287 million in the latest period.
The improvement follows a strategy that has seen the group reduce its exposure to businesses that have been weighing on earnings, particularly medical insurance, while putting more resources into areas with better returns.
Group Chief Financial Officer Isaiah Gakonyo said the changes were beginning to deliver results when he spoke during Old Mutual’s 2026 half-year results announcement at Serena Hotel in Nairobi on August 28, 2026.
“From a profit before tax perspective, we recorded a 360 percent increase compared to last year. That number at the same time last year was 380 million. So very proud of the effort and the benefits we see of those deliberate efforts that are being put in to address our performance,” Gakonyo said.
Profit before tax rose to Sh1.756 billion from Sh380 million, representing a 360 percent increase over the previous year.
Profit after tax attributable to shareholders of the parent company stood at Sh458 million, while total comprehensive income increased to Sh818 million from Sh99 million.
The company’s basic earnings per share also recovered, rising to Sh2.17 compared with a loss of Sh1.21 reported a year earlier.
Old Mutual Group Chief Executive Officer Arthur Oginga said the company was no longer placing as much emphasis on expanding volumes if such growth did not translate into better returns.
“Our focus is on improving margins. We have shifted from volume-led growth to value-led growth across our core businesses, and this has helped us improve profitability,” Oginga said.
The approach has seen the group slow down growth in medical insurance, which has been a loss-making area, while giving greater attention to life insurance, asset management and other businesses with stronger margins.
The change has also helped increase commission, fees and other income, which climbed to Sh1.639 billion from Sh1.202 billion.
Funds under management grew by 32 percent during the period, supporting the increase in income from the group’s asset management operations.
Investment income moved in the opposite direction, falling to Sh3.101 billion from Sh4.199 billion as market yields declined during the period.
Old Mutual said it was able to maintain a resilient investment performance through diversification, careful liquidity planning, selective investment in assets offering higher returns and matching its assets with its liabilities.
Beyond its financial results, the group is stepping up the use of technology to change how it serves customers and manages its operations.
Its Thrive wellness application had registered 242,878 users by June, with the company saying the growing uptake of digital services was helping it interact more effectively with customers.
The group has also expanded its use of artificial intelligence in areas such as assessing claims, identifying fraud and handling customer service.
“AI is no longer an experiment at all. It's becoming a portrait of medicine that improves customer outcomes, operational efficiency, and business performance,” Oginga said.
Old Mutual reported a 69 percent drop in unfarmed fraud losses during the period and said its systems helped stop attempted fraud worth more than Sh60 million.
The stronger performance was also reflected in the group’s financial position, with total assets rising to Sh83.059 billion by June 2026 from Sh79.397 billion at the end of December 2025.
Net assets increased from Sh20.434 billion to Sh21.247 billion, while cash and cash equivalents rose from Sh4.334 billion to Sh5.383 billion.
Despite the improved earnings, shareholders will not receive an interim dividend.
Chairman Habil Olaka said the group was making progress on a plan to reduce its share premium account by Sh4.7 billion after shareholders approved the proposal in June.
“The proposed reduction will be applied against accumulated losses. It's a partnership restructuring that does not alter shareholder ownership or involve a cash distribution,” Olaka said.
The move is aimed at dealing with historical balance-sheet constraints and making it easier for the group to resume dividend payments in future.
Old Mutual also reported progress in winding down its South Sudan operations, saying the run-off remained on schedule and was expected to be substantially completed before the close of 2026.
The group operates in 12 African countries, where it provides insurance, savings, investment and other financial services to individual and corporate customers.
Its Kenyan business includes insurance, investment and pension-related services.
For the rest of the year, management plans to concentrate on improving claims handling, reducing fraud, expanding the use of digital platforms and artificial intelligence, improving customer engagement and controlling operating costs.
The group said it would also continue strengthening its underwriting, investment and asset management operations as it seeks to maintain the gains recorded in the first half.
However, Old Mutual cautioned that political uncertainty, economic pressures and climate-related challenges could continue to affect its operations.
The company said disciplined execution of its strategy, together with improved performance across its key businesses, would remain central to its efforts to achieve steady and sustainable growth.