Eleven years after entering the Nigerian market, Old Mutual Limited, a premium African financial services group, has made a fresh strategic move to further explore the market and reposition the brand through new ownership.
One unique thing that is common to all successful companies is a strong brand positioning strategy. From Coca-Cola to Nike, Samsung to Starbucks, consistent brand positioning strategy has remained the winning global tool. In achieving this, many strategies may be adopted, depending on market reality, trends and reason for the exercise.
Old Mutual Limited, a premium African financial service group, with success stories across various markets in the continent recently made a strategic move to deepen its presence in Nigeria by letting go of a whole 100 percent of its stake in its General Insurance and Life businesses to Emple Group, an investment company managed by experienced Nigerian investors with a proven track record of delivering best-in-class transaction execution across Sub-Saharan Africa as well as growing its investment in the Nigerian market.
While the decision was hailed by experts as a giant move to breathe fresh air into the brand, it was misunderstood by a few Nigerians who didn’t understand the marketing dynamics and therefore concluded that perhaps the leading insurance brand was leaving the market. By taking over its Life and General Insurance businesses, pending regulatory approval, Emple Group has thus been positioned to take the brand a notch higher.
Domestication For Equity Growth
The promoters of Old Mutual must have been guided by market reality and relevant brand growth strategies. Acquiring new customers is crucial for any business but building and retaining strong relationships with existing customers through the brand is what will truly future-proof the business. Today, Coca-Cola with a presence in over 200 countries, is being celebrated for its success story but the fact remains that the brand is a prime example of a global brand that has successfully established itself across diverse cultures. One of the key aspects of Coca-Cola’s strategy is localization. While maintaining a consistent brand image, its promoters tailor the brand positioning strategies and marketing campaigns to resonate with local customs and traditions.
Nigeria is currently facing multi-dimensional social and economic issues with millions affected by the rising cost of living, under-employment, unemployment, insecurity, and poor healthcare, amongst many others. But there remains a growing sense of national pride and patriotism driven mostly by culture, religion, art, and technological innovation.
The facts of the recent announcement allow Old Mutual to tap into this opportunity as the company is happy to be handing over a part of the business to a truly Nigerian entity that will continue the journey while making sure no Nigerian jobs are lost; and that the business continues to play a strong part in rebuilding the Nigerian economy at large and the financial services industry in particular.
According to the company, the announcement was to emphasise new opportunities, job preservation, partnership with regulators and government, pro-customer vision, and a demonstrated commitment to Nigeria and Nigerians.
Old Mutual and Nigeria’s Market
For the current status of Old Mutual, there is no gainsaying the fact that it has further re-positioned for more opportunities for stakeholders. Effective brand positioning happens when a brand is perceived favourably, as valuable, and credible to the consumer. With the new owner and their accomplishments in Nigeria, existing and potential patrons of Old Mutual will definitely carve out a place for it in their minds.
Among other things, the recent development has further reiterated the fact that OM and its promoters don’t only believe in the Nigerian market, they are committed to further explore it. Interestingly, its management has demonstrated through pragmatic actions that they have a ‘vote of confidence’ in Nigeria, thereby telling those who care to listen that the market is so precious to them to be abandoned.
This recent decision, according to the insurance Group, follows a painstaking strategic review of the businesses which weighed up the immediate-to long-term prospects for both the in-country asset and the broader Old Mutual Group.
Commenting on the transaction, Old Mutual West Africa Group CEO, Mr. Samuel Ogbu affirmed, “Since establishing a presence in Nigeria in 2013, it has been our ambition to scale and grow the business in a way that would position Old Mutual as a leading financial services provider in the market. Along the way, Old Mutual made strategic investments to ensure that the Nigerian businesses remain on the right footing and were able to successfully compete.
“However, Old Mutual has taken the decision to sell the Nigeria General Insurance and Life businesses, with the key consideration for this transaction being the optimisation of capital management.”
With this declaration, the brand team has again affirmed that being “different” from the competition isn’t enough to win in any market. As brand positioning expert Will Barron at Salesman.org -says, “You only get the opportunity to position your brand when you’re doing something remarkable. Anything else and it’s just a comparison.” To this end, the marriage between OM and Emple is a remarkable brand positioning strategy that looks good for the future of the business in Nigeria.
A brand repositioning strategy is not a complete remake of any company’s identity — it’s a calculated adjustment. For now, the stakeholders in the OM business are aiming to update their brand’s status, associations and personality, while retaining a continuous, recognisable identity. Thus, it’s a success story and not a brand failure. Looking at it from any angle, this measure is, without mincing words, the best to have been taken to protect the brand and open new vistas for it in Nigeria.
The Journey So Far
Looking back at the over a decade of operation of Old Mutual in Nigeria, it’s safe to conclude that the brand and its promoters have fulfilled their dream. Following this strategic review and the fact that the business will be continuing under new ownership, the future still looks good because the new owners are also credible and tested.
Old Mutual entered the Nigerian market in 2013 and this year marks about eleven years of its operations. Right at the start, its objectives were ambitious but purposefully so. As a Pan-African brand, it aims to build the most valuable business in the industry, which is ambitious but completely aligned with its Group strategy·
Along the way, the company made strategic investments to ensure that its businesses in Nigeria remained on the right footing and were able to successfully compete.
Future Expectation
The recent transaction which gave the right to management to the new owners, the key consideration is still to effectively optimise return on capital. It is expected that a profitable and sound business primed for growth under the new ownership.
Previously, Old Mutual Nigeria’s management team, led by Olalekan Oyinlade (Managing Director of the General Insurance business) and Olusegun Omosehin (Managing Director of the Life Assurance business), have worked to turn these businesses into profitable and strong entities, primed for further growth.
It’s believed that the Emple group is well-placed to take these businesses to the next phase of their growth journey.
As disclosed to THISDAY, the Old Mutual Nigeria Leadership team will be working closely with the Emple Group to ensure a smooth transition. It has also been confirmed that the company will maintain a presence in the country through its wholly-owned investment business, Africa Infrastructure Investment Managers or AIIM.
“OM sees great potential in the infrastructure investment space, and its view is long-term. The company currently has significant investment interests in renewable energy, midstream gas, and the digital infrastructure sector through our various AIIM funds,” the management told THISDAY.
Though the transaction is still subject to regulatory approval to proceed with the transaction as there are still a few outstanding steps to conclude, it’s however well written on the wall that this brand repositioning strategy would offer a new path forward and upward for the OM Brand. This conclusion may not be out of place in the current situation because globally, when growth has stalled, competitors are taking the lead, or customers aren’t connecting with a company like they used to, the next step is re-positioning. Old Mutual management has taken the bold step.
