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Old Mutual takes a knock

A botch-up by employees cost South African insurer Old Mutual 107 million pound sterling, the UK website Timesonline reported today.

Staff sold Bermudan-based products to its Asian investors with a guaranteed rate of return, only to have some of its US staff fluff their defence strategy for what to do if markets fall.

"Old Mutual, listed in London as well as Johannesburg, told investors today that it was only 60 per cent covered for falls in Asian stock markets. In real money that means a hit of £107 million - or more if Asian markets continue their precipitous decline," the website said.

Today's hiccup on annuity guarantees at US Life is the second setback to Old Mutual this year.

Barrow, Hanley, one of its American investment boutiques, has already suffered from an ill-fated $1 billion investment in Bear Stearns, reported Timesonline (
7.8.08 21:01


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