Regional insurer Old Mutual Holdings Plc is exiting the South Sudan insurance market after four years of loss making in the politically volatile nation.
Old Mutual, which has operated in South Sudan for 26 years, said it was starting a runoff period on the operations during which it will not be taking new insurance business, but will concentrate on honouring existing policies.
The exit plan follows a period of losses in the unstable country, whose economy has taken a beating due to a prolonged civil war that started in 2013 disrupting crude oil production, which is the main economic activity.
“The board of the company hereby notifies its shareholders and general public that its subsidiary, UAP Insurance South Sudan Limited, a company incorporated and duly licensed to undertake insurance business in South Sudan, will cease writing new business and insurance policy renewals with effect from July 3, 2025," said Old Mutual in a public announcement.
“This follows a strategic review of the business and its operating environment."
South Sudan’s economy contracted 26.4 percent last year amid political violence.
Old Mutual will continue to service existing policyholders with the runoff period allowing claimants to file before it exits the market at the end of the financial year.
The South Sudan business had seen its total assets of Sh9.5 billion fall below liabilities of Sh11.3 billion making it technically insolvent. This was the second consecutive year that the South Sudan unit had closed with assets less than its liabilities by the same margin of Sh1.8 billion.
Cumulative losses from Juba comprising general and life insurance businesses in the last four years are approximately Sh3.4 billion.
The general business has been the most hit with a record loss of Sh2.9 billion in 2022.
The unit reported a net loss of Sh227 million in the year ended December 2024, which was an improvement from the prior year's loss of Sh236 million.
Old Mutual owns three properties worth Sh4.1 billion in South Sudan through its subsidiary, UAP Properties South Sudan Limited, in which it has a 70 percent stake.
A change in US foreign policy, dubbed America First, which has seen it cut back aid to other nations and focus on developing itself, has also affected the war-ravaged nation and dimmed business prospects.
“South Sudan continues to grapple with stalled peace negotiations and worsening humanitarian conditions, further exacerbated by US aid cuts and security risks,” said Old Mutual in its annual report.
Old Mutual’s plans to cease operations in South Sudan follows its exit from Tanzania last year, signalling its intentions to keep lean and profitable.
The insurer sold the Tanzanian business at Sh73.5 million, taking a Sh545 million hit in the sale. It attributed its exit from the Tanzania market to challenges in achieving desired returns on capital and lacking a clear path to attaining market leadership, which was a key goal.
Old Mutual has other subsidiaries in Uganda and Rwanda. Last year, the group reported a profit after tax of Sh1.3 billion, up from Sh201 million in 2023.
