A court case brought against Old Mutual by US insurer Travelers and its subsidiaries has been dropped, the JSE-listed group said in a statement on Monday morning.
Old Mutual issued a statement on March 13 saying it “noted” that The Travelers Companies and its subsidiary St Paul Fire and Marine Insurance Company lodged a claim in the Southern District of New York court “in relation to pre-existing … legacy items relating to previously disposed of US assets”.
On Monday, Old Mutual said “Travelers have withdrawn all of the remedies they were claiming”.
Old Mutual said it “continues to believe that this claim was without merit”.
Neither Old Mutual nor Travelers have publicised what the legal dispute was about.
Travelers dropping its court case appears to have cleared one of the obstacles Old Mutual faces in its plan to strip itself down to an African-focused group.
Old Mutual’s former US subsidiary, OM Asset Management, has rebranded itself BrightSphere Investment Group and is now independent of its former parent, the company said in Monday’s statement.
The next step is to turn Old Mutual’s UK arm, which has been rebranded Quilter, into an independently listed, standalone entity.
The insurance group said UK courts had insisted that it “hold sufficient liquid, high-quality assets to meet its liabilities and deal with any contingencies, plus adequate headroom, taking into account relevant insurances” for what it termed “legacy issues” such as Travelers’ lawsuit.
“The managed separation strategy seeks to preserve and release the value currently trapped within the group structure. The managed separation will be materially complete by the end of 2018,” Old Mutual said.