Tracing historical footprints of The Old Mutual in Kenya

What you need to know:

In order to entrench itself as the colony’s first mutual society, the company began to refer to itself as the ‘old’ Mutual.
Old Mutual invested heavily in the domestic banking, industrial and mining sectors.
A full time branch was opened in Nairobi in 1930 at Old Mutual Building situated on Hardinge Street (present day Kimathi Street).

In 1845, John Fairburn led a group of 166 members in founding the Mutual Life Assurance Society of the Cape of Good Hope. The society’s members were also its first customers and their premiums represented the group’s sole paid up capital.

Later in 1885, the society changed its name to South Africa Mutual Life Assurance Society to reflect its dominant role as provider of insurance for the entire South African colony. A number of competing mutual groups sprouted, many introducing themselves to customers as “the mutual”. In order to entrench itself as the colony’s first mutual society, the company began to refer to itself as the “old” Mutual. The name gained popularity and the group adopted the corporate name Old Mutual.

The discovery of vast mineral resources in South Africa including gold and diamonds transformed the colony into an economic powerhouse in the region. The expanding economy translated into a rising number of policyholders for Old Mutual and growing influence in the colony’s political and economic affairs. It is noteworthy that the group’s chairman, John X Merriman was the last Prime Minister before the colony gained independence from Britain in 1910.

Due to the apartheid policy and strict foreign exchange controls in South Africa, Old Mutual was restricted primarily to business in the domestic market where, at one time, it controlled more than 33 per cent of the insurance market.

Increasingly ostracised by the rest of the world, the apartheid state was unable to do business outside of its borders and Old Mutual invested heavily in the domestic banking, industrial and mining sectors.

Notwithstanding its focus on South Africa, in the early 1900s, Old Mutual established operations elsewhere in Africa, where similar policies of racial discrimination were being practised but not explicitly referred to as apartheid, namely Rhodesia and German Southwest Africa. In 1927, Old Mutual started doing business in Kenya, managed from their Salisbury (current Harare) office in Rhodesia (today’s Zimbabwe).

A full time branch was opened in Nairobi in 1930 at Old Mutual Building situated on Hardinge Street (present day Kimathi Street) with Mr. C.B. Barton as branch manager.

Expanded in the 1940s and 1950s, Old Mutual Building is a five-storey office block built to an art-deco architectural design. Walls are built in stone, smooth rendered and finished in a brilliant white lime plaster beneath a Mangalore tiled roof. Windows are glazed in steel casements while doors are made of timber hung in embellished hand-carved hardwood frames.

The building is in an excellent state of repair and decoration considering its age.

Sanctions imposed by the international community against South Africa for its apartheid policies continued to limit Old Mutual’s cross-border trade and questions were raised in the Kenyan Parliament whether, indeed, the company should be allowed to continue doing business in the country.

On December 11, 1968 the Minister for Finance, James Gichuru, was obliged to issue a statement in Parliament asserting that “It would not be in the interests of the country or of the many citizens holding policies to prevent Old Mutual from operation in Kenya.”

Trading became very onerous for Old Mutual and for some time the company could only service old business making it, in effect, a closed fund in 1974.

The end of apartheid and the creation of a new government in South Africa led by Nelson Mandela in 1994 signalled the start of a new era for the country and for its leading financial services group. Old Mutual immediately embarked on the process of “demutualization” and conversion to a public stock limited company eventually shifting its headquarters to London so that it could list on the London Stock Exchange in 1999.

Old Mutual opened its offices in Kenya again in 1995 and today is one of the leaders in the financial services sector.

Old Mutual Building was gazetted as a national monument in 2001. The owner of Old Mutual Building was one of the parties that objected to the gazettement of the property on the basis that it would impede redevelopment and thus lower the value of the property. Other owners believed the government was taking away their property.

With time, the criteria for recognizing monuments have evolved and now include a broad range of sites and utilitarian buildings. The growing number of highly educated indigenous Kenyans in the museum service has no doubt contributed to interest in tribal sacred sites as well as Mau Mau and other historic local landmarks.

Gone are the days when monuments were just a collection of ruins or old buildings gazetted by the government on the recommendation of researchers, influential bodies and individuals. The law now provides for much more public participation than in the past.

The number of objections is of concern because it reveals not only a deep misunderstanding of the law and a need for public awareness and education on the subject and value of preservation but also the paradox of central government control in a climate of universal suspicion of government motives. There are also other unscrupulous parties who may want to frustrate the process in order to dispossess the owners.

The mandate of the National Museums of Kenya is limited to research, collection and collation of material and recommendation of suitable sites and monuments for gazettement by the government. The organisation does not have the resources for a massive sensitisation campaign nor for the maintenance and restoration of monuments. It is unlikely that the government will prioritise these resources in the near future.

Perhaps the government should look to other off-balance sheet means of raising funds such as tax and investment incentives (bonds come readily to mind) to finance preservation. Many local and foreign corporates, neighbourhood associations and individuals are keen to chip in to such efforts provided they are assured of transparency in the use of funds.

This can be achieved through public-private participation, with the involvement of the relevant local authority in each case, within a clearly defined legal framework. The National Museums of Kenya is working on a programme to devolve some of its functions to the counties.

Mr Kiereini is a retired banker and a motorcycle enthusiast.
E-mail: [email protected]