Old Mutual Insurance Sells US Unit

August 9 - In an attempt to slim down its operations in order to improve profits, Old Mutual announced that it has sold its US life insurance business.

The unit was sold for $350 million to hedge fund Harbinger Capital Partners, and the proceeds for the sale will be used to repay heavy debts that Old Mutual finds itself in.

Harbinger will net almost one million policyholders through the deal, with $109 billion in life insurance policies in force.

Old Mutual announced back in March that it was seeking to sell its US life insurance business.

"We expect to realize substantial returns from continuing business improvements and Harbingers' ability to enhance the value of the asset portfolio," said the Chief Executive Officer of Harbinger, Philip Falcone.

He described the acquisition as "an attractive proposition".

Proceeds from the sale of the US life unit are expected in the second half of the year.

Old Mutual, which is a joint South African/English venture, is on a drive to simplify its structure.

Investors have expressed their concerns over the running of the company, which has impacted the share price.

On Friday, Old Mutual announced in London that first half operating profits had risen by 43%.

"Our operating results were substantially ahead of the comparative period with strong sales performance particularly in South African retail markets and in wealth management," said the Chief Executive Officer for Old Mutual, Julian Roberts.