Old Mutual, South Africa's largest insurance company, is splitting into four parts

Old Mutual is expected to take two years to separate the four divisions

The firm is splitting into Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank and OM Asset Management (Reuters)

Old Mutual, South Africa's largest insurance company, is to split into four units to “unlock value currently trapped” in the business.

It is expected to take two years to separate the four divisions – Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank and OM Asset Management.

Bruce Hemphill, chief executive, who earlier this week confirmed the company was considering a break-up, said the current structure was costly and offered “insufficient synergies to justify those costs”.

“Our new strategy will allow each business to have simpler access to capital markets to fund its growth more easily and be valued more appropriately, with more straight forward regulatory arrangements,” he added.

The decision came after a strategic review led by Hemphill following his arrival at the firm from Standard Bank in November.

The news was well received, with shares up more than 3 per cent, or 5.7p, at 191p.

The company, which was founded in 1845, also reported a 4 per cent rise in pre-tax adjusted operating profit of £1.7 billion for the year to December 31.

The Anglo-South African group added that the total dividend would increase by 2 per cent to 8.9p a share.