FTSE 100 listed insurer Old Mutual is selling off its US life assurance business for £220m in order to pay down its debts.

The move is broadly in line with the company's agility, as by coincidence it made the same amount (£222m) of increase in operating profits to hit £735 million allowing it to exit from a potentially loss-marking market.

Harbinger Capital Markets, led by billionaire Philip Falcone hopes to unlock further value in the business after JP Morgan advised Old Mutual for the price of $350m - roughly equivalent to the business' embedded value (EV).

The South African insurer meanwhile said: "This deal marks further progress towards our strategic objectives of simplifying the group, lowering our risk profile."

SHARES RISE

Shares in the company rose to its highest level since May 2008 meanwhile as news of £735m operating profits, based on its Wealth management - Skandia, and affluent premiums from its native South Africa helped raise the group's shares to 124.4 pence at 13:45 GMT+1.

Annual Premium Equivalent (APE) sales were up 28% to £814m, while Unit trust sales rose 43% to £4.6bn on a IFRS basis.

"We are driving change throughout the group and are .... confident about the outlook for the full year although market uncertainties remain." said Chief Executive Julian Roberts.

Julian also declined to deny reports that the group's Nedbank assets were due to be sold as the group looks to simplify and reduce the risk it holds.

Old Mutual has increased its capital surplus, measured according to FGD standards, to £1.7 billion from £1.5 billion in December 2009 as it looks to pay down debts by two thirds.

FTSE South Africa