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OUTsurance delivers record performance

15 September 2023 OUTsurance Group Limited

OUTsurance Group Limited (OGL) (formerly RMI Holdings Limited) [1]

OUTsurance Group Limited, a growing, short-term insurance group operating across South Africa and Australia, has today reported its annual results for the year ended 30 June 2023.

The Group’s earnings for the period are predominantly impacted by the performance of OUTsurance Holdings Limited (OHL), the Group’s 89.8% subsidiary and owner of insurance interests.

• Normalised earnings from continued operations up 62.2% to R2,875 million.
• Full year dividend of 134.8 cents per share; representative of the simplification of the OGL structure over the last year following the sale and unbundling of previous associate interests, settling of debt and the reduction in head-office costs following the listing transition.
• Special dividend of 8.5 cents per share represents the dividend distributions received by RMI Investment Managers over the course of the financial year.

OUTsurance Holdings Limited (OHL)

Marthinus Visser, Chief Executive Officer, OUTsurance Holdings, said:The 2023 financial year was marked by strong revenue growth on account of the continued delivery of our strategy to scale our wider product set through all three major channels – digital, call centre and face-to-face. This strategy has unlocked significant runway for growth in our current markets of South Africa and Australia. Subject to regulatory approval our planned expansion to Ireland provides further long-term growth potential. Profit growth was also robust on account of more favourable weather-related claims in Australia as well as timeous action to combat the effects of a sudden reset in vehicle accident frequency as well as higher claims inflation, loadshedding, vehicle theft and reinsurance cost.

Importantly, the group has managed to steer growth segments towards profitability through a clear focus on cost efficiencies, scale and claims ratio improvements.

While the economic environment is expected to remain challenging, we have made good progress in simplifying the structure of the group and laying the foundations for sustainable organic growth. It is now all about execution and focusing on our key strengths.

OHL Financial Highlights

• Gross written premium increased by 21.1% to R28.5 billion benefitting from organic growth, higher premium inflation and a weaker Rand.
• Delivered 17.2% new business premium growth in 2023 aided by the higher inflationary environment. New initiatives, including OUTsurance Brokers, Youi’s underwriting partnership with Blue Zebra Insurance (Youi BZI), OUTsurance Life’s entry into the Funeral market, and Youi’s Compulsory Third Party (CTP) product, accounted for 46% of the new business premium written in the year.
• Operating profit increased by 41.7% to R4.073 billion, primarily attributed to the 2.5% reduction in the net claims ratio from 56.1% to 53.6% and the benefit of the substantial premium growth achieved.
• Normalised earnings increased by 39.8% to R3.238 billion.
• Insurance cost-to-income ratio was slightly higher at 30.6% from 30.4% in 2022, impacted by the adjustment to share-based payments expenses following the share price growth post the listing transition.
• Normalised ROE improved from 22% to 29.8% owing to strong earnings growth.
• Preparing for market entry into the Republic of Ireland in the first half of 2024, subject to obtaining authorisation from the Central Bank of Ireland.
• OUTsurance Holdings remains well capitalised with a solvency multiple of 2.2 compared to a target of 1.5, underlining the company’s resilience and claims paying ability.

[1] OUTsurance Group Limited represents the consolidated performance of OUTsurance Holdings Limited coupled with head office costs and the financial performance of RMI Treasury Company where portfolio investments and the interest in RMI Investment Managers are retained.

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