{"id":816880,"date":"2025-03-14T11:01:28","date_gmt":"2025-03-14T09:01:28","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=816880"},"modified":"2025-03-14T11:01:33","modified_gmt":"2025-03-14T09:01:33","slug":"blowout-profits-for-south-african-insurance-giant","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/816880\/blowout-profits-for-south-african-insurance-giant\/","title":{"rendered":"Blowout profits for South African insurance giant"},"content":{"rendered":"\n

The OUTsurance group has seen a large increase in profit, but startup losses at the group’s recently launched Ireland business remain high.<\/p>\n\n\n\n

The group’s normalised earnings were 43.5% higher at R2,219 million. The group said the increase was driven by significantly fewer natural peril claims for Australia’s Youi and OUTsurance South Africa.<\/p>\n\n\n\n

It also benefited from organic premium growth and higher investment income. However, the share-based payment expenses linked to its Employee Share Option (ESOP) scheme remained expensive and volatile.<\/p>\n\n\n\n

The final tranche of the ESOP vests in September 2025, after which all the long-term incentive vintages will be transitioned to the new Conditional Share Plan (CSP).<\/p>\n\n\n\n

The CSP will be far less geared than the ESOP scheme, resulting in a more stable expense base going forward.<\/p>\n\n\n\n

The share-based payments for the final tranche of the ESOP were R776 million, far more than the R342 million in the prior period, and were driven by the 43.3% increase in the OGL share price over the period. <\/p>\n\n\n\n

The group also noted that OUTsurance Ireland incurred R218 million in normalised start-up losses during the six months under review. <\/p>\n\n\n\n

OUTsurance Ireland was launched in May 2024 and is performing in line with the group’s expectations.<\/p>\n\n\n\n

The higher loss is due to the increased operational cost base after launch and the onerous losses recognised for new insurance contracts issued. <\/p>\n\n\n\n

The operating loss, excluding onerous losses, increased from R64 million to R181 million, driven by increased operational costs related to marketing and operational infrastructure.<\/p>\n\n\n\n

“OUTsurance Ireland has delivered a satisfactory performance thus far, and we look forward to steering the business to break even through incremental and disciplined expansion,” said the group. <\/p>\n\n\n\n

Financials<\/strong><\/h2>\n\n\n
\n
\"\"<\/a><\/figure><\/div>\n\n\n

The group said the gross written premium grew by 17.4%, supported by ‘satisfactory’ growth across the operating segments despite premium inflation remaining sticky.<\/p>\n\n\n\n

The group said that premium inflation continued to be impacted by elevated claims cost inflation and the earn-through of the pricing actions taken in the prior year. <\/p>\n\n\n\n

With the rand strengthening against the Australian dollar over the period, Youi’s translated premium growth rate was negatively impacted<\/p>\n\n\n\n

The annualised new business increased by 17.9% off a high base in the prior period. The claims ratio also dropped from 59.1% to 53.0%.<\/p>\n\n\n\n

The drop in the claims ratio is linked to materially lower natural perils claims, improvement in working claims experience, and higher prior-year reserve releases.<\/p>\n\n\n\n

OUTsurance SA and Youi also delivered structural improvements in the cost base of all operating segments. <\/p>\n\n\n\n

OUTsurance SA and Youi also saw structural improvements in the cost base of all operating segments. Nevertheless, share-based payment expense distorts the cost-to-income ratio.<\/p>\n\n\n\n

OUTsurance Life also delivered strong operating and earnings outcomes, with operating profit rising from R57 million to R185 million. <\/p>\n\n\n\n

The group said the satisfactory performance was due to new business generation and cost efficiency over the period. <\/p>\n\n\n\n

The group’s overall operating profit increased by 58.8% from R1.7 billion to R2.8 billion. Its headline earnings per share also rose by 45.1% to 132.9 cents per share. <\/p>\n\n\n\n

The group thus increased its interim dividend by 44.8% to 88.6 cents per share. The group’s key financial details can be found below:<\/p>\n\n\n\n

Financials<\/strong><\/td>H1 2024<\/strong><\/td>H1 2025<\/strong><\/td>% Change<\/strong><\/td><\/tr>
Normalised earnings<\/td>1 546<\/td>2 219<\/td>+43.5%<\/td><\/tr>
Operating profit<\/td>1 788<\/td>2 839<\/td>+58.8%<\/td><\/tr>
Normalised investment income<\/td>746<\/td>1 027<\/td>+37.7%<\/td><\/tr>
Earnings per share (cents)<\/td>123.6<\/td>132.9<\/td>+7.5%<\/td><\/tr>
Headline earnings per share (cents)<\/td>91.6<\/td>132.9<\/td>+45.1%<\/td><\/tr>
Interim Dividend<\/td>61.2<\/td>88.6<\/td>+44.8%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

<\/p>\n\n\n\n


<\/p>\n","protected":false},"excerpt":{"rendered":"

The OUTsurance Group has seen a massive jump in earnings, but its new Ireland venture is still bleeding startup costs.<\/p>\n","protected":false},"author":95,"featured_media":799515,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[9653],"class_list":["post-816880","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-outsurance"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816880","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=816880"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816880\/revisions"}],"predecessor-version":[{"id":816929,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816880\/revisions\/816929"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/799515"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=816880"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=816880"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=816880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}