{"id":848909,"date":"2026-02-03T07:55:00","date_gmt":"2026-02-03T05:55:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=848909"},"modified":"2026-02-03T08:02:15","modified_gmt":"2026-02-03T06:02:15","slug":"warning-about-outsurance-for-investors-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/848909\/warning-about-outsurance-for-investors-in-south-africa\/","title":{"rendered":"One thing investors in South Africa should watch with OUTsurance"},"content":{"rendered":"\n

OUTsurance’s recent performance has been robust, but the stock now appears overvalued compared to its peers. <\/p>\n\n\n\n

This is the view of PSG Equity Analyst Marnus Piekaar, who assigned OUTsurance an intrinsic value of R64 per share, which is lower than its current market price of around R70. <\/p>\n\n\n\n

The group’s recent performance has been strong, with insurance revenue increasing by 16.4% year-on-year to R37.1 billion in the 2025 financial year. <\/p>\n\n\n\n

The insurance service result strengthened by 35.6% to R7.6 billion, while net investment income grew by 33.7% to R2.2 billion. <\/p>\n\n\n\n

Profit before tax rose 22.2% to R7.7 billion, and earnings attributable to shareholders increased to R4.7 billion, up 15.9%. Headline earnings grew 30.01% to R4.6 billion. <\/p>\n\n\n\n

While the group’s new Irish business recorded a R448 million loss over the period, the group’s Australian business, Youi, remains a strong performer. <\/p>\n\n\n\n

On a compound annual growth rate, Youi has seen 23% compared to OUTsurance SA’s 9%. This growth is also not linked to a weaker rand. <\/p>\n\n\n\n

Despite the company’s strong performance, Piekaar noted that the company’s share price has underperformed the JSE Capped SWIX Index in 2025. <\/p>\n\n\n\n

Up until December 2025, OUTsurance had seen its share price rise 6.2%, which was below the benchmark’s 31.9%. <\/p>\n\n\n\n

However, over the last decade, OUTsurance’s share price rose by close to 250% compared to the benchmark’s roughly 85%. <\/p>\n\n\n\n

Piekaar said that the OUTsurance share price is likely in a period of consolidation, where its earnings are given time to catch up, given the high price-to-earnings (P\/E) levels. <\/p>\n\n\n\n

Compared with its peers, Piekaar noted that OUTsurance’s share price has massively outperformed those of Santam and Sanlam. <\/p>\n\n\n\n

However, looking at the financial specifics, Piekaar noted that OUTsurance appears far more expensive than its peers. <\/p>\n\n\n\n

For instance, Santam and OUTsurance have a similar return on equity (ROE) of around 32%, but OUTsurance has a forward P\/E of around 20 compared to Santam’s 12.<\/p>\n\n\n\n

Santam’s 2-year growth expectations are set at just over 20%. Although this is below OUTsurance’s 30% threshold, it still indicates the stock is overvalued. <\/p>\n\n\n\n

On a weighted-average basis, the OUTsurance stock has an intrinsic value of R64, which is above its current level of R70. <\/p>\n\n\n\n

A new home<\/h2>\n\n\n
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While the stock may seem overvalued, those are still likely to back OUTsurance can now buy the stock via a new medium.<\/p>\n\n\n\n

OUTsurance recently listed on the A2X via a secondary listing, with qualifying shares listed on 14 January 2026. <\/p>\n\n\n\n

The insurer’s primary listing remains on the JSE, and its issued share capital is unaffected by the secondary listing. <\/p>\n\n\n\n

\u201cFor the past 28 years, OUTsurance has delivered innovative, value-for-money products to its clients, and we are pleased to help extend this approach to their shareholders,\u201d said A2X CEO Kevin Brady.<\/p>\n\n\n\n

\u201cBy listing on A2X, OUTsurance will provide its investors with the benefit of choice to transact its shares on an additional venue with reduced transaction fees and extra liquidity.\u201d<\/p>\n\n\n\n

The company joins over 150 other companies listed on A2X, which represent a combined market cap of over R12 trillion. <\/p>\n\n\n\n

Other companies listed on the A2X include AngloGold Ashanti, Aspen, Exxaro, Discovery, Growthpoint, Implats, Investec, Mr Price, Naspers, Nedbank, Prosus, Remgro, Sanlam, and Standard Bank.<\/p>\n\n\n\n

A2X serves as a secondary listing venue for companies in South Africa, aiming to enhance trading efficiency and reduce costs.<\/p>\n\n\n\n

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OUTsurance financial information<\/h2>\n\n\n
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Source: PSG Financial Services<\/figcaption><\/figure><\/div>\n\n
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Source: PSG Financial Services<\/figcaption><\/figure><\/div>\n\n\n
R million \/ Cents<\/th>FY2025<\/th>FY2024<\/th>% change<\/th><\/tr><\/thead>
OUTsurance SA<\/strong><\/td>2 928<\/td>2 212<\/td>32.4%<\/td><\/tr>
Youi Group<\/strong><\/td>2 290<\/td>1 574<\/td>45.5%<\/td><\/tr>
OUTsurance Life<\/strong><\/td>349<\/td>210<\/td>66.2%<\/td><\/tr>
OUTsurance Ireland<\/strong><\/td>(402)<\/td>(180)<\/td>>(100%)<\/td><\/tr>
Administration services<\/strong><\/td>28<\/td>12<\/td>>100%<\/td><\/tr>
Central and consolidation adjustments<\/strong><\/td>(97)<\/td>107<\/td>>(100%)<\/td><\/tr>
Non-controlling interest<\/strong><\/td>(134)<\/td>(105)<\/td>(27.6%)<\/td><\/tr>
OUTsurance Holdings Limited<\/strong><\/td>4 962<\/td>3 830<\/td>29.6%<\/td><\/tr>
Non-controlling interest<\/strong><\/td>(390)<\/td>(353)<\/td>(10.5%)<\/td><\/tr>
Central and RMI Treasury Company<\/strong><\/td>156<\/td>59<\/td>>100%<\/td><\/tr>
OUTsurance Group Limited<\/strong><\/td>4 728<\/td>3 536<\/td>33.7%<\/td><\/tr>
Normalised earnings per share (cents)<\/strong><\/td>306.2<\/td>230.6<\/td>32.8%<\/td><\/tr>
Diluted normalised earnings per share (cents)<\/strong><\/td>304.6<\/td>226.4<\/td>34.5%<\/td><\/tr>
Earnings attributable to ordinary shareholders (cents)<\/strong><\/td>306.2<\/td>265.5<\/td>15.3%<\/td><\/tr>
Headline earnings per share (cents)<\/strong><\/td>298.3<\/td>230.4<\/td>29.4%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
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<\/p>\n","protected":false},"excerpt":{"rendered":"

While OUTsurance has been a strong perfomer over the last year, its share price appears overvalued. <\/p>\n","protected":false},"author":95,"featured_media":799511,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[12410,9653,23466,2880,341],"class_list":["post-848909","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-a2x","tag-outsurance","tag-psg-financial-services","tag-sanlam","tag-santam"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/848909","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=848909"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/848909\/revisions"}],"predecessor-version":[{"id":849644,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/848909\/revisions\/849644"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/799511"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=848909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=848909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=848909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}