OUTsurance feels the pain

OUTsurance reported mixed results for the six months through December 2023, as most of the insurer’s largest businesses reported a drop in earnings.

OUTsurance released its results for the six months to 31 December 2023 today, which revealed weak results for the company.

Normalised earnings increased by a meagre 0.5% to R1.41 billion, and normalised ROE dropped from 23% to 21.6%.

Diluted normalised earnings per share dropped slightly by 0.1% to 90.6 cents per share from 90.7 cents in 2022.

These results are due to weak growth and even declines in the performance of OUTsurance’’s largest subsidiaries.

OUTsurance, the company’s main insurance business in South Africa, saw normalised earnings drop by 3.4% to R923 million.

Australian insurer Youi, which has previously provided a significant boost to the company’s results, saw normalised earnings drop by 15.5% to R556 million.

OUTsurance Ireland was also a significant depressor on the company’s results, with normalised earnings dropping by 2,850% to a loss of R59 million from a loss of R2 billion the prior year.

However, the company’s results were slightly pulled up by the performance of OUTsurance Life, which saw normalised earnings increase by over 400% to R70 million.

The company’s administration services also saw significant growth in normalised earnings, which increased by over 200% to R20 million.

Notably, this figure includes the normalised loss of OUTvest in the prior period of R15 million and the 2023 financial year of R28 million.

OUTsurance disposed of OUTvest – its digital investments platform – on 1 February 2024 when it sold the platform to Alexforbes.

OUTsurance informed shareholders last year that it had concluded an agreement with Alexforbes to sell OUTvest to the asset manager.

OUTsurance previously conducted a strategic review of OUTvest, after which it decided to consider restructuring OUTvest due to the sub-scale nature of this business.

OUTvest is a digital investments platform launched in 2017 that connects people to financial advice and a range of investments to help them achieve their financial goals.

“We believe OUTvest fits neatly into our strategy by helping customers set goals, select investments and track their progress over time,” said Alexforbes retail executive Viresh Maharaj. 

Alexforbes previously said it plans to double its retail business over the next five years by capitalising on a new, slimmed-down structure and consulting expertise. 

“The growth areas for us is at least to double our retail business in three to five years,” CEO Dawie de Villiers told Bloomberg. 

OUTsurance declared a dividend of 61.2 cents per share, up almost 8% from the previous year.