OUTsurance shoots the lights out

OUTsurance experienced a significant increase in earnings and profit on the back of a strong operational performance and investment income.

OUTsurance released its results for the year ended 30 June 2024 on Tuesday, which revealed a strong performance for the insurer.

The OUTsurance Group is a multinational insurance group that specialises in Property and Casualty insurance. Its activities are focused on the South African and Australian insurance markets, with a recent expansion into the Republic of Ireland.

The company has two notable segments: Property and Casualty insurance, which comprises OUTsurance SA, the Youi Group, and OUTsurance Ireland, and Long-term insurance, which comprises OUTsurance Life.

In its 2024 financial year, OUTsurance generated insurance revenue of R31.91 billion, up almost 19% from the previous year.

Net investment income also rose significantly, from R1.20 billion in 2023 to R1.63 billion in 2024, a 36% increase.

The group’s earnings per share grew by 36.51% to 265.5 cents per share. 

This saw the insurer’s profit for the year jump by 31% to R4.49 billion, up from R3.42 billion the year prior.

OUTsurance said the strong earnings result was supported by good operational performance and investment income results. 

“The improved earnings outcome for the year was achieved notwithstanding higher natural perils claims at Youi, the large increase in the share-based payments expense for the year and the startup-loss incurred by OUTsurance Ireland,” the company said.

In the company’s Property and Casualty segment, gross written premium grew by a strong 20.5%, driven by elevated inflation and good new business performance delivered by the Youi and OUTsurance SA operations.

Its claims ratio increased from 54.3% to 56.8%, driven by the higher natural perils claims incurred by Youi and its increasing contribution to the shape of the company’s claims ratio.

OUTsurance SA delivered improved claims ratios on the back of pricing discipline and continued improvement in claims experience in the OUTsurance Broker book.

OUTsurance Ireland, which launched in May 2024, incurred R180 million in start-up losses for the year. 

“The company is following a measured approach to the launch phase and is performing in line with expectations,” the insurer said.

OUTsurance said it is entering the 2025 financial year with renewed optimism concerning the prospects of economic progress in the country underpinned by the Government of National Unity.

“A more vibrant economy that grows the middle class could reverse the absence of real growth in the insurance market over the last decade,” the company said.

“We are excited about the organic growth prospects of Youi supported by a stable Australian economy, low current market share, growth momentum and a growing insurance market.”

OUTsurance declared a gross final cash dividend of 113.2 cents per ordinary share and a special dividend of 40.0 cents per ordinary share.