OUTsurance hits record high

OUTsurance shares surged to a record after the South African insurer, which also has operations in Australia and Ireland, said full-year profits jumped and that it will pay a special dividend.

Net income increased 36% to R4.06 billion in the year to end-June from the prior year, the Johannesburg-based company said in a statement Tuesday.

A special dividend of 0.40 rand a share — owing to surplus funds in one of its units — will complement a total dividend of R1.74, 29% more than a year earlier. 

The stock climbed 8.5% to R55.38 at 11:47 a.m. in Johannesburg, the highest since OUTsurance took over Rand Merchant Investment’s listing on the city’s bourse.

Gross written premiums in the property and casualty business grew 21% to 33.2 billion rand, driven by elevated inflation and high interest rates in its markets, and as new business performance improved. 

“Our expectations for both Australia and South Africa are that premium inflation will moderate over the next 12 months in line with a more favourable inflationary and interest-rate outlook,” CEO Marthinus Visser said.

OUTsurance will continue to work on simplifying its business and will also focus on capitalizing on opportunities presented by the improving economic outlook in South Africa, which could reverse the absence of real economic growth over the last decade, Visser said. 

An energy crisis and the collapse of rail, ports and other infrastructure — exacerbated by years of poor governance — have hamstrung Africa’s most industrialized economy.

Gross domestic product expanded by an average of less than 1% over the past 10 years — less than needed to cut a 33.5% unemployment rate, among the world’s highest. 

Outsurance will also build on its new Ireland business and plans to break even in five years. Visser said.