Group overview

OUTsurance

Willem Roos and Howard Aron //
Joint chief executive officer
  Willem Roos and Howard Aron
     

OUTsurance Logo

OUTsurance delivered a pleasing performance for the year under review. Group headline earnings attributable to ordinary shareholders increased by 39% to R807 million. the key drivers behind the growth were a favourable claims environment, double digit premium growth and a significant decrease in Youi’s start-up loss.

OUTsurance’s business model is built on a philosophy of scientific underwriting and pricing, innovative product design, a robust and efficient information technology platform and a high performance culture driven by great people. It believes in a client-centric strategy of providing value for money insurance products and awesome client service.

The group is committed to sustainable relationships with all its stakeholders. Examples of OUTsurance’s involvement in the community include the pointsmen project where pointsmen help to alleviate traffic congestion at high-traffic intersections, and the staff helping South Africa OUT project where hundreds of OUTsurance employees volunteer their time and efforts in order to make a difference in the lives of less fortunate South Africans through various projects.

OUTsurance delivered a pleasing performance for the year under review. Group headline earnings attributable to ordinary shareholders increased by 39% to R807 million.

The key drivers behind the growth were a favourable claims environment, double digit premium growth and a significant decrease in Youi’s start-up loss.

A significant contributor to the earnings performance was the favourable claims environment in South Africa, characterised by benign weather conditions, a decrease in crime related claims and a strong Rand translating into lower replacement car part prices. The South African short-term insurance operation continued to expand market share. The top line growth is satisfactory in light of the relatively weak South African economy, soft new vehicle sales and the ever increasing competitive landscape.

During August 2010, OUTsurance Life introduced a fully underwritten product to the South African market. The risk-only product offers high quality death, disability and critical illness benefits directly to the market. OUTsurance believes direct life insurers will continue to penetrate this traditionally broker dominated market by offering less complex products and more competitive premiums on the back of lower acquisition costs.

Youi, the start-up venture in Australia, continued to entrench its brand and its personal lines product offering in the competitive Australian market, where over ninety percent of short-term insurance is sold direct. The group’s scientific approach to underwriting and pricing has started to bear fruit, as Youi’s claims ratio continues to trend down to below industry averages. The high frequency of severe natural disasters in Australia is a risk to Youi’s claims experience which is managed via adequate reinsurance cover. The business continues to track expectations and is expected to achieve break-even during the 2013 financial year.

Subsequent to the year-end we reached agreement to sell an effective interest of 6,8% in the ordinary share capital of OUTsurance to the management team of OUTsurance for a purchase consideration of R552 million. RMI Holdings will facilitate the transaction by providing term funding to the management team for part of the purchase consideration. This transaction is in the process of being implemented.

RMI Holdings included R203 million of OUTsurance’s earnings in its normalised earnings for the four month period.

For an indepth review of OUTsurance’s performance, RMI Holdings’ shareholders are referred to www.outsurance.co.za.

   

Return to top