OUTsurance is paying a special dividend of 40 cents per share for the full year to June 2024 after the South Africa unit raised normalised earnings by 17.4% to R2.2 billion, boosted by strong income although its Irish division incurred start-up losses of R180 million.
The 40 cents special dividend OUTsurance paid was on top of a 29.4% upswing in the full-year ordinary dividend to 174.4 cents.
Shares in the company traded 8% higher at R55.14 in midday trade on the JSE yesterday, expanding its 20.97%, 7.11% and 2.18% upswing in the year to date, one month and seven day comparatives, respectively.
After OUTsurance SA raised normalised earnings to R2.2bn, the Youi Group also had 12.8% stronger earnings of R1.5bn while OUTsurance Life was 47.9% stronger at R210 million.
This left OUTsurance with group normalised earnings that were 15.7% higher for the period under review, at R3.8bn
“The strong earnings result was supported by a good operational performance and investment income results,” said CEO Marthinus Visser.
“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 start-up loss incurred by OUTsurance Ireland.”
The stronger earnings performance boosted normalised earnings per share by 20.2% to 230.6 cents for the group that services 2.8 million policies and employs more 7 000 people across South Africa, Australia and Ireland.
A year ago, OUTsurance incurred a loss of R27.6m relating to OUTvest which was disposed of early this year.
Gross written premiums for the property and casualty segment grew by 20.5% for the period under review, driven by elevated inflation and good new business performance delivered by the Youi and OUTsurance SA operations, the company said.
This was against a claims ratio increase from 54.3% to 56.8% for the same period. OUTsurance attributed this to the "higher natural perils claims" incurred by Youi in Australia
“OUTsurance SA delivered improved claims ratios on the back of pricing discipline and continued improvement in claims experience in the OUTsurance Broker book,” said Visser.
OUTsurance is focusing on a “disciplined scale-up of OUTsurance Ireland” for its current trading year.
“The process to organically scale OUTsurance Ireland will be staged in line with our confidence to price and underwrite accurately as well as avoiding the risk of anti-selection, particularly as it relates to bodily injury exposure,” Visser said.
OUTsurance will also pay close attention to growing Youi's share of the Australian direct personal lines market. It sees The Youi division's growth opportunity in the large Australian Property and Casualty market as a major group catalyst for growth.
“Our medium-term focus is to ensure that Youi is positioned to incrementally and profitably grow market share whilst maintaining strong underwriting discipline and risk management to counter the effects of climate change.”
This week, OUTsurance Group Limited (OGL) acquired 69 996 930 OUTsurance Holdings Limited treasury shares held by the OUTsurance Holdings (OHL) Share Trust. After the transaction, OGL has seen its interest in OHL rise from 90.5% to 92.3%.
The acquisition was funded by OGL’s surplus cash and the issuance of 12 079 169 new OGL ordinary shares at R48.69 per share to OHL, with the issue price based on the OGL share price at the close of trade on September 11, 2024.
The trust is being wound-up in anticipation of the ultimate roll-up of the OHL minority shareholding to OGL shares over the next 12 to 18 months, said OUTsurance.
BUSINESS REPORT