Outsurance’s normalised earnings rise by 0.5%
Outsurance increased its normalised earnings for the six months ended December by 0.5% to R1.4bn, the insurer said on Monday.
However, headline earnings per share, which removes the effect of one-time charges, declined 0.8% to 91.6c, it said.
Gross written premium grew by 22.5%, which is testament to good operational execution, navigating effectively through the high inflationary environment and the contribution made by new business initiatives, the group said.
Annualised new business increased 38.8%, which points to an accelerated new-business trend over the period, supported by a persistently high inflationary environment.
The claims ratio rose from 54.4% to 59.1% due to R678m higher natural perils claims incurred by Youi. Youi’s working loss ratio (excluding natural perils) improved from 51.9% to 50.8%, which shows the deterioration was fully accounted for by the higher natural perils.
Outsurance delivered improved claims ratios for both the personal and business segments. The start-up expenses of Outsurance Ireland are contributing to the group’s higher expense base and ratio.
“Ignoring the increased share-based payments expense and Ireland costs, the P&C [property and casualty] cost-toincome ratio would be 27.8%. The mix effect of Youi’s faster growth in the group and its higher inherent cost ratio, also contribute to the higher cost-toincome ratio,” it said.
The life insurance business delivered a much-improved operating result following the impact of stronger growth achieved in the funeral marketplace and favourable yield movements compared to the comparative six months.
Over the past year the group took action to rationalise its portfolio of products and channels to ensure that its growth strategy is focused to where it optimises return on capital.
“This year’s focus is to continue investing in our core businesses where we see opportunities for organic growth and profitable market share expansion. Our teams are focused on cost optimisation as a core ingredient to pricing competitively.”
The company is looking forward to a successful market entry of Outsurance Ireland over the next quarter.
“Our new initiatives will continue to emerge from losses and contribute to group profitability. A particular focus is on the Outsurance Business Broker initiative and the profitability of business written in the BZI [Blue Zebra Insurance] channel.”
The group declared an interim dividend of 61.2c per share.
THE START-UP EXPENSES OF OUTSURANCE IRELAND ARE CONTRIBUTING TO THE GROUP ’ S HIGHER EXPENSE BASE