Short-term insurer Outsurance reported a surge in profit from its continuing operations as premiums increased, and is expecting the insurance market to grow in the medium- to long-term because of climate change, solar panels and electric vehicles (EVs).
The company, valued at about R60bn on the JSE, saw its annual profit for the year to end-June jump 96.3% year on year to R3.3bn and headline earnings per share (HEPS) for continuing operations, a common profit measure in SA that excludes certain items, 99.2% to 189.2c.
“We believe the general insurance market will continue to experience real growth because of factors like climate change, the proliferation of solar panels and the increasing market penetration of electric vehicles driving real claims cost increases. In the medium to longer term, Outsurance Ireland is expected to positively contribute to the growth potential,” group CEO Marthinus Visser said on Friday.
“2023 was a contrasting year to 2022, where premium inflation and interest rates were lower and we experienced more pronounced natural catastrophe losses,” he added.
The group, which operates in SA and Australia and is looking to enter the Irish market, also reported its lowest natural peril losses in Australia, which is more affected by extreme weather events such as heat and storms than SA, with 8.5% of net premium, down 11.1 percentage points year on year.
Back in SA, more people are installing solar panels and looking for alternative energy sources to reduce their reliance on the troubled state-owned power utility Eskom as power cuts persist, while those who can afford it are looking into buying EVs as petrol prices continue to rise.
In December, Rand Merchant Investment (RMI) changed its name and started trading as the Outsurance group on the local bourse, as part of its transition after the sale of the group’s stake in UK insurer Hastings in December 2021 and the unbundling of its interests in Discovery and Momentum in April 2022.
The Outsurance Group Limited currently owns a 89.8% stake in Outsurance Holdings Limited (OHL) and 100% in RMI Investment Managers.
The primary source of revenue is insurance premiums and currently services 2.8-million policies.
Gross insurance premium written grew 21.1% to R28.5bn. The bulk of gross insurance premiums written were short-term insurance with 96.7%.
The annual dividend was more than doubled as it was increased by 105.8% to 134.8c, and a special dividend of 8.5c was declared.
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