Outsurance Group Limited · JSE:OUT
Outsurance — FY2022 Earnings Presentation
40 slides from Outsurance's earnings presentation, Sep 22, 2022
Slide 1: RMI Transition and Results at 30 June 2022
RMI TRANSITION AND RESULTS AT 30 JUNE 2022 22 September 2022 FOCUS • COLLABORATE • GROW STRICTLY PRIVATE AND CONFIDENTIAL
Slide 2: OUTsurance Listing | Process Update
OUTSURANCE LISTING | PROCESS UPDATE o Progressing well o Internal restructure: AlphaCode and RMI Investment Managers transferred to RMI TreasuryCo, a 100% subsidiary of RMI and ring fenced o A circular to shareholders providing further disclosure on the change of name, the business segments of OUTsu
Slide 3: OUTsurance Group Structure Post the Transition
OUTSURANCE GROUP STRUCTURE POST THE TRANSITION Group structure with OUTsurance Group Limited as the listed entity and OUTsurance Holdings as the licensed controlling company OUTsurance Group Limited (old RMI) OUTsurance 10.7% Management 89.3% 100.0% Management contract OUTsurance in respect of the R
Slide 4: RMI FY2022 Results
RMI FY2022 RESULTS Normalised earnings for the year ended 30 June 2022 Rm Jun 2022 Jun 2021 % change Continuing operations OUTsurance (excluding Hastings) 2 249 2 535 (11) OUTsurance (including Hastings) 2 316 2 779 (17) Hastings included in OUTsurance (67) (244) 73 RMI Investment Managers and Alpha
Slide 5: RMI Investment Managers
PR BN INVESTMENT RMI managers Loe IDENTIFY, PARTNER, GROW
Slide 6: Update on IMG Portfolio | Performance and AUM Growth
UPDATE ON IMG PORTFOLIO | PERFORMANCE AND AUM GROWTH INVESTMENT PERFORMANCE | JUN’ 22 COLLECTIVE AUM (R’BN) Proportion of funds in each quartile Since Acquisition 250 000 ABOVE MEDIAN R205bn 69% 71% 75% 71% 75% 69% 58% 64% 61% 100% 90% 7 7 6 4 5 5 200 000 8 80% 6 5 6 4th Quartile 70% 7 7 10 9 150 00
Slide 7: Update on IMG Portfolio | Proposed Transaction with MMH
UPDATE ON IMG PORTFOLIO | PROPOSED TRANSACTION WITH MMH UPDATE ON PROPOSED TRANSACTION Momentum Metropolitan’s interest to acquire RMI’s interest in AFFILIATES 1 AFFILIATES 2 AFFILIATES 2B ROYAL IM RMI Investment Managers (excluding Polarstar, which will be retained within RMI TreasuryCo) This propo
Slide 8: Slide 8
Slide 9: AlphaCode Snapshot
ALPHACODE SNAPSHOT AlphaCode investment portfolio (leading c. R1bn African financial services and technology portfolio delivering impact across Africa) Local excellence, global relevance ■ Facilitated $1.2bn of loans to > 25k postgraduate students ■ Secures 160m banking transactions per month across
Slide 10: Financial Results – 30 June 2022
OUTsurance Holdings Limited Financial Results – 30 June 2022
Slide 11: Contents
Contents • Strategic update – Marthinus Visser • Operational review – Marthinus Visser • Financial review – Jan Hofmeyr • Outlook – Marthinus Visser OUTsurance Holdings Limited 11
Slide 12: Strategic update
Strategic update Significant progress to unlock Trusted • 16.7% growth in in-force policies. runway for sustained growth in Product and brands and • R530 million in OUTBonuses paid in FY22. existing markets through product distribution awesome • Market leading Ombudsman Complaint and and channel exp
Slide 13: Strategic update: Product and distribution initiatives
Strategic update Product and distribution initiatives Group gross written premium (R’million) Annualised new business premium written (R’million) 14.4% 22.5% 23 532 7 052 20 570 5 756 17 455 16 135 15 027 14 908 14 754 4 240 3 893 12 469 10 352 3 054 3 025 8 288 Product and distribution 2017 2018 20
Slide 14: Strategic update: Earnings profile
Strategic update Earnings profile – impact of investment and natural perils losses Impact of growth initiatives and natural perils exposure on Losses generated by growth initiatives as % of profits from operating profit mature business units 4 500 700 18% 18% 4 000 600 14% 13% 3 500 3 317 210 13% 2
Slide 15: Premium revenue diversification
Premium revenue diversification Short-term insurance activities – net earned premium Business property Business 9% Business motor 2% 12% Sales Sales Personal Personal 52% Personal 33% 64% property motor motor 27% Personal property 1% CTP • Motor insurance underpins the stability of the Group’s earni
Slide 16: Operational review
Operational review You always get something out.
Slide 17: Overview of key operational themes
Overview of key operational themes OUTsurance South Africa • Rising claims inflation driving premium inflation as pricing discipline is maintained. • Growth in premium shifted more towards inflation than unit growth. OUTsurance Personal • Normalisation of motor claims frequency to pre-pandemic level
Slide 18: Overview of key operational themes
Overview of key operational themes Youi • Large increase in retained natural perils claims due to increased number of natural peril events and impact of higher reinsurance attachment point. Youi Direct • Sharp increase in premium inflation in response to hardening reinsurance rates and general infla
Slide 19: Financial review
Financial review You always get something out.
Slide 20: Financial Review
Financial Review Part 1: Group consolidated results 44% of Group GWP 74% of Group operating profit Part 2: OUTsurance results (2021:46%) (2021:68%) 53% of Group GWP 23% of Group operating profit Part 3: Youi results (2021:51%) (2021:32%) 3% of Group GWP 4% of Group operating profit Part 4: OUTsuranc
Slide 21: Group consolidated results overview
Group consolidated results overview R’million 2022 2021 % change Gross written premium 23 532 20 570 14.4% Annualised new business premium written 7 052 5 756 22.5% Operating profit 2 874 3 317 (13.4%) • Excluding the current and prior Normalised earnings 2 316 2 779 (16.7%) year earnings contributi
Slide 22: Group consolidated results overview
Group consolidated results overview Normalised earnings – movement analysis (R’million) 11.9% growth in net earned premium Operating expense movement includes R172 Lower earnings Positive net million increase in associated with impact of yield commission Hastings disposal movements related to BZI in
Slide 23: Group consolidated results overview
Group consolidated results overview Net retained natural perils losses as % of net earned premium 19.6% 13.1% 13.2% 12.4% 12.2% 9.5% 9.7% 9.1% 9.0% 8.4% 8.0% 8.1% 7.7% 7.1% 6.7% 6.5% 6.4% 5.8% 5.7% 4.9% 6.9% 5.7% 4.7% 4.1% 4.3% 3.7% 3.5% 3.8% 4.2% 3.7% 2013 2014 2015 2016 2017 2018 2019 2020 2021 20
Slide 24: Group consolidated results overview
Group consolidated results overview Normalised earnings – movement analysis (R’million) 11.9% growth in net earned premium Operating expense movement includes R172 Lower earnings Positive net million increase associated with impact of yield in commission Hastings disposal movements related to BZI in
Slide 25: Group consolidated results overview
Group consolidated results overview Convergence of operational and Group ROE’s post 2018 and 2019 ROE’s Hastings disposal. Surplus Group normalised earnings (R’ million) ROE (%) benefitted from low natural capital in Group will still result 3 011 2 629 2 391 2 779 2 316 perils exposures in some lag
Slide 26: Financial Review
Financial Review Part 1: Group consolidated results 44% of Group GWP 73% of Group operating profit Part 2: OUTsurance results (2021:46%) (2021: 68%) 53% of Group GWP 23% of Group operating profit Part 3: Youi results (2021:51%) (2021: 32%) 3% of Group GWP 4% of Group operating profit Part 4: OUTsura
Slide 27: OUTsurance
OUTsurance OUTsurance key financial outcomes R’million 2022 2021 % change • 16% growth in annualised new business Gross written premium 10 253 9 407 9.0% premium written. Net earned premium 9 994 9 259 7.9% • Net earned premium growth would have been 8.9% excluding reinsurance reinstatement Operatin
Slide 28: OUTsurance Personal
OUTsurance Personal OUTsurance Personal key financial outcomes R’million 2022 2021 % change Gross written premium 8 161 7 694 6.1% • Acceleration in premium inflation overlaid with positive unit growth. Net earned premium 7 981 7 586 5.2% • Excluding the FirstRand Homeowners book Operating profit 2
Slide 29: OUTsurance Business
OUTsurance Business OUTsurance Business key financial outcomes R’million 2022 2021 % change Gross written premium 2 091 1 713 22.1% • Annualised new business premium increased by 21%. Net earned premium 2 013 1 673 20.3% • Resumption of positive unit growth in the Operating profit 57 97 (41.2%) Dire
Slide 30: Financial Review
Financial Review Part 1: Group consolidated results 44% of Group GWP 73% of Group operating profit Part 2: OUTsurance results (2021:46%) (2021:68%) 53% of Group GWP 23% of Group operating profit Part 3: Youi results (2021:51%) (2021:32%) 3% of Group GWP 4% of Group operating profit Part 4: OUTsuranc
Slide 31: Youi
Youi Youi Australia key financial outcomes R’million 2022 2021 % change • Annualised new business premium written increased by 30%. Gross written premium 12 481 10 513 18.7% • BZI was the primary driver to the growth in Net earned premium 9 499 8 207 15.7% annualised new business premium written. Op
Slide 32: Financial Review
Financial Review Part 1: Group consolidated results 44% of Group GWP 73% of Group operating profit Part 2: OUTsurance results (2021:46%) (2021:68%) 53% of Group GWP 23% of Group operating profit Part 3: Youi results (2021:51%) (2021:32%) 3% of Group GWP 4% of Group operating profit Part 4: OUTsuranc
Slide 33: OUTsurance Life
OUTsurance Life R’million 2022 2021 % change • Annualised new business premium written Gross written premium 798 650 22.8% increased by 46% with a positive contribution from all products. Operating profit 107 (25) >100% Funeral (incl Shoprite) (1) (39) (87.2%) • The largest contributor to premium gr
Slide 34: Financial Review
Financial Review Part 1: Group consolidated results 44% of Group GWP 73% of Group operating profit Part 2: OUTsurance results (2021:46%) (2021:68%) 53% of Group GWP 23% of Group operating profit Part 3: Youi results (2021:51%) (2021:32%) 3% of Group GWP 4% of Group operating profit Part 4: OUTsuranc
Slide 35: Capital and balance sheet
Capital and balance sheet Solvency ratios June June December • The Youi Group’s capital ratio decreased from 3.0 SCR ratio (times) 2022 2021 2021 Target to 2.3 as a result of the large increase in the SCR for the year linked to growth, increased OUTsurance 1.7 1.8 1.7 1.25 reinsurance retention and
Slide 36: Capital and balance sheet: Dividend per share
Capital and balance sheet Dividend per share (cents) • The Group’s dividend profile is highly correlated to earnings 82.0 17.5% lower overlaid with the growth profile and therefore capital intensity of ordinary dividend in the businesses. line with earnings 12.0 7.0 result • During periods of higher
Slide 37: Outlook
Outlook You always get something out.
Slide 38: Group outlook
Group outlook Operational outlook for 2023 and beyond • We expect the global and local economic backdrop to remain volatile for the foreseeable future. • The major strategic focus for 2023 is to drive the growth initiatives to profitability and target margins. • The inflationary environment and hard
Slide 39: Thank you
Thank you Contact: InvestorRelations@out.co.za www.outsurance.co.za/group
Slide 40: Forward-looking statement disclaimer
Forward-looking statement disclaimer This presentation contains statements about the OUTsurance Group that are or may be forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements. These forward-looking statements are
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