Outsurance Group Limited · JSE:OUT
Outsurance — H1 2022 Earnings Presentation
32 slides from Outsurance's earnings presentation, Mar 16, 2022
Slide 1: RMI Interim Results Call
RMI INTERIM RESULTS CALL 16 March 2022 FOCUS • COLLABORATE • GROW STRICTLY PRIVATE AND CONFIDENTIAL
Slide 2: OUTsurance Group Interim Financial Results
OUTsurance Group Interim Financial Results 31 December 2021 (unaudited)
Slide 3: Strategic and operational review
Strategic and operational review
Slide 4: Growth strategy update
Growth strategy update Personal lines Strategy Delivered in the six months Growth metric operations under review OUTsurance Profitably expand market share through Positive in-force policy count growth delivered Gross written premium up by 5.8% Personal continuous optimisation in marketing, pricing a
Slide 5: Overview of key operational themes
Overview of key operational themes OUTsurance Youi OUTsurance Life ▷ Increasing premium inflation ▷ Strong new business growth from environment. ▷ Strong new business growth enabled Funeral segment. by BZI and CTP. ▷ Satisfactory new business ▷ Satisfactory increase in VNB margins performance with i
Slide 6: Corporate developments
Corporate developments ▷ Hastings disposal ► Sale price representing 37% premium to November 2021 privatisation offer. ► 38% return on the original investment made in 2017 (18.4% IRR). ► R2.4 billion profit realised for the OUTsurance Group. ► Special dividend of 82 cents per share paid in December
Slide 7: Group consolidated financial results overview
Group consolidated Financial results overview
Slide 8: Group results overview
Group results overview Gross written and net earned premiums Annualised new business premium written (R’million) (R’million) ▷ Translated premium income and new business premium written was negatively impacted by the 5.9% appreciation in the average AUD/ZAR exchange rate for the six months under rev
Slide 9: Group results overview continued
Group results overview continued Normalised earnings drivers for H1-2022 (R’million) ▷ Both OUTsurance and Youi delivered lower earnings outcomes on the back of elevated natural perils claim experience. Youi experienced a higher number of events and retained losses were amplified by the increased ev
Slide 10: Group results overview continued
Group results overview continued Impact new initiative investment on operating profit (R’million) ROE (%) 38.1% 35.9% Following the disposal 32.8% of Hastings the Group 31.8% 31.2% ROE will trend 27.0% 25.8% 24.9% towards the 23.2% 23.6% Operational ROE. Dec '17 Dec '18 Dec '19 Dec '20 Dec '21 Group
Slide 11: Group results overview continued
Group results overview continued Sources of normalised earnings Six months ended 31 December R'million 2021 2020 % change OUTsurance 937 1 018 (8.0%) Youi Group 123 406 (69.7%) OUTsurance Life (21) 18 (>100%) Earnings from associates 66 91 (27.5%) Minorities (25) (63) 60.3% Central and new business
Slide 12: Group outlook
Group outlook ▷ Rising premium inflation as a result of normalisation of accident frequencies, supply driven repair cost inflation, higher natural perils losses and reinsurance premium is expected to be a net positive for the Group over the longer term. ▷ The Ukraine conflict introduces macro uncert
Slide 13: OUTsurance Results overview
OUTsurance Results overview (SA short-term insurance)
Slide 14: OUTsurance results overview (SA short-term insurance)
OUTsurance results overview (SA short-term insurance) Headline earnings and operating profit Normalised earnings drivers for H1-2022 (R’million) (R’million) Key ratio analysis OUTsurance Holdings
Slide 15: OUTsurance Personal results overview
OUTsurance Personal results overview OUTsurance Personal Gross written premium Six months ended 31 (R’million) December +5.8% R'million 2021 2020 % change Gross written premium 4 045 3 822 5.8% 4 045 3 822 3 704 3 502 3 294 Net earned premium 3 957 3 747 5.6% Underwriting profit 1 040 1 118 (7.0%) O
Slide 16: OUTsurance Business results overview
OUTsurance Business results overview OUTsurance Business Gross written premium (R’million) Six months ended 31 December +22.9% R'million 2021 2020 % change Gross written premium 1 019 829 22.9% 829 770 Net earned premium 978 805 21.5% 1 019 648 576 Underwriting profit 6 102 (94.1%) Operating profit
Slide 17: Youi Results overview
Youi Results overview
Slide 18: Youi results overview
Youi results overview Normalised earnings and operating profit (Youi Australia) Normalised earnings drivers for H1-2022 (Youi Group) (R’million) (R’million) Large earnings decrease associated with higher natural perils retention following changes in RI structure. Gross written and net earned premium
Slide 19: Youi results overview continued
Youi results overview continued Youi Australia Six months ended 31 December R'million 2021 2020 % change Gross written premium 6 149 5 181 18.7% Net earned premium 4 644 4 038 15.0% Underwriting profit 160 543 (70.5%) Operating profit 169 570 (70.4%) Claims ratio (%) 62.0% 53.4% Cost-to-income ratio
Slide 20: Youi results overview continued
Youi results overview continued ▷ New south Wales and Queensland flood update – March 2022 ▷ Estimated gross exposure of $80 million ▷ Net retained exposure expected between $2 million and $6 million depending on interpretation of number of individual weather events related to the extensive flooding
Slide 21: OUTsurance Life Results overview
OUTsurance Life Results overview
Slide 22: OUTsurance Life results overview
OUTsurance Life results overview OUTsurance Life Embedded value (R'million) Six months ended 31 Six months December ended 31 R'million 2021 2020 % change December 30 June Gross written premium 386 312 23.7% R'million 2021 2021 % change Net earned premium 343 283 21.2% Underwritten Life 1 127 1 089 3
Slide 23: RMI Investment Managers
PR BN INVESTMENT ‘@) RMI managers ce IDENTIFY, PARTNER, GROW
Slide 24: RMI IMG Portfolio of Affiliates and Partners
RMI IMG Portfolio of Affiliates and Partners 24
Slide 25: Update on IMG portfolio: Performance and AUM Growth
Update on IMG portfolio | Performance and AUM Growth INVESTMENT PERFORMANCE | DEC’21 COLLECTIVE AUM (R’BN) Proportion of funds in each quartile Since Acquisition 250 000 69% 71% 75% 71% 75% 69% 58% 64% 61% ABOVE MEDIAN 100% 5 5 3 4 6 6 R209bn 90% 11 6 6 200 000 80% 10 8 12 9 9 9 5 13 70% 5 1st Quart
Slide 26: Update on IMG portfolio: Transformation
Update on IMG portfolio | Transformation AFFILIATE B-BBEE CREDENTIALS GENDER TRANSFORMATION 4 3 228 Number of collective affiliate employees Number of Affiliates RMI IMG's B-BBEE benchmark for its affiliates 46% Female Staff Members 2 21% Female Portfolio Managers 1 (Industry average 10.7%*) 0 Level
Slide 27: RMI Interim Results and Dividend
RMI INTERIM RESULTS AND DIVIDEND FOCUS • COLLABORATE • GROW
Slide 28: 1HFY2022 Results
1HFY2022 RESULTS Normalised earnings for the six months ended 31 December 2021 Rm Dec 2021 Dec 2020 % change Continuing operations OUTsurance (excluding Hastings) 1 037 1 351 (23) OUTsurance (including Hastings) 1 102 1 437 (23) Hastings included in OUTsurance (65) (86) 24 RMI Investment Managers an
Slide 29: 1HFY2022 Results: Looking at MMH and Discovery
1HFY2022 RESULTS Looking at MMH and Discovery o Discovery’s normalised earnings increased by 26% to R2.9 billion during the six months. o Normalised earnings were positively impacted by mark-to-market foreign currency gains arising from a weakening of the Rand. o Momentum Metropolitan’s normalised e
Slide 30: Interim and special dividend
INTERIM AND SPECIAL DIVIDEND Interim and special dividend of 165.5 cents per share • In line with RMI’s dividend policy to return excess free cash generated to its shareholders, the board resolved to declare an interim dividend of 23.5 cents (2020: 22.5 cents) per ordinary share. • The interim divid
Slide 31: RMI Future Strategy
RMI FUTURE STRATEGY FOCUS • COLLABORATE • GROW
Slide 32: RMI Value Unlock and Future Strategy
RMI VALUE UNLOCK AND FUTURE STRATEGY RMI VALUE UNLOCK ○ Through the implementation of the Unbundling, RMI will return value to shareholders of c.R33.4 billion (based on the market capitalisation of Discovery and Momentum Metropolitan or R21.83 per share as at 11 March 2022, being the last practicabl
RMI (OUTsurance Group Limited) — H1 2022 Earnings Presentation on 6ix