Outsurance Group Limited · JSE:OUT
Outsurance — RMI Holdings — FY2020 Earnings Presentation
22 slides from Outsurance's earnings presentation, Sep 28, 2020
Slide 1: RMI Investor Call: FY20 Results and Portfolio Update
28 September 2020 RMI INVESTOR CALL FY20 RESULTS AND PORTFOLIO UPDATE
Slide 2: Introductory Remarks
INTRODUCTORY REMARKS
Slide 3: Key Themes Identified
KEY THEMES IDENTIFIED 1 VALUES 2 STRONG OPERATIONAL PERFORMANCE 3 INVESTMENT ACTIVITY 4 PRUDENCE 5 PLANNING FOR THE FUTURE 2
Slide 4: The Core Values of the Group Have Shone Through
1 THE CORE VALUES OF THE GROUP HAVE SHONE THROUGH Across the group we saw our values driven culture and sense of community come to the fore in response to the challenging and unprecedented environment COMMUNITY • RMI established a COVID-19 relief fund through voluntary contributions from senior mana
Slide 5: The Core Values of the Group Have Shone Through: Innovation
1 THE CORE VALUES OF THE GROUP HAVE SHONE THROUGH Our group companies have also responded innovatively to meet the needs of customers in this ‘new normal’ INNOVATION • Fully digital self-service functions, including capturing claims related to windscreens and geysers online end-to-end. • ONEfee inno
Slide 6: Group Companies Have Shown Strong Operational Performance Despite a Difficult Environment
GROUP COMPANIES HAVE SHOWN STRONG OPERATIONAL 2 PERFORMANCE DESPITE A DIFFICULT ENVIRONMENT RMI OPERATIONAL EARNINGS WATERFALL Fall Rise R5.06bn R4.75bn * FY2019 OUT Discovery MMH Hastings IMG Operating profit • Portfolio companies have shown strong operational robustness despite significant investm
Slide 7: Positive Investment Activity Within the Group
3 POSITIVE INVESTMENT ACTIVITY WITHIN THE GROUP • On 1 September 2020 AlphaCode had its first exit with 100% of Luno being sold to DCG, a large crypto-currency fund • The exit was above RMI’s ZAR target hurdle rate of 25% - 35% for our AlphaCode investment portfolio • RMI is excited about this new p
Slide 8: All the While With a Focus on Remaining Prudent: COVID Impact on Results
4 ALL THE WHILE WITH A FOCUS ON REMAINING PRUDENT COVID IMPACT ON RESULTS COVID-19 provisions and specific economic losses Fall Rise R4.75bn R5.06bn * Discovery’s results included the impact of R3.4bn R4.75bn of provisions. Other impacts on headline earnings such as tax effects on normalised economi
Slide 9: Focused on Remaining Prudent in Uncertain Times
4 ALL THE WHILE WITH A FOCUS ON REMAINING PRUDENT FOCUSED ON REMAINING PRUDENT IN UNCERTAIN TIMES The heightened medium-term economic and insurance-related uncertainty across the jurisdictions and businesses within the RMI portfolio has necessitated a focus on RMI’s capital structure and approach to
Slide 10: Planning for the Future: Risk Assessment
OVERARCHINGLY, THE GROUP IS FOCUSED ON PLANNING 5 FOR THE FUTURE i Risk assessment COVID-19 risk perception around the world (May, 2020) ➢ Impact on risk assessment and tolerance Current mean risk perception score globally • New research argues that the nature of COVID-19 risk is of close to 5 on be
Slide 11: Planning for the Future: Climate Change and Catastrophe Losses
OVERARCHINGLY, THE GROUP IS FOCUSED ON PLANNING 5 FOR THE FUTURE i Risk assessment Climate change is likely to continue to have a marked impact on P&C insurance, as global insured losses from natural catastrophes continue to increase Catastrophe-related insured losses (1970-2019) 2019 The 10 year mo
Slide 12: Planning for the Future: Reinsurance Market
OVERARCHINGLY, THE GROUP IS FOCUSED ON PLANNING 5 FOR THE FUTURE i Risk assessment Reinsurance market’s reaction to the pandemic and natural catastrophes will be critical to certain risk categories Reinsurance market for natural catastrophes are hardening as seen in Australia following the bushfires
Slide 13: Planning for the Future: Digital Adoption
OVERARCHINGLY, THE GROUP IS FOCUSED ON PLANNING 5 FOR THE FUTURE ii Digital adoption The pandemic has exponentially accelerated adoption of online engagement generally across the globe Source: McGowan, H. How the Coronavirus pandemic is accelerating the future of work. Forbes, 2020. 12
Slide 14: Insurance Sector Behind in Digital Services
OVERARCHINGLY, THE GROUP IS FOCUSED ON PLANNING 5 FOR THE FUTURE ii Digital adoption And historically, on average, the insurance sector has been behind other consumer markets in providing digital services Customer perception of digital services amount industries, 2020 • While in the short term the p
Slide 15: Underlying Companies' Digital Strategies
OVERARCHINGLY, THE GROUP IS FOCUSED ON PLANNING 5 FOR THE FUTURE ii Digital adoption RMI’s underlying companies have well-defined digital strategies and are focused on continuously improving customer’s digital experience • Over 100 000 customers downloaded the OUTsurance • Discovery • MMH fast-track
Slide 16: Focusing on OUTsurance
FOCUSING ON OUTSURANCE
Slide 17: OUTsurance Performance Overview
OUTSURANCE PERFORMANCE OVERVIEW • The OUTsurance Group has delivered a resilient operational and financial performance since the outbreak of the pandemic. • Operationally, OUTsurance and Youi have adapted well to WFH without impacting negatively on customer service levels. There have been no job los
Slide 18: Growth Initiatives: 2020 Update and Looking Ahead
GROWTH INITIATIVES 2020 update and looking ahead ACHIEVED IN 2020 LOOKING AHEAD ACHIEVED IN 2020 LOOKING AHEAD Expansion of the commercial insurance product offering Launch the Blue Zebra Insurance commercial Initiatives launched: • Focus on Home insurance product • Underwriting of the insurance pro
Slide 19: Results Summary: Key Performance Indicators
RESULTS SUMMARY KEY PERFORMANCE INDICATORS R’m Jun-20 Jun-19 % change Operating earnings 3 234 3 173 2.0% Normalised earnings 2 411 2 634 (8.5%) Key performance metrics Adjusted gross written premiums 17 512 15 906 10.0% (before COVID-19 discounts and Youi New Zealand) Claims ratio 51.1% 51.1% Cost-
Slide 20: Unpacking Key Metrics
UNPACKING KEY METRICS GROSS WRITTEN PREMIUMS (R’m) KEY RATIOS (%) 551 503 86.30% 440 469 82.70% 80.90% 81.60% 392 79.00% 77.30% 7 942 7 252 7 071 6 763 7 342 55.50% 54.40% 51.30% 49.80% 51.10% 51.10% 28.20% 28.30% 29.40% 26.20% 25.80% 25.60% 8 380 8 856 7 020 7 396 7 796 Jun-16 Jun-17 Jun-18 Jun-19
Slide 21: Unpacking Growth, Costs and Claims
UNPACKING GROWTH, COSTS AND CLAIMS PERSONAL LINES PERSONAL LINES GWP OUTSURANCE PERSONAL LINES: KEY METRICS 72 72.1 74.1 69.8 70 Cost ratio increased 7 942 51.2 from 2017 onwards 49.7 49.3 7 023 46.2 46.4 because of investment in 7 034 6 806 6 538 growth and digitalisation. Cost ratio has started to
Slide 22: Thank you
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