Slide 1: Financial results for the year ended 30 June 2024
OUTsurance Group Limited Financial results for the year ended 30 June 2024
Slide 2: Agenda
Agenda Operational review Marthinus Visser Financial review Jan Hofmeyr Outlook and strategic focus areas Marthinus Visser
Slide 3: Operational review
Operational review yy
Slide 4: Macro-economic trends
Macro-economic trends Inflation and interest rate environment impacting operational performance CPI Inflation Interest rates Exchange rates 20.15 9.1% 8.25% 8.25% 19.51 18.79 7.4% 17.15 16.91 18.19 17.56 6.0% 6.1% 4.9% 6.1% 15.80 5.1% 4.75% 4.35% 15.70 4.10% 15.28 5.4% 3.75% 3.50% 3.8% 3.80% 11.99 1
Slide 5: Overview of key operational themes
Overview of key operational themes OUTsurance SA and OUTsurance Life OUTsurance SA OUTsurance SA OUTsurance Personal Business Life Operating environment Operating environment Operating environment • High inflation remained the primary • Period of consolidation for • Strong growth in Shoprite Funeral
Slide 6: Overview of key operational themes
Overview of key operational themes Youi Youi Youi Youi Personal Business CTP Operating environment Operating environment Operating environment • Sustained high claims inflation • Growth stimulated with the launch of • Recovery of new business volumes in environment BZI’s commercial product on New So
Slide 7: OUTsurance Ireland
OUTsurance Ireland OUTsurance Ireland Personal • Regulatory authorisation achieved on 1 January 2024 • Launched in April 2024 • Offers car and home insurance direct to the Irish market • Incremental launch phase that steps up with growing confidence in pricing and operational execution • Performance
Slide 8: P&C new business premium performance
P&C new business premium performance Inflation and good organic growth drives large increase in premium P&C Annualised new business premium written (R’million) +30.4% • Annualised new business premium written accelerated 30.4%. 10 055 • The largest contribution is from Youi where inflation, elevated
Slide 9: Premium performance
Premium performance Inflation and good organic growth drive large increase in premium P&C gross written premium (R’million) 12 153 14 362 14 468 14 558 15 632 16 904 19 920 22 734 27 559 33 200 10-year CAGR = 12.6% 5-year CAGR = 16.3% +20.5% • P&C Gross Written Premium accelerated by 20.5%. • High i
Slide 10: Operating profit performance
Operating profit performance Robust operating profit achieved at OUTsurance SA and Youi P&C operating profit (R’million) 1 930 2 532 3 147 3 507 3 131 3 248 3 357 2 726 4 086 4 433 +8.5% 10-year CAGR = 9.4% 5-year CAGR = 7.2% • P&C operating profit CAGR is lagging premium growth due to the large inv
Slide 11: Natural perils exposure
Natural perils exposure More normal natural perils claims in FY24 in Australia following very benign FY23 Net retained natural perils losses as % of net earned premium Claims ratio analysis 0.1% 19.6% 8.5% 12.6% 5.6% 5.9% 13.2% 13.1% 12.2% 12.4% 12.6% 9.7% 50.2% 48.9% 50.7% 48.9% 9.5% 9.1% 8.5% 9.8%
Slide 12: Earnings profile – impact of growth initiatives
Earnings profile – impact of growth initiatives Reduced earnings strain from new initiatives and investment in Ireland ramping up Operating losses generated by growth initiatives as % of profit from mature business units (R’million) 18.0% 18.5% 16.5% • Appetite for new venture losses is set at 10% 1
Slide 13: Financial review
Financial review
Slide 14: Impact of share price growth on the share-based payments expense
Impact of share price growth on the share-based payments expense OUTsurance Group share price 55 FY 2023 FY 2024 • The OUTsurance SA operation utilised Share Options (ESOP) as a long-term incentive (LTIP) prior the listing transition. 50 22% 37% • In 2023, new LTIP’s were transitioned to Conditional
Slide 15: Financial review
Financial review PART 1 PART 2 PART 3 PART 4 PART 5 OGL and OHL OUTsurance Youi Group OUTsurance Dividend and consolidated SA results results Life results capital position results OUTsurance Group Limited financial results 2024
Slide 16: OGL Group consolidated results overview
OGL Group consolidated results overview Key performance outcomes R’ million 2024 2023 % change Normalised earnings 3 536 2 939 20.3% Normalised ROE 26.2% 23.4% • The differential between OGL and OHL earnings growth is linked to: Normalised earnings per share (cents) 230.6 191.9 20.2% Diluted normali
Slide 17: OHL Group consolidated results overview
OHL Group consolidated results overview OHL GROUP NORMALISED EARNINGS (R’ million) OHL GROUP NORMALISED ROE (%) 2 411 2 779 2 316 3 310 3 830 30.7% 29.8% 1469 251 1258 25.6% 196 1 885 357 74 2 541 632 22.9% 22.0% 556 2 107 1 896 1 659 (56) (180) 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 OUTs
Slide 18: Operational performance – Property and Casualty
Operational performance – Property and Casualty P&C key performance outcomes R’ million 2024 2023 % change (4.9%) Gross written premium 33 200 27 559 20.5% Net earned premium 28 841 23 726 21.6% Annualised new business premium written 10 055 7 710 30.4% P&C OPERATING 44.5% PROFIT Operating profit 4
Slide 19: Impact of investment income on operating profit
Impact of investment income on operating profit Proportional contribution of investment income to operating profit Youi Group Property P&C GroupGroup and Casualty OUTsurance SA Youi 78.9% 90.0% 88.9% 93.9% 98.1% 99.0% 21.1% 10.0% 11.1% 6.1% 1.9% 1.0% 2023 2024 2023 2024 2023 2024 Underwriting result
Slide 20: Financial Review
Financial Review PART 1 PART 2 PART 3 PART 4 PART 5 OGL and OHL OUTsurance Youi Group OUTsurance Dividend and consolidated SA results results Life results capital position results OUTsurance Group Limited financial results 2024
Slide 21: OUTsurance SA
OUTsurance SA OUTsurance SA key financial outcomes R’ million 2024 2023 % change • Elevated premium inflation remained the primary Gross written premium 12 174 11 160 9.1% driver in GWP growth. Net earned premium 11 963 10 938 9.4% • Real growth in policy count owing to good execution in Direct and
Slide 22: OUTsurance Personal
OUTsurance Personal Gross written Operating profit Combined ratio premium + 8.4% +24.0% 74.6% 71.4% • Excluding the HOC book in run-off Personal lines gross written premium 2 822 9 451 increased by 9.4%. • The claims ratio improvement is 8 722 20.8% 20.4% attributed to lower working claims ratios 2
Slide 23: OUTsurance Business
OUTsurance Business Gross written Operating profit Combined ratio premium 2 438 2 723 260 445 90.2% 85.0% • 11.7% growth in GWP attributed to inflation and 26.4% growth in the +71.2% + 11.7% OUTsurance Broker channel. 451 • Strong operating profit performance by 389 OUTsurance Brokers in H2-2024. 34
Slide 24: Financial review
Financial review PART 1 PART 2 PART 3 PART 4 PART 5 OGL and OHL OUTsurance Youi Group OUTsurance Dividend and consolidated SA results results Life results capital position results OUTsurance Group Limited financial results 2024
Slide 25: Youi Group
Youi Group Youi group key financial outcomes • Gross written premium growth accelerated by R’million 2024 2023 % change 28.2% in Rand and 25.4% in Australian Dollars. Gross written premium 21 018 16 399 28.2% • Natural perils losses increased from 8.5% in 2023 to 12.6% in 2024. Net earned premium 16
Slide 26: Youi Group
Youi Group Gross written Operating profit Combined ratio premium • Sustained high premium inflation owing to rising 16 399 21 018 1 857 1 973 87.6% 91.2% repair costs. • In AUD, gross and net earned premiums grew by + 28.2% +6.2% 25.4% and 29.2%, respectively. • Higher claims ratio driven by natural
Slide 27: Youi Personal
Youi Personal Gross written Operating profit Combined ratio premium • Strong GWP growth attributed to the higher 86.6% 89.9% premium inflation and good operational + 26.8% execution in the core Direct channel. + 6.3% • Slowing premium growth in BZI in response to 18 966 corrective pricing actions to
Slide 28: Financial Review
Financial Review PART 1 PART 2 PART 3 PART 4 PART 5 OGL and OHL OUTsurance Youi Group OUTsurance Dividend and consolidated results results Life results capital position results OUTsurance Group Limited financial results 2024
Slide 29: OUTsurance Life
OUTsurance Life • 62.3% operating profit improvement in the Life Direct segment is attributed non-repeat of the F2F loss in the R’million 2024 2023 % change prior year, improved financial result for Direct Funeral, Accounting measures and favourable yield environment. Operating profit 264 145 82.1%
Slide 30: Financial Review
Financial Review PART 1 PART 2 PART 3 PART 4 PART 5 OGL and OHL OUTsurance Youi Group OUTsurance Dividend and consolidated SA results results Life results capital position results OUTsurance Group Limited financial results 2024
Slide 31: Structural change - removal of the OUTsurance Employee Share Trust
Structural change - removal of the OUTsurance Employee Share Trust • At the listing transition in 2022, we stated our intention to ultimately roll-up the OHL minority interest to OGL within three years. The roll-up exercise will ensure full alignment between all shareholders and simplify reporting.
Slide 32: Capital and dividends
Capital and dividends All operating units in strong solvency positions OGL ordinary and special dividends declared per share (cents) 76.1% 80.0% SCR ratio 71.8% (pre final dividend) 2024 2023 Target 70.0% 40.0 60.0% 56.6% 8.5 OHL Group 2.3 2.2 1.5 • 50.0% Final ordinary dividend 174.4 142.0 Property
Slide 33: Outlook & strategic focus areas
Outlook & strategic focus areas
Slide 34: Group outlook
Group outlook Operational outlook for 2025 • The Group is well poised for continued organic growth. • A more consolidated strategy focused on execution in our core markets will be our focus in 2025 supporting the objective of translating top line growth to bottom line growth. • Our organic growth st
Slide 35: Strategic focus for 2025
Strategic focus for 2025 Our top-of mind issues for resilient growth of our simplified set of insurance products and channels Systems OUTsurance OUTsurance SA OUTsurance SA modernisation Ireland Business Personal Continue the journey to incrementally replace the core Profitably scale OUTsurance Cons
Slide 36: 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
Slide 37: Thank you
Thank you Contact: InvestorRelations@out.co.za group.outsurance.co.za
Slide 38: Supplementary information
Supplementary information OUTsurance Group Limited financial results 2024
Slide 39: IFRS 17 transition
IFRS 17 transition First time adoption of IFRS 17 – limited impact on Group’s earnings profile on 1 July 2022 transition date Group OUTsurance Youi Group OUTsurance Life PAA approach PAA approach General model Material transitional impact due to • Group earnings are predominantly from P&C activities
Slide 40: OUTsurance Group Limited financial results 2024
OUTsurance Group Limited financial results 2024