Investment reviews


RMI was formed during 2011 as a result of a restructuring by RMBH, whereby the insurance and banking interests of RMBH were separated and the insurance interests unbundled and listed as RMI on the JSE. The contribution of RMI to Remgro’s headline earnings for the year under review increased to R871 million (2013: R666 million).

The underlying investments of RMI (with % interest in brackets) include Discovery Holdings Limited (25%), MMI Holdings Limited (25%), OUTsurance Holdings Limited (83%) and RMB Structured Insurance Limited (76%). Discovery services the healthcare funding and insurance markets in South Africa, the United Kingdom and China. MMI was formed from the merger of Metropolitan and Momentum, focusing on long-term insurance, short-term insurance, asset management, healthcare administration and employee benefits. OUT­surance is a direct personal lines and small business short-term insurer, while RMB Structured Insurance creates individual insurance and financial risk solutions for large corporates by using sophisticated risk techniques and innovative financial structures.

RMI’s reported headline earnings for its year ended 30 June 2014 increased by 28% to R2 879 million (2013: R2 242 million). OUTsurance, Discovery and MMI contributed R1 229 million (2013: R1 031 million), R802 million (2013: R551 million) and R807 million (2013: R628 million) respectively. However, the group believes that normalised earnings more accurately reflect operational performance and therefore headline earnings are adjusted to take into account non-operational items and accounting anomalies.

RMI’s normalised earnings for the year under review increased by 18% to R3 022 million (2013: R2 566 million). Discovery’s contribution to normalised earnings increased by 24% to R866 million (2013: R699 million), as the group’s overall new business grew by 15% and its UK operations continued to perform exceptionally well. MMI contributed R899 million (2013: R803 million) to RMI’s normalised earnings representing an increase of 12% from the previous year, as all operating divisions performed well and expense savings from the merger was achieved. The contribution of OUTsurance to normalised earnings increased by 18% to R1 219 million (2013: R1 031 million), as the group experienced new business growth of 35% and Youi, the group’s direct personal lines business in Australia, performed exceptionally well.