Profile

RMI is a listed investment entity holding interests in Discovery Holdings Limited, MMI Holdings Limited, OUTsurance and RMB Structured Insurance.

RMI HOLDINGS LIMITED (RMI)

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 R986 million (2014: R871 million).

The underlying investments of RMI (with percentage 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, United States 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 2015 increased by 13% to R3 258 million (2014: R2 879 million). OUTsurance, Discovery and MMI contributed R1 171 million (2014: R1 229 million), R1 362 million (2014: R802 million) and R699 million (2014: R807 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 5% to R3 160 million (2014: R3 022 million). Discovery’s contribution to normalised earnings increased by 17% to R1 012 million (2014: R866 million), as the group’s overall new business grew by 15% and all of its platforms continued to perform well. MMI contributed R956 million (2014: R899 million) to RMI’s normalised earnings, representing an increase of 6% from the previous year. The value of its new business grew by 22%, but MMI’s overall earnings growth was, however, restricted by investments into new initiatives that are being pursued in line with its strategy of growth, client-centricity and excellence. The contribution of OUTsurance to normalised earnings decreased by 4% to R1 166 million (2014: R1 219 million), as a result of a higher claims ratio in the group’s direct personal lines business due to natural catastrophes in Australia, as well as start-up losses incurred in its New Zealand business.