Financial services

Profile: OUTsurance Group is a group of leading insurance and financial services providers, operating in two key markets. In South Africa, OUTsurance offers car, home, business, life, funeral and pet insurance. In Australia, Youi provides car, home, business and compulsory third-party (CTP) insurance. In 2024 OUTsurance Group entered a third market in Ireland.

Corporate information

Sustainability measures

OUTsurance Group’s contribution to Remgro’s headline earnings increased by 29.4% to R1 398 million (2024: R1 080 million). On a normalised earnings basis, which excludes certain anomalies, OUTsurance Group reported an increase of 33.7% to R4 728 million (2024: R3 536 million). This increase is mainly due to a higher contribution from OUTsurance Holdings Limited (OUTsurance), the most significant asset in OUTsurance Group. OUTsurance’s normalised earnings increased by 29.6% to R4 962 million (2024: R3 830 million). The pleasing earnings result was supported by strong organic growth, favourable natural perils losses, lower reinsurance costs and higher investment income. The improved earnings outcome for the year was achieved despite the large increase in the share-based payments expense and the higher start-up loss recorded for OUTsurance Ireland.

The elevated employee share-based payments expense is linked to the OUTsurance share price which increased by 68.7% over the financial year. The final tranche vests in September 2025 after which all vintages of the long-term incentives will be transitioned to the new Conditional Share Plan, which is less geared and will result in a more stable expense base. The share-based payments expense linked to the outgoing scheme was R1 300 million for the financial year under review. This is R656 million higher than the previous financial year.

OUTsurance Group is the listed entity in which Remgro has a 30.5% interest.

The primary business of OUTsurance Group is:

OUTsurance SA consists of two main operational segments: OUTsurance Personal and OUTsurance Business. The normalised earnings increased by 32.4% to R2 928 million (2024: R2 212 million). This is due to its strong operational performance on the back of premium inflation, pleasing organic growth, favourable weather and a lower observed claims frequency, despite an expense of R1 105 million linked to the outgoing employee share scheme. Overall, OUTsurance SA delivered 9.7% and 9.9% growth in gross written and net earned premiums, respectively. The higher growth in net earned premium is due to favourable reinsurance pricing. The claims ratio improved from 49.8% to 44.6% with both the Personal and Business segments delivering improved outcomes. Measured as a percentage of net earned premiums, natural perils claims decreased from 5.9% to 4.0% with a notable absence of large catastrophic events.

OUTsurance Life’s normalised earnings increased by 66.2% to R349 million (2024: R210 million). This is attributable to good new business momentum in both the Direct and Funeral segments. Operating profit growth is also supported by improved cost efficiency in the business following a period of strategic simplification. OUTsurance Life incurred a significant additional cost linked to the higher outgoing employee scheme share-based payments expense of R132 million (2024: R64 million). If the elevated share-based expense is ignored, OUTsurance Life achieved a Value of New Business (VNB) margin of 19.8% compared to 12.5% in the prior year. Including the share-based expense, the VNB margin achieved is 14.7% compared to 9.0% in the comparative year. The reduced operating expense profile contributed to the improved margins.

The Youi group’s (Youi) normalised earnings increased by 45.5% to R2 290 million (2024: R1 574 million). This is attributable to impressive topline growth and operating performance for the year under review. The strong premium growth is attributed to the Direct book where Youi delivered good organic growth overlaid with the impact of continued premium inflation. Premium inflation turned in the second half of the year and is moderating in line with the slowing inflationary trends. During the current year, Youi discontinued its participation in the broker distribution channel BZI. In addition to premium inflation, the healthy operating profit growth was achieved by strong organic growth and lower claims experience. Despite Cyclone Alfred, a severe tropical cyclone that made landfall in March 2025 in South East Queensland and the New South Wales North Coast, Australia, Youi’s natural peril claims as a percentage of net earned premiums were 1.4% lower than the previous financial year. Gross written premium accelerated by 19.7% in rand terms, despite the rand having strengthened by 4.2% against the Australian dollar. In Australian dollars the growth was 25.1%. The claims ratio decreased from 61.1% to 58.5% on account of the favourable weather and prior year claims liability development.

OUTsurance Ireland, which officially launched in May 2024, gained good traction in the Irish market generating R269 million gross written premium in its first full year of operations. Normalised losses increased to R402 million (2024: normalised loss of R180 million). The operating loss and net claims expense is skewed by the requirement to account for an onerous loss. The onerous loss allowance is required by IFRS 17 due to the sub-scale nature of the business. As the business scales, the onerous loss balance will decrease. The operating loss, excluding onerous losses, has increased as a result of increased operational costs incurred related to marketing and operational infrastructure.