Full Year 2024 OUTsurance Group Ltd Earnings Call Transcript
Key Points
- OUTsurance Group Ltd (JSE:OUT) reported a 20.3% growth in normalized earnings to ZAR3.5 billion.
- Operating profit for OUTsurance Personal was up 24%, benefiting from improvements in both cost and claims ratios.
- OUTsurance Life saw an 82% increase in operating profit, driven by discontinuing face-to-face brokers and improving cost ratios.
- Youi Personal achieved a 26.8% growth in gross written premium in rand terms, with operating profit up 6.3%.
- The Group's investment income contributed significantly to earnings, with a 79.2% increase in Australia and 26.1% in South Africa.
- Elevated claims inflation due to supply chain issues, technological changes, and regulatory changes impacted profitability.
- The BZI channel in Youi experienced slower growth due to corrective pricing actions, resulting in an operating loss.
- OUTsurance Ireland is expected to take five years to break even, with a gradual ramp-up in operations.
- The increase in share-based payments expense was ZAR335 million higher than expected, impacting overall profitability.
- The direct commercial market in South Africa faced slow growth due to economic pressures and high market share saturation.
Good morning, everyone. Thank you for the opportunity to present to you on the OUTsurance Group financial results for the year ending 30 June 2024. I'm Marthinus Visser, the Group CEO. I've got with me, Jan Hofmeyr, the Group CFO, and we'll be following the normal pattern. I'll do the operational review, then Jan will do the financial review, and then we'll finish things off the outlook and the strategic focus areas.
I think it's fair to say that it's a pleasing set of results, but let's see how that's been impacted by the different aspects. So first of all, the macroeconomic trends, as these do affect our business and the first one being CPI inflation. As you can see in the slide, CPI inflation in our three markets started off very low and then it spiked as we came out of COVID and now it's a normalizing again.
Importantly, to understand, though, that there is not a perfect link between CPI inflation and claims inflation and expense inflation, which is the real drivers in our business. And the reason
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