OUTsurance Holdings reported steady earnings growth, supported by strong premium growth and improved cost efficiency, even as severe weather events in Australia pushed up claims.
This is according to the interim financial results for the period ended December 31, 2025.
Normalised earnings increased by 12.6% to R2.5-billion, while the normalised return on equity improved 38.9% from 34.9% a year earlier.
Dividend declared
The board approved an interim ordinary dividend of R1.20 per share, which increased by 36.2% from the previous year. Shareholders will also receive a special interim dividend of 30c per share linked to the surplus generated from an asset monetisation strategy at the group’s treasury unit.
Solid momentum
Marthinus Visser, Group CEO, said this performance reflected solid operational momentum across businesses in South Africa, Australia and Ireland at the benefit of a geographically diversified model.
The group revealed that gross premiums in the property and casualty business increased by 17.4% to R20-billion
He said South Africa has shown resilient premium growth considering that the low premium inflation does not apply to good unit growth.
“Unfortunately, I do not think the market is growing a lot at the moment yet. It requires faster economic growth. So, I do think everyone is competing for the same cake and hopefully things settle down and we can get some economic growth to grow the size of the cake,” said Visser.
However, he noted that an increase in competition allows the consumer to have a choice of insurance.
The company’s South African insurance business OUTsurance and the Australian business Youi both recorded solid organic growth as pricing levels stabilised after the sharp increases seen in the previous years.
Claims costs pressure
Claims costs increased during the reporting period due to a sharp rise in weather-related events, particularly in Australia. The group’s overall claims ratio rose to 58.6% from 53% a year earlier.
Natural disaster claims were the main driver of the increase, accounting for 12.4% of net earned premiums compared with 6.5% in the previous comparable period. Excluding these events, the underlying claims performance improved, supported by strict pricing discipline and tighter cost control.
Visser said there were no weather concerns in South Africa as natural perils are lower compared to Australia. He said the company would issue hailstorm warnings for vehicles but nothing much can be done for homes.
“We did have a medium-sized hail in the period but that is to be expected every now and then and that is why we have insurance, so that is not concerning.
“In terms of Australia, natural perils are much more severe and a moving target. As such, it is a case of having pricing power as we are underwriting accordingly,” said Visser.
Baby steps in Ireland
The group’s newest international venture in Ireland is also gaining traction despite being in its early investment phase, the business recorded a normalised loss of R263-million, slightly wider than the R218-million loss in the same period last year. Management expects monthly losses to narrow during the second half of the financial year as the business moves closer to break-even.
Investment income was affected by a lower yield environment, but this was partly offset by a strong performance in equity markets and growth in insurance liabilities.
The group’s life insurance business delivered robust new business growth and improved expense management. However, a sharp drop in the yield curve placed pressure on the operating result for the period.
Visser said the group remained confident about its growth prospects as it continues to expand organically in key markets.
“We are pleased with the progress made towards delivering on our organic growth opportunities in South Africa, Australia and Ireland. This approach to growth is expected to continue to serve the group well in years to come and allows for a resilient and geographically diverse growth outlook.
“We remain upbeat about the group’s organic growth prospects given our low market share in key markets and strong growth momentum. We look forward to continually enhancing our leading customer proposition underpinned by delivery of competitive prices, awesome service and unparalleled customer trust,” he said.
