OUTsurance says war may bruise growth, but risk engine built for turbulence

OUTsurance has delivered a sturdy set of interim results, showing that even in an industry where the weather can fling expensive surprises through the roof, disciplined underwriting and tight cost control still count for plenty.

For the six months to 31 December 2025, Outsurance Holdings reported a satisfactory financial performance and a strong operational showing, despite a sharp rise in retained natural perils claims linked to more storm events in Australia. The group said the result was supported by good organic premium growth, cost efficiency and an excellent claims performance from OUTsurance South Africa.

The headline numbers were solid enough to keep shareholders smiling. OUTsurance Group’s normalised earnings rose 7.7% to R2.324-billion, while normalised return on equity improved to 32.3% from 30.8%.

The interim ordinary dividend jumped 36.2% to 120.7 cents a share, with an interim special dividend of 30.3c. Outsurance Holdings also remains comfortably capitalised, with a solvency multiple of 2.0 times against a target of 1.5 times.

However, it wasn’t all sunshine. Outsurance Holdings’ claims ratio increased to 58.6% from 53.0%, largely because retained natural perils claims surged to 12.4% of net earned premium, almost double the 6.5% recorded in the comparative period. That was especially so in Australia, where climate volatility is becoming a bigger underwriting headache.

On a media call, CEO Marthinus Visser pushed back against any suggestion that the group was losing its grip on the risk. He said six-month periods can distort the natural perils picture because the timing of storms matters enormously. A storm in November rather than January can make one interim period look ugly and another oddly clean. Over a full year, he argued, the pattern is more stable.

Visser said OUTsurance remains confident that its pricing, reinsurance and underwriting discipline are keeping pace, and that the group has no concerns about its ability to price and manage that risk.

He added that climate change and urbanisation are making these events more frequent and more severe, while also arguing that mitigation measures such as levies, better flood run-off systems and stronger building regulations are needed to preserve affordability.

The more intriguing part of the call came when Visser was asked about the Iranian war and its possible economic effects. His answer sounded exactly like what one might expect from the chief executive of an insurer, incorporating a scenario analysis.

The likely negative consequences of war, he said, are higher inflation and slower economic growth. Neither is welcome, but neither would be fatal to OUTsurance’s model.

On inflation, Visser said the group has pricing power and cost control, and has shown through previous cycles that it can pass through rising costs while containing them as far as possible. On slower growth, he acknowledged that weaker vehicle sales are not ideal for an insurer that would prefer more cars being bought and insured.

But there is a twist. Tough times also tend to send consumers shopping around for cover, which creates an opening for a challenger brand with competitive pricing and a growing footprint. “It’s not great for the world, it’s not great for the country, but I think we’ll be able to navigate it,” he said.

That calm, actuarial view of geopolitical chaos fits neatly with the group’s broader strategy. OUTsurance is still betting on simple organic growth across South Africa, Australia and Ireland. Ireland remains loss-making, with normalised losses widening to R263-million from R218-million, but management says it remains on track for monthly break-even by April 2029, five years after launch. DM