As at 28 November 2025

Executive Summary

Key highlights

In this report, we review the latest FY25 results for the year ended 30 June 2025.

Financial results at a glance:

• Earnings attributable to ordinary shareholders increased by 16%, rising from R4.06 billion in 2024 to R4.7 billion, and increased by 15% on a per share basis from 265.5 cents to 306.2 cents. Headline earnings per share grew 29%, from 230.4 cents to 298.3 cents. Gains were driven by strong organic growth, favourable claims experience, disciplined expense management, and higher investment income.
• Ordinary dividend per share for the full year increased by 36%, from 174.4 cents in 2024 to 237.6 cents in 2025 (interim dividend: 88.6 cents, final dividend: 149.0 cents). A special dividend of 33.1 cents per share was also declared. Dividend growth reflects robust earnings and strong cash generation through core operations.
• Cash and cash equivalents rose by 11%, from R1.69 billion to R1.87 billion, and term deposits increased 14%, from R12.63 billion to R14.35 billion. Strong underwriting performance and improved investment returns boosted liquidity.
• Gross written premiums grew 17%, from R33.2 billion to R38.78 billion. Growth reflects resilient organic expansion, strong performance in Youi and South Africa, and premium inflation, partly offset by currency effects and runoff in broker-driven books. As at 30 June 2025, the geographical contribution to gross written premiums was South Africa 34%, Australia at 65%, and Ireland at 1%.
• Operating profit increased by 33%. This was supported by organic growth, better loss ratios due to favourable weather and claims experience, along with disciplined cost management.
• The claims ratio improved from 57% to 54%, thanks to favourable natural perils and disciplined underwriting, resulting in a lower proportion of premiums spent on claims.
• International operations performed strongly: the Australian business (Youi) achieved strong growth in gross written premiums (AUD), and Ireland showed premium growth with the expansion of its customer base. This contributed to diversification and future growth prospects.

Analyst thesis

Our recommendation is based on:

• Direct model cost advantage: OUTsurance’s fully direct distribution model results in structurally lower acquisition costs, fast customer conversion, and a streamlined claims experience. This supports stronger underwriting margins relative to peers.
• Consistent underwriting discipline: Strong risk selection, telematics-based pricing, and advanced claims analytics provide stable loss ratios and predictable earnings across cycles. This underwriting focus underpins OUTsurance’s long-term return profile.
• Growing international footprint: Australia continues to scale with improving profitability, while Ireland offers early-stage, but high-potential growth as the book matures and loss ratios normalise. These markets enhance diversification and extend the growth runway.
• Valuation concerns: Multiples are elevated relative to historical ranges, suggesting limited upside and making the stock less attractive from a risk/reward perspective.