Fewer car accidents as SA drivers change their habits, says OUTsurance


OUTsurance says its car accident claims are falling in South Africa as people are cutting down on driving given the depressed economy, as well as due to improved vehicle safety technology and ride-sharing apps (like Uber). 

Lower claims meant lower premium hikes, which have remained well below inflation in recent years. This has contributed to a decline in OUTsurance’s normalised profit in the past year. Including its shareholding in the UK insurer Hastings, it fell by 13% to R2.5 billion in the year to end-June. (Without Hastings, profit was down 9%.)

“Changes in vehicle technology and driving behaviour illustrate the importance of diversifying the insurance portfolio to achieve larger shares of the commercial and life insurance markets, as well as enter other non-motor classes of insurance,” Rand Merchant Investment said in its financial statement for the year to end-June. RMI owns almost 90% of OUTsurance.

Accordingly, the insurer is investing heavily in its business-focused insurance unit, OUTsurance Business. Its team of agents have doubled over the past year.

“Although early results are encouraging, the creation of a tied-agency force is capital intensive and a multi-year investment. This investment is likely to peak in 2020 and 2021.” Over the past year, its new business premiums increased by 27%.

Over the past year, OUTsurance has also entered the funeral insurance market, which is the largest life insurance market segment in South Africa.

Insurance claims rose, in part, due to more weather-related claims, particularly at its Australian venture Youi. Profit at its UK insurer Hastings fell by 35% due, in part, to difficult trading conditions in the UK motor insurance market.

OUTsurance’s results were released as part of Rand Merchant Investment’s financial statement for the year to end-June. RMI owns almost 90% of the insurer, and also has stakes in Discovery (25%) and Momentum Metropolitan (27%).

RMI, which also has stakes in Discovery (25%) and Momentum Metropolitan (27%), saw its headline profit fell by 7% to R3.8 billion.

Last week, Discovery posted a 7% fall in normalised headline earnings, while Momentum Metropolitan hiked its diluted normalised headline earnings by 53% to R3.1 billion for the year ended 30 June 2019

Compiled by Helena Wasserman

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
Facebook is facing a fresh crisis after a former employee turned whistle-blower leaked internal company research . Do you still use Facebook?
Please select an option Oops! Something went wrong, please try again later.
Yes, the benefits outweigh the risk for me
25% - 235 votes
No, I have deleted it
46% - 432 votes
Yes, but I am considering deleting it
29% - 272 votes