Infections, as well as play a role in vaccination. Discovery has done extremely well, and they've showed their thought leadership in matters medical. A call-out to OUTsurance as well. As you know, they honored the business interruption claims more than a year ago. When the industry is still in the midst of that controversy, we're very happy that we did the right thing and stuck to the spirit of insurance and paid out the business interruption claims. In house, we established a COVID fund. You see it there. ZAR 9 million has been dispersed. Management and the board contributed ZAR four and a half million to this cause, and it's been a very good distribution in terms of grocery vouchers and beneficiaries of over 1,500 of food parcels. I think the focus really has been also to work with the affected entrepreneurs that we have in AlphaCode. The second key impression for us is the robustness of the portfolio, absolutely, as well as relative to the competition. The market shares that we have across the portfolio have actually been well-protected and well-established, and in some cases, we even earned some further market share points in the respective markets. Secondly, interestingly enough, this was a real test for our distribution channels. If you look across the face-to-face channels, Metropolitan especially, and then Discovery, they really stood the test of time and did extremely well. In a digital world or a world that went a bit more remote, we're very pleased with what's been achieved in the direct channels in Australia and South Africa for OUTsurance and Youi. Obviously you would have seen that the price comparison websites in the U.K. also benefited from the remote environment that we were in. Credit to all four big organizations that are in the portfolio. It was amazing to see that within days they had restructured and re-energized their workforce to actually be remote, and productivity has not suffered in a meaningful way. Well done to the operational performance of the portfolio. MMH, they were on their journey of reset and grow, and that recovery journey was probably most impacted across the portfolio, most impacted by COVID. Well done to Hilary and his team who resumed that growth path that you would have seen in their results. We cautioned in September that we would be following a prudent approach to dividend and capital planning, and we did just that. Still now you would see that from our dividend policy and dividend planning, we are still cautious in our approach. That's really a major effect there. We would summarize as twofold. Firstly, the second wave, which was much harsher on mortality than ever expected. I think we can't rule out a third wave or continuing waves of infection and mortality. The second one is that to date, there's been quite a bit of stimulus into the economy in various forms, interest rates, government, additional grants, et cetera. We are still concerned that that stimulus may not be enough to stave off a macroeconomic problem in this country. The growth in diversity that I skipped over was just that we felt that the portfolio, in its diversification across product as well as across geography, was very good in terms of the overall performance. Turning to the financial highlights. We never like to adjust numbers. They are what they are. I think it's important when we start focusing on the operating performance of the group that you look at Discovery. They did very well on an operating line. That includes the additional COVID provision. Without that, their normalized operating profit growth would have been 22%-23%. MMH, as you know, took quite a few additional provisions. Again, the world does not work in the without scenario. Still, the underlying operating performance was very strong at MMH, especially at Metropolitan. Hastings, they looked at a 9% operating increase, and that's taking out the non-recurring transactional cost. They are eye-watering, and we can discuss those. Effectively, that's the cost of being listed in the U.K., which is one of the reasons we want to avoid that structure. As Marthinus and Jan will explain, phenomenal performance, 17% up. Great performance in Australia as they'll unpack for you. Just bear with us for one second. Thank you. We've looked at the operating performance, and over the page, we talk about the prudence that especially came through in the life operations. Discovery paid out gross claims of just over ZAR 4 billion. That's gross of reinsurance. You can see that they've now strengthened the COVID reserves to over ZAR 3 billion. That's, of course, a combination of the U.K. as well as the mortality provision in South Africa, which has been strengthened. We feel that there's still ample room in the lapse provision in South Africa. A similar number that you see there in terms of MMH. We've been working a lot with the management teams to understand this approach. In both cases, we feel that this is now a conservative and hopefully realistic way of looking at what could still come. As I said, the wave 2 was totally unexpected in its severity, and we certainly, as a country, needs to do everything we can to avoid a wave 3. Adrian spoke about a lot in his presentation. Over the page, it's important to think about the demand for product. That falls into the category of what is the new business growth that we see, as well as obviously the lapse experience. On the lapse experience, it's been positive. We explain this by thinking through people's tolerance for risk probably declining at the moment or having declined at the moment. Also experiencing the higher demand for insurance product in pandemic and difficult times. We see that continuing, we see that continuing, obviously not irrespective of economic conditions. That's where, I guess, the South African macroeconomic overlay comes in to probably guide us to a slightly more conservative view of new business and lapses. Having said that, you've done the work on MMH and Discovery, the lapses have actually been very good to date, as well as some of the new business flows. That's probably testament to the distribution strength that we spoke to right up front. New business. You see across the group, we're quite happy with the new business progression that you see. We will again speak about OUTsurance, and we'll also unpack Hastings for you a bit more. We comment on the margins on the new life business, which is promising in both cases. I think for our portfolio, which is 65% exposed to short-term business, this is probably the most important slide of the pack or the graph of the pack. That shows that OUTsurance has improved their combined ratio. Jan, there is obviously many factors going into this, including the non-motor claims in South Africa that have increased, the lack of many catastrophes in Australia that goes into this. Still, I think to us, when you compare this across the market, a 75% combined ratio in a business, which essentially is also having some economies of scale that still need to be achieved in the likes of an OUTsurance Business, this is a very good outcome. This has been a number with a gross operating margin of around 25% that has been achieved over many decades. I think this is a very good indication of the sustainability of OUTsurance' model. You see that Youi, we've made the comment around catastrophe there, Hastings have also had a big change in their combined ratio in a positive way. Let's unpack Hastings over the page. I'm not going to go into all the detail here, but I want to firstly touch on gross written premium. That, I guess, is the most difficult of all the metrics. The gross written premium is definitely at the moment the most difficult metric to keep on a positive trajectory in the U.K. You would see that in the reporting period, we grew units by 8%. Yet the total premiums only increased by 2%. It obviously shows that there is pressure on premium pricing, what we've seen over the last calendar year, the whole of 2020, is that prices have decreased more than 10% on a like-for-like basis. The reason for that, we find in probably a number of areas, but the two main ones would be that the market has been the beneficiary of a very soft claims experience, that build-up of reserves are now being reinvested by some of our competitors into market share. The second one is that there are two significant pieces of legislation coming in terms of the whiplash reform, which is destined to be implemented now in May, as well as the FCA pricing review. That there is a sense that we have that some of the competitors are doing a bit of a land grab to position their books ahead of these changes. At the end of the day, there are obviously many underwriters, I think part of the pricing deliberations are simply taking a bet on how long COVID and the lockdown will still result in the positive claims that we've seen. Hastings is following a very disciplined approach. We have not been chasing market share. It's fair to say that at the moment we are probably neutral as far as market share is concerned. We are not growing, and we're hanging on to our market share. On a more positive note, the retention rate at Hastings, we were struggling a bit 18 months ago with retention rates of low 70s. The team has worked very hard with great input from the OUTsurance team to now be on a relatively sustainable ratio of just over 80%. As you know, that is a big determinant of your overall cost ratio in terms of the lifetime value of customer as well as the new acquisition cost. On the cost side, I'll get to claims just after that. You would see on the graph that costs have increased slightly over time from the 14% four years ago up to 17%. We are actually seeing a soft decline now, and we hope to be going back into the 14%-16% range. The claims ratio is the most important element, obviously, if you look at its contribution or rather its detraction from your revenues. Last year was a particularly difficult year. I'm talking about the 2019 year. We managed to push down the claims ratio quite a bit into the mid-70s%. The two relevant comments that I need to add here. This is to be expected that the claims ratio would come down. Britain has obviously been in a series of lockdowns, and we've seen positive claims experience come through in this. The second one is that maybe you would have expected a bigger decline here. I think the simple reason here is that we now have the luxury as a private company to manage the business probably slightly more conservatively, and a lot of the claims benefit have been reinvested or have been invested in our reserves. Over time, when we disclose the full year in June, you will see more of the progression and the investment in reserves. That's simply a notion that as shareholders between us and Sampo, we want to run the business on a slightly more conservative basis and be able to take opportunities and emergencies as they come. Overall, a very, very positive performance by Hastings, and they're actually destined to do well in the coming years. Looking ahead, as I summarized there, we are managing and reflecting very deeply about the deflation environment. At some level, there's not much you can do about it. On the other level, it's all about picking the right risks and pricing them appropriately. In a market the size of the U.K. with 32 million vehicles, there's always some space for growth and investment. Just a word on the partnership with Sampo. It's going very well. We really enjoying the input and the interaction. We have formalized the integration and collaboration a bit more, and we're seeing some early signs of benefit there. Just a reminder to the market that we have an option to increase our stake in Hastings by 10%. We have the next year plus a couple of months to make up our minds around that. The important milestones, I'll quickly run through these. I think this is more the illustration of what's important to RMI and what we wanted to achieve over the last reporting period. Firstly, we spoke about the prudence and preservation, and I think we're very proud of our two life companies which were actually very conservative and accurate in terms of their provisioning. Yes, wave two was definitely more severe than anticipated, but the businesses have not needed any capital, which was a very important element of the whole planning. As you will see from our debt capacity, we've also learned a lesson there that we have to have the capacity to support our life businesses because this may not be the last emergency that this market faces. We were very happy that apart from one small fintech investment, which we supported with fresh capital, there were no capital raisings needed. This is probably a good segue into our capital structure and our cash dividend. I want to spend a bit of time on this. I know that the market may have expected a slightly bigger dividend despite us warning six months ago that it's all still about prudence and preservation. I think the overall philosophy here is that as a management team and as a board, we like the discipline of paying a cash dividend to the market. Yet we need to balance this with our capacity to reduce debt over time and make new investments when we think it's appropriate. The reason we want to reduce debt over time is that it increases your optionality. If you don't, over time, reduce your debt, there's only one way to actually repay the debt, and that's to sell an asset. It's not to say that we would not do that. It's more that we want to have the optionality to decide between the various alternatives. With the theme of prudence in mind, we wanted to give the market also a bit more of a sense as to how we think about our objectives when it comes to capital planning. Firstly, and they rank in order of priority, we want to gradually reduce debt. We want to maintain a contingency buffer. That's really a buffer that we would like to have in place for a situation where the regulator restricts our dividend flow from our subsidiaries, as was the case with the banks, and certainly also guidance to the life operators. We need a contingency buffer so that as a company with a debt burden, we are able to pay our bills for 18 months, and that's more or less ZAR 1 billion. Another part of the contingency buffer is one where we want to have some capacity available to support our portfolio companies if there is an hour of need. That we earmark as another ZAR 1 billion. It doesn't mean that we keep this in cash. It's probably not a great way of, or to keep it in cash, in fact. We want to have the contingency and the capacity to borrow into that if we needed the cash. Thirdly, as I mentioned, we want to maintain a consistent and growing cash dividend to the market. We also want to construct this plan to get within target debt capacity, which is a bit lower than our current gross debt levels. Lastly, and it is fifth in order, is we want to maintain capacity to make investments, which we come across from time to time. To give you a sense where we are now, in December 2019, we had uncommitted cash, and you can read contingency buffer of ZAR 930 million. As of December 2020, we have uncommitted cash of just under ZAR 2 billion. The contingency buffer is in place. We've started paying cash dividends again. If all things being equal, we should actually now also be able to gradually reduce our debt levels. Another milestone, of course, we have highlighted to the market that we want to increase our P&C exposure. Overall, it doesn't mean that we won't decrease our life exposure, but it may follow logically, but the unlisted P&C exposure in partnership with Sanlam was an important milestone in starting on that P&C journey. 18 months ago, when we sat with this community, there was a lot of criticism that they felt that OUTsurance and Youi had become ex-growth and that Hastings had also not been growing. Sorry, just give us a second. That Hastings had also slowed down its growth. I think it's very pleasing that it's now the third reporting period that OUTsurance and Youi have grown in a positive way, and Marthinus will speak more about that. As I said in the beginning, we also feel that all three of these companies are probably in the best shape that they've been for a long time in terms of operational robustness, reserving, plus then the growth initiatives which are coming through. The retention at Hastings was a worrying factor. We believe that especially as you become more pertinent in the market, retention has to get more attention, and we've shown the results of that. The market was starting to get concerned about OUTsurance personal lines. We're talking about a specific business here, not including OUTsurance Business in South Africa. Marthinus and Jan indicated to the market that there was a bit of upfront spending in digitization and marketing and a bit of compliance. For the first time, again, the OUTsurance personal lines cost ratio has declined or improved. Another milestone for us. The operational strength at Discovery, especially through their very nimble product reorganization or redesign and their broker distribution force, has been great. Continuing recovery at MMH, we touched on. Then lastly, we've had an exceptional financial performance in our asset management portfolio, where the maiden profit was one of ZAR 70 million for the 6 months. Fantastic performance there, and well done to Alida and her team on that. The last point that I wanted to make as far as the important points are concerned would be the new approach to valuation. Those of you who have studied our interim results would see that now that we have a much larger portfolio part being unlisted in the fact that or to the extent that Hastings has been delisted. We have decided to provide you with our assessment of value. You will find a new calculation called RMI intrinsic value, which we provide. I'm not going to go into the details. There are adequate footnotes to explain how we've arrived at these valuations. That's something that obviously will now consistently be provided to the market. With that, we can pause for questions if there are. I don't see any. Maybe we can then move to Jan and Marthinus just to Oh, sorry, I skipped one slide. What should you be expecting our attention to be on? Starting with the U.K., we spoke about premium deflation. That's priority number one, to get to grips with that, and there's not one solution. Secondly, we need to position the portfolio for the regulatory changes. Whiplash is here now, but the FCA pricing review will take some time to wash through the system and be implemented. It may be quite an important moment for the U.K. P&C business. We need to get further traction and success with the Sampo partnership. In Australia, there's a bit of a word of warning in terms of there will be further investment in regulatory and compliance costs. That's the natural effect after the Royal Commission. You'll probably see a bit of an uptick in that in the next two years. We've had a very favorable catastrophe environment over the last while. We need to obviously carefully manage that. We are coming to the end of the storm season, although it sometimes feels as if there isn't an end and a beginning of the storm season in Australia. We will also be renegotiating our reinsurance pricing for the next year. That's important moment in Australia, as far as the recent history of the bushfires and higher claims are concerned. There's a lot of focus on making sure we get the right reinsurance, not just the pricing, of course, it's also the structure. The growth in direct personal lines has been very promising. The Blue Zebra partnership has done extremely well. We are in the process of building out the CTP product. Some two little warnings in Australia which keeps us up. Also quite a few positive impetus there in Australia. In South Africa, we spoke about the impact of the third wave. Let's hope there isn't a material one. Still there is that a bit of a warning sign over the economic recovery in this country. The most important one across the portfolio must be the claims experience on mortality. Also the lapses stroke new business at MMH and Discovery, which frankly is a big function of the third wave, plus affordability generally. OUTsurance is growing very nicely. Jan and Marthinus will talk about their growth initiatives. The business actually gained a bit of market share on their, call it, principal product. At the asset management level, we are looking to implement a BEE structure for IMG. These are the highlights or at least the focus areas for the next year, which we will report back to you on when we see you again. With that, I'll hand over to Marthinus. We've got some hands up. Charles? Okay. Hi, Charles. Go ahead please. Good morning, Edmund. Thank you for the presentation. I thought I'd put my hand up because you did mention that you want to take some questions. Thank you for disclosing your assessment of the intrinsic value. At today's share price, we're looking at about a 30% discount to your intrinsic value. In the past, you have elaborated on your reasons for why you think the discount is there. What I however find strange from the presentation is that there's no focus on how this discount will be unlocked. I can also not see any of your KPIs in the previous annual reports where there's a focus for management to unlock the discount. My question today is really on, how do you respond to this? I think in the past we have discussed why it's there. What we have seen from some other companies also listed on the JSE, that there's actually quite an impetus on unlocking the value. Whether they get it right or wrong is not been clear yet. I do lack some focus from RMI's management on this particular point in this presentation and the recent results. Just some comments on that would be nice. Thanks, Charles. Yes, you're right. I don't think we focus on that as a specific item. It is on the one side, the simple response to is we run the company, we produce the intrinsic value, and you as shareholders need to decide what you're going to pay for it. That's on one level where really we have very little to do with our share price levels. On the other hand, a much more sophisticated answer I hope to say, that we feel that there are five controllables, which influences the price or the rating of investment holding company. The first one is strategy, i.e., we need to be clear on strategy and show you that we are executing well on those plans. That's the first, very clear KPI that we have as a management team. The second one is that you have to show that your portfolio management and your influence and contribution to your portfolio results in a better outcome than, say, the market. In a relative way, you need to show that you are contributing to your companies and that they are, as a result, indirectly or directly performing better than the market. That's a clear KPI for us as well. Third one would be that our capital structure needs to not be a deterrent or a negative mark on our scorecard. I think we've been quite elaborate in terms of how we think our capital structure will evolve. The fourth one is that we need to show that we are effective allocators of capital. When you see our capital decisions, capital investment or exits, you see that there are some real discipline that goes into it, and that it's done in a consistent and hopefully thoughtful way. That's a very clear KPI for management in terms of new deployment of capital as well as the returns on old capital and then the relative exits if there are any. The fifth part that's under our control is so-called friction cost. We pay a lot of attention to make sure that friction cost can be classified or include tax in the portfolio, management cost of the portfolio, and other inhibitors that does not translate the intrinsic value through to the share price. We spend quite a bit of time on things such as the unbundling legislation, the supervisory regime that the Prudential Authority wants to put or could put on us, Competition Commission. There's various parts, plus of course, just simple cost management that you would find would play an important role. If management gets those five right, then you're probably in the space of saying, there's an external overlay that you need to place on investment holding companies. The external overlay, I don't want to bore you with the same factors, but for example, unless or until the activity market improves to such an extent that you are convinced that we can sell any of our portfolio companies at or above the value of the intrinsic value, or that we can IPO it, and you know better than I do where the IPO market has been pricing new IPOs. Unless we can illustrate or the market has the belief that assets can be sold at or above, there will of course, always be a discount on this. This has, unfortunately, been the case over the last three or four years where I think the corporate activity and the regulatory overlay on top of that, and South Africa's geopolitical position, has meant that all investment holding companies have traded at a relatively big discount. Certainly, 30% is not the number that we want. We're taking a lot of potential, paying a lot of attention to the controllables, but there's definitely also a situational or environmental overlay to this. If you say, "Okay, so that all sounds fine, but show me the money." The fact of the matter is that we still see value in our structure. We still see a responsibility and a great way to build businesses as we've done in the past. When you look at what happened at RMH, there is also a point where management says, "We have addressed the five. The environment is not about to change. We may have to do something more structural." In order to do that, I guess then you're into the space of what is the liquidity that you can achieve in your portfolio. The last bit that we try and influence is to make sure that the road to liquidity in our six investments improve all the time. I don't know whether that answers your question. Thanks for that, Herman. If I can just respond to that. If we look at some of the key points, these five points. Number 2, you mentioned influence on the portfolio, previously you've also talked about investors being confused what exactly they are investing in. Some investors might have a preference for Discovery and some might. When you monitor your portfolio, certainly, given that backdrop that it's a known issue from the investment community for you. At some stage you also need to address what this portfolio must actually look like. If I, for instance, really want to be invested in OUTsurance and Hastings in a P&C sort of investment environment, then the distraction is obviously maybe I don't want to be in Discovery or Momentum, as an example. I think that's the one thing that we want to see something on, what exactly is your influence on the portfolio and what do you want the business to look like? Instead of having three different avenues, maybe a more focused avenue. I think the fourth point sort of is also important when you talk about allocation of capital. We review the valuation of Hastings over time and the debt relative to Hastings. The two values are pretty much similar, we are quite a couple of years down the line. This has resulted now in a scenario where we're actually capturing some of the dividend in RMI. You've got an asset in OUTsurance that's paying out very healthy dividends, but it's not flowing through to the underlying portfolio because Hastings didn't create the required value to offset the debt which it was acquired with. I do think there is some pushback on some of these strategic measures that you did mention from my side. I don't know if you want to comment on that. Yeah. No, absolutely. I think we were quite clear in our AGM presentation some four months ago on the strategic direction we're taking. I think we're saying we want to go into unlisted P&C and growth markets in a more meaningful way. I don't think we can be more clear that the portfolio sway will be tilted to those type of assets. If you then say, okay, what does it mean for assets that do not look like that? I think it's always a question of, we have a specific view on the potential and the value of investments, and you have to marry that concept or that deliberation with liquidity. Things are actually not always as straightforward as this is in, that's out, et cetera. We have a duty to you as our shareholders to say our vantage point typically is hopefully better. Our exits need to also reflect that deliberation that we need or that lens that we need to put onto it. I think I can't say more than we are as clear as we can on strategy. Any exits or any changes will also have to be against the right time, right value, and the right way. As for Hastings, you're right. Maybe they have been paying some very good dividends in the first number of years that we invested. I think our last IRR calculation on that investment is probably around 7% since we started. That beats the cost of capital or the cost of debt for that business handsomely. We're borrowing at 2.3% in the U.K. and our SA rate is under seven. Yes, that is not the benchmark. We don't just want to beat the cost of debt for an investment. We're very excited actually about the prospects for Hastings over the next number of years. I think, Charles, I take all your comments on board. At the end of the day, we have a long-term view of what we want to achieve, and we are as clear and as disciplined in getting there. Okay. Thank you. I'll hand over to someone else. Thanks, Charles. A hand from Roger. Hi, Roger. Hi. I think Charles really covered some of the points I wanted to make. I think well done on the OUTsurance, and I think the Hastings results were also pretty remarkable. Well done on that. It's just your investment through Discovery. Discovery's got a market cap of over ZAR 100 billion, and I'm not sure how much influence you really have in the company. It is kind of exceptionally big. Isn't it time to let it go? There's also concerns about the free cash flow of the business. It doesn't really make sense within your strategy. It's robust enough on its own to possibly unbundle that and unlock some value for shareholders. Yeah. I think you covered the argument there. We think about our influence, which we think is material. We're probably in weekly contact with a number of executives talking about things which I think is material to Discovery's future. It is a very close relationship that we have, and we feel that we are partners inside the tent. Of course, it doesn't mean that they can't do without us. I would never be that arrogant. Moreover, we see that company as a global beta. If you think of where the world is in terms of wellness, the health, the IP around Vitality, we see a lot of runway for that concept, which is much more of a concept, is a business that's been going for 20 years and have data points on millions of people in terms of that health rollout as a product or IP that can also be infused into life. I think my overall impressions, Roger, would be, we think it's a phenomenal company. We think it's a great management team with great depth. It is hard to say what is the right value where it reflects all the upside in the company. Of course, it's a company that is part of our fiber and which we built from 1992. I'm not talking from a sentimental point of view. We know the company and its potential. As such, it's not as simple as saying, "Let's unbundle this company." Your point's well made, and we wrestle with these concepts all the time about You saw the outcome at RMH with FirstRand. I think the confidence that you should have in the board and the management team is that we've not been shy to do the right thing at the right time. It may not fit your timetable. That I understand. Yeah. For 6 years, the share price is down 30%. One has to just say, how long till the strategy starts bearing out? I see a lot of value in OUTsurance. It's not being reflected at Discovery. Maybe it's time to let the child move out of the home. It doesn't mean you won't have a good relationship. I think it's bigger than, yeah, it's maybe time. Yeah. Thank you very much. Thanks, Roger. Your points are noted. Do that. We'll take some questions at the end. I just want to give Marthinus and Jan a chance to talk through their performance. Thank you, Herman. Thanks, everyone. OUTsurance had a very pleasing 6 months. You might recall that 3 years ago, our year-on-year gross written premium was sort of stuck at 0%. At the time, we said, in order to sustainably grow the bottom line, we need to grow the top line, given where our margin's at. We embarked on a journey to increase investment in acquisition, but also to sell a wider set of products through a wider set of distribution channels. The reality is, by just sticking to the call center, you're really limiting your scope in the very large South African commercial market. The same at Youi. You also limit yourself in terms of the higher end of the market. We've seen the split in the market between direct and face-to-face in many markets sort of stabilizing. To that, we also added the digital channel. On the back of that, it's now pleasing to report the 18% year-on-year gross written premium growth. You would have noted that net earned premiums lagged that a bit. Net earned premium is at 11%. There's really three reasons for that. The first one is just, in Australia, where you write annual premiums and you grow fast, you see that earned premium would lag written premium. As such, we expect that gap to get smaller over time because of the unwinding of that effect. The second reason is just the sharp increase in the cost of reinsurance we saw at the start of this financial year. That was on the back of the five catastrophes, including the bushfires we had last year. The last one is just that some of these new ventures, like we did when we launched OUTsurance and Youi. We start with quota share reinsurance arrangements, just to better learn the channel or the product. Then as we gain confidence, we wind those quota shares down. That explains that difference. If we look at operating profit, that was up 17.1%. The three main factors affecting it there was better than expected claims experience in motor. On the other hand, we had higher than expected non-motor claims in South Africa. That was mainly driven by the very wet season, as well as increase in surge claims on the back of more load shedding. Those were two key factors driving that. Another factor impacting the year-on-year performance was just, we had only one catastrophe event in the six months compared to the two catastrophe events in the prior six months at Youi. That affected the operating result. You would have seen that normalized earnings was up 23%, which is better than the operating result, and that is really only because of the recovery in the investment markets over the six months. Chiara, I think we can jump to Yeah, on the next slide there. Perfect. If we look at the premium growth there, it's probably worth it to unpack that a bit further. Youi's premium growth grew by 18% in dollar terms. That benefited a lot from the BZI relationship. BZI accounted for 7.6% of written premium in the six months under review. Even if you strip that out, you would see that the direct business also had very robust growth. That was sort of 50/50 split between units and premium inflation. Premium inflation in Australia recovered nicely. That's on the back of all these catastrophe events where the whole market has to put through some increases because of increases in the cost of reinsurance and claims cost. OUTsurance's growth slowed down a bit, the big reason for that was COVID. If we roll back a year ago, our run rate in business OUTsurance, February 2020, was 20%. We really accelerated nicely up to that point. However, we basically had six weeks of no sales after the hard lockdown, the direct side of our commercial book was severely impacted. That's really the S part of SME, your one-man shows, they were severely affected. We actually saw that book shrunk by seven percentage points year-on-year in terms of premium income. The growth in the commercial book you see is the net effect of this direct book, we shrunk, and some quite strong growth in our agent business. We certainly saw that people that's not self-employed were much more robust to the pandemic. That's why our personal lines book is more robust, but also our agent commercial book was more robust. That agent book grew strongly. It had 60% growth year-on-year. As such, we now sort of rebuilding our growth just from this new starting point. We're even seeing a small recovery in the direct book. That just gives a bit of context around that. Personal lines, our run rate was 8% premium growth last year, February. That also sort of halved. The main reason for that was really also with COVID, we invested a lot in terms of retaining units. The sort of 4% growth you see would be exclusively units, giving more discounts to clients, having smaller renewal increases, some clients downgrading cover, some clients notifying that they're working from home and as such, their risk is lower. All those things came into the system. However, compared to some of the overseas markets, the South African vehicle experience normalized quite a bit more between waves. We don't have these prolonged periods. It's more short, sharp waves, and that's why we do foresee the vehicle claims experience in a sort of a level 1 scenario normalizing very close to normal if you consider that premiums really stood still for a while. If we look at our normalized earnings, the top right slide there, you will see what is pleasing to note is that both Youi and OUTsurance reached new high water marks. What's also worth pointing out is that there's a lot of volatility in this, and that's because of the large retention on the reinsurance programs. With climate change, you get more of these events, and the number of events in a specific year plays a big role. 2017 was a very benign year, and then 2018 a bit more normal. Now this year we had one big event, so it's still better than average and that's why that contributed to the strong performance. As investors, you must understand that there will be more volatility in our results because of these retention levels. You must look through the cycle and the good thing about climate change is that it causes real growth in the property, especially the property side of short-term insurance. The proliferation of solar panels. That contributes a lot to the cost of hailstorms and things like that. That is something which will drive the short-term insurance industry's growth. Maybe looking at that cost ratio there in the right bottom, you see that we had a 0.6% increase. A big factor of that is also the fast growth of Youi and that the fact that this combined cost ratio will then have a larger weighting of the Youi cost ratio. There's, in South Africa, as Herman also mentioned, very positive. Our personal lines cost ratio came down. When we look at it long term, we think a 20% cost ratio on personal lines in South Africa is sustainable in the long run. The commercial one is obviously higher as we're still in the J curve of the agent business. We grew the agents over the last year and a bit from 350 to 500, and we expect to be through the J curve on that sort of two and a half years from now. We do validate that agency force incrementally, to make sure that they scale and achieve their targets. I think we can go for the next one. There at the top left here, you can just see that the OUTsurance growth rate came down a bit, but we do expect that to normalize as premium inflation and more normal behavior returns. The strong contribution of our face-to-face agency force should help with that. When you look at Youi, you see that very big step up there. Two things to note though is the role of the exchange rate. That provided a bit of a tailwind in the last year. The second one is with BZI. Part of the agreement was to transfer the existing in-force book, and that in-force book will be complete. The transfer cycle will be completed by end of March, and then we'll revert to the normal run rate. Those two things should be noted. That said, CTP only launched in December, that would not have been really in the six months results. That's going to give us some extra growth going forward. We also launched the BZI SME product right at the end of the six months. That contribution will also go in there. If you look at a group level through the cycle, we expect a top-line growth of around 15% to be sustainable over the next few years. Just to give you an indication, but bear in mind the exchange rate might cause some volatility in that growth from year to year. That should be noted. In terms of bottom-line growth, we expect that to slightly lag top line growth. The reason for that is just that the new channels tend to have slightly lower margins than, say, our traditional OUTsurance Personal lines channel. We're very comfortable with that, because the return on capital in those new channels is still very attractive, and as such, we're comfortable with that. When we think about long-term bottom-line growth, we're thinking sort of low teens could be achievable. Okay. I think we can go to the next slide. There we already covered the growth in the agency force, and then OUTsurance Business Direct, Herman spoke about the business interruption claims. Maybe I can hand over to Jan to just cover those last three segments there for OUTsurance. Thank you, Marthinus. We did communicate in our circular that our longstanding relationship with FNB with regards to the homeowners cover arrangement came to an end on the 1st of January as regards to new business no longer being referred to OUTsurance. That's in line with FNB's own insurance ambitions in this space. What that means for our JV is that we have agreed to run off this book in a very responsible way, which will see the in-force profit share, which is 90% towards FNB and 10% towards OUTsurance, stay intact. We have disclosed that this represents roughly 8.8% of OUTsurance Personal's in-force premium, this book, but less than 3% of operating profits if you take a through-the-cycle view of the performance of this book. Hopefully that gives some context, what we anticipate here as a management team is quite a gradual run-off and incremental adjustment to profitability, although the top-line run-off might be a bit faster given the profit share dynamics. Marthinus mentioned our strategy around the increase in our product set as well as our distribution channels. The team is quite busy at OUTsurance Life expanding on those ambitions. We launched our partnership with Shoprite in April 2020, where we're distributing funeral insurance through their store footprint across South Africa. That partnership is going well for us. That explains quite a big component of OUTsurance Life's premium growth. We've not quite yet reached our business plan targets and ambitions there, which I think paints a picture of still loads of potential for that partnership to grow further. Our new business and lapses overall in the Life business has remained quite robust considering the impact of the pandemic. We're quite satisfied with our reserving and our coverage of those reserves with regards to our actual COVID claims. We do continue to hold quite a strong reserve relative to our experience. Obviously, our claims experience in the six months is a component of explaining the lower earnings outcome for OUTsurance Life, coupled with the impact of a lower long-term yield and the impact that that's had on our policyholder liabilities. We're also quite excited to launch into the face-to-face distribution channel. That's for both OUTsurance Life and OUTvest. We have learned that the direct market for OUTsurance for life insurance products as well as for investment products is quite small and defined in the South African context. For that reason, we need to expand into both an agency as well as an IFA model to reach the right market segments to target. OUTsurance Life will come to market this year with a face-to-face product and distribution strategy, which will include IFA businesses as well as an agency force. We've also seen that the one-fee proposition, which essentially fixes your investment fee in ZAR terms for investment products, have seen good take-up from the direct book as well as from the IFA partnerships we've established to date. We're not quite there yet where that business is viable from an AUM perspective, certainly we are seeing a higher cadence. As mentioned, we do believe that the distribution on a face-to-face method here and partnerships with IFAs will be a key contributor to drive OUTvest towards viability in the future. Thank you. Thanks, Jan. I think we covered in the previous slide, I already spoke to the points on CTP and Blue Zebra. I do think we can move over to questions in the little remaining time. Good. Thanks, Marthinus. Thanks, Jan. Roger, your hand is still up, or you have another question. You're welcome to proceed, then Warrick will take a question from you after that. Okay, Warrick, I think Roger's dropped his hand. Warrick, won't you please proceed with your question? Thanks, Herman. Thanks, Jan and Marthinus for the presentation. I'll start with a few questions for OUTsurance. You can keep them brief. I know we're over time. Just in terms of the reinsurance rates in Youi having increased so much in the current period, you spoke to the fact that there will be a renewal period coming up shortly and that obviously there's some uncertainty around it, what is your expectation around potential increases in reinsurance rates? How long does it take you to pass some of those increased costs on to your customer base? I'll go one by one, if that's okay. Thanks, Warrick. Yes, I mean, last year, the catastrophe experience was significantly worse than so far this year. All other things being equal, we would expect it to go a bit smoother this year. For further context, our reinsurance cost as a percentage of gross premium used to be around 7.5%, that increased to close to 12%. However, this year the experience is much better. What also worsened things last year was the uncertainty around COVID, that affected the global capacity and appetite. Also there was uncertainty around Blue Zebra as the Blue Zebra book didn't run very well with the previous underwriter. As you might know, the arrangement when we brought it over, we took control of pricing and underwriting, that book is running significantly better now. Hopefully three of those elements which should play along to help to make the renewal season less onerous. That said, some of the January renewals in the market has seen increases. As such, that's also why we're prudent. We're not paying an interim dividend out of UB just in case we're not able to obtain the same current retention level, because should we require a higher retention, we might have to hold a bit more capital. If we remain claim free from a cat point of view for the rest of the year, I would be surprised if it's worse than last year. Normally, you tend to see improved terms. In terms of factoring that into our pricing, because of the materiality of that, we didn't factor that into our pricing in one year. You take a multi-year approach and it's like a moving target. We'll see what the next renewal is, and that'll determine how much we need to put through in the next year. Fortunately, most of the market's in a similar position, as such, that's why you're seeing premium inflation in the Australian market. It all depends on what's the experience going to be the rest of the year. The long-term trend is definitely upwards. As I alluded to earlier, in some areas of Australia, your solar panel penetration is more than 20%, severely escalating the cost of high severity hailstorms. That is what's providing real growth in the non-motor industry. Hopefully that gives you a bit of extra context around the reinsurance renewal. That's very valuable. Thank you. My next one's just on the digitization trends, we've seen this across all industries, really, people engaging more digitally. Did you find that as a large benefit to the OUTsurance model last year? How do you think the behavioral change, do you think it will be sustainable, and how is that improving your cost efficiencies? We definitely saw big changes in customer self-service, just because people were forced to adopt those because of social distancing, and that certainly helped with the OUTsurance cost ratio. The personal line's one where you see improved productivity, number of transactions per advisor, just because you have much more digital transactions. That said, I think it's important to manage the expectations around the long-term savings in terms of digitization. Just because of insurers, a very large portion of your expenses is in the acquisition space. In the acquisition area, people tend to shop around a lot digitally. Many still sort of want to go offline or want to conclude the deal. As such, your savings is more in the claim space or the admin space of existing clients. There's some great examples. Like drivable vehicle assessments. We literally switched over to handle 100% of those through WhatsApp, whereas previously, clients had to drive in to a driving center. Now they take pictures and send it to us via WhatsApp. The quality of those drivable assessments is on the same level. You're just bringing a simple triage process to take out the slightly more sophisticated ones. Those are just simple examples where the adoption have definitely jumped. We believe that's going to be a ticket to the game. An expectation from customers. You have to invest in that. It's not a case of closing all your old channels because for certain transactions, clients still want the old channel. A great example is our roadside assistance. It's been in the app for quite a while, but somehow we know people are stuck next to the road. They're not comfortable to just press a button and hope. They want to speak to a human. The take-up on that specific feature is actually quite low. Something like windscreen claims is very high because there's less of an emergency and people trust the app and it's convenient. Very interesting. Thanks. You mentioned an increase in electrical surge claims from load shedding. Load shedding is likely to be kind of a persistent issue for some time. Is that a normalized base from a load shedding claims point of view, or do you expect that to rise? How material are these losses? These losses are fairly material. One of the things we did was we benchmarked the cover because I think everyone in the industry is the same. It certainly seems as if there's some underwriting action in the industry in terms of capping the cover. Some products will make it optional, some will have additional excesses. We're currently reevaluating that cover because we sort of on the more generous side, having it sort of uncapped as standard cover with no excess, no additional excess. We're just reviewing that cover in terms of market offerings. It's certainly material within your non-motor space. For that reason, one has to sort of manage that cost. We can't see that really going down significantly in the near future. What's also a trend is just because of digital trends and equipment, people tend to have more valuable digital equipment at home that's prone to damage. As such, there's a real trend in your non-motor cover. Thanks, Marius. I'm conscious that I'm taking up everyone's time here. A very last one for you, Herman. Just in terms of how you're thinking about potential capital gains tax implications in your intrinsic value calculation. Can you give investors some comfort around your assumption set there and where you think there could be capital gains tax due to the recent tax amendments? Laurie, first of all, one has to differentiate between the position as in the latest, well, enacted in law and then some of the comments around the budget proposal in March. The budget proposal is speaking about a proportionate adjustment of capital gains tax base cost for investors who are still qualifying or, sorry, not disqualified shareholders. As the position is now. We're not sure how that will work out in practice. What is the worrying part of the law as it stands at the moment is that to the extent that you have disqualified shareholders, and on the face of it, between pension funds and offshore entities, we only have a handful of some disqualified investors. Although, just as a caveat, you need to also see that a representative or representation on your shareholder register may represent more than one beneficial owner. It's all about, which is their beneficial owner more than 5%. We are reaching out and engaging with such investors just to understand, at least highlight to them, but also understand the beneficial ownership of their representation. To the extent that let's assume there may be a disq-- on our register at the time of unbundling, which is another important point because, you could, of course, take remedial action before the actual taxable event. To the extent that there are disqualified shareholders, if there is an unbundling on that date, then the way we understand the law at the moment is that the company will have to pay the proportionate capital gains tax in cash. The cash bill does not lie with the investor or the shareholder, but with the company. Once that tax bill is paid, the company then distributes a pro rata distribution to all shareholders, which we think is grossly unfair because the, call it tax problem in the first place, belongs to one or two or whatever the number of disqualified shareholders are. We are working through structures and speaking to the JSE as well to say that at the time of an unbundling, we would not want to burden the whole investor base with a proportionate part of the disqualified tax bill, if that makes sense. We are doing a couple of things. We are proactively engaging with our shareholders to make sure that their beneficial ownership is under five, or that they understand the consequences if it's over five. We also want to make sure that if we are in that situation ever on an unbundling, that we have mechanisms to let the tax burden rest where it should, in our view, at least. Thank you very much. Roger, your hand is up, and then Errol. Thanks. Just a quick one. Just to confirm, do you expect GWP premiums to be up 15% per annum for a number of years? Is that what you said, or did I misconstrue that? That is correct. That's what we said. In dollar terms. Okay. Thank you very much. Thanks. Errol, please go ahead. In terms of giving us some guidance on future dividend flows, can you indicate what sort of target, either ZAR value or percentage, you have on debt or cash at the holding company? Yes, Errol. The guidance on the dividend line is that we started with, as you saw, the ZAR 0.225 for the half year, which we will probably, all things being equal, want to match at end of the year. That's, call it ZAR 0.45 back to where we were last year. Then, if the earnings and the dividend flow that we receive justify it or we can afford it, we would like to grow dividends by CPI henceforth. That should, at current share prices, equate to a dividend yield of around 1.5%, all things obviously staying equal. That's the one side of the equation. We spoke about the 2 billion of capacity that we want to create or have. At the moment, we have gross debt of 12 billion. The capacity or the cash on hand of roughly 2 billion. Then there are some other assets which, if you want to reconcile to Skoll's net liabilities number. That 12 number, the gross debt, we would like to see come down to around 9 billion in the relatively short term. That's all achievable on the outlook for our businesses. Thank you. Just a minute follow on that. You want to get the debt down a little bit. After that, why not pay out the full cash you receive in dividends from Discovery and Momentum and others? Why retain cash after that at the center once you hit your ZAR 9 billion target? That's a good question, and I would not want to speculate on what answer we'll get to when we are faced with that position, Errol. That would be one of the alternatives, as you say, and we understand the market's keenness to see that dividend flow from especially something like an OUTsurance flowing through. Thank you. Thank you. Serene, would you like to proceed with your question? Hi, Herman. Thanks so much for the opportunity. I just wanted to ask, you say you want to bring the debt down by about ZAR 3 billion over sort of a short space of time. At the same time, over the next 12 months, you might need about ZAR 3 billion to exercise the Hastings option. What are the funding options and how do you marry those two comments? Thanks so much. Thank you. Serene, good question. I think, first of all, one has to divide the roughly ZAR 3 billion in 2. If we do decide to take up our option, OUTsurance will pay themselves for their half of that. I don't think we will split allegiance on that. I think we will go up to 40% on a 2020 basis. Jan can chat around his own funding plans for his part of it. We do see that the way that we just explained it to you, the cash dividend, the investments that we are earmarked to do or want to do, and the target debt can all be met in the same equation. That's obviously, at the moment, a relatively Excel-based forecast. We do see that the funding decision of Hastings is one that we haven't taken, and we don't want to take that until we obviously made sure that it's an investment that we want to be made because I think Charles is watching our IRR on Hastings carefully. Yeah. We think it's all affordable within the construct that I described. Obviously, it's a dynamic situation. Roger, your hand is up. Apologies. Mistake it down. Okay. Charles? Hi. Thank you. I won't labor the point too much, but I would just like to end with a statement from my side. I think a pure play P&C insurance business listed on the JSE, consisting out of South Africa, Australia, New Zealand and U.K. exposure, will be a very attractive asset for South African investors and will probably exceed what you have as intrinsic value in your net asset value calculation. I would urge you to look at your point number 1 and 2 on your strategy for the influence on the portfolio to review that and look at how you actually unlock value for shareholders and create attractive asset on the JSE that is quite scarce. The amount of new listings on the JSE has been minuscule, and I think you'll get a very welcome reception in the right structure for this asset. I'll leave it there. Thanks, Charles. Thank you. Thanks, Charles. We don't disagree with you. That's why we are embarking in the direction that you highlight. I think the one point that the market should just appreciate, and I know you do, is that in making those decisions, we have to take into account what we think the values are at which we may be exiting and banding, selling, whatever the mechanism is. I would just also, not caution, I know you know this. We also just need to make sure that we look at our debt structure before taking these big steps because, as you would imagine, there are covenants around asset-based collateral around our gearing. Those are not insurmountable hurdles. I just wanted to sketch that it is quite a wicked problem of many influences to actually get to the right answer. Understood. I do think you can quite easily get to a more comfortable debt level even if you have to do a small capital raise. By our view, OUTsurance on its own can handle that debt level and the additional ZAR 3 billion required for the 10% in Hastings. Yeah. I think just leave it up to the shareholders whether they want to hold Momentum and Discovery. If you distribute it, those shareholders can still retain their stakes if they have a similar view on the value that you have. It's just then the shareholders' decision and not the board at RMI's. Thank you, Charles. I don't see any other hands. If there are no further comments, I'd just like to thank you for your attendance today, and we hope to have a more in-person contact with you in six months' time.