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Youi reports $17 million Sydney hailstorm hit

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South African-owned insurer Youi took a $17 million hit from hailstorms in Sydney and Queensland in the December half, but still made an overall profit.

Parent company Outsurance Holdings says that on a year-on-year basis the Australian business suffered a 9.8% fall in operating profit to $46 million and normalised earnings dropped 11.1% to $32 million.

Youi has been in the news recently after being heavily criticised by the Hayne royal commission for its claims handling performance. The insurer later accused the commission of seeking to portray it in the “worst possible light”.

Gross written premium grew 2.9% to $351 million but net earned premium was flat at $310 million.

The claims ratio worsened to 56.2% from 55.4% and the combined ratio to 86.9% from 84.9%.

The cost-to-income ratio increased 1.2 percentage points to 30.7% from large investments in support infrastructure, call centre capacity and marketing capacity to drive new business activity.

Regulatory compliance expenses also contributed to the jump in cost-to-income expenses.

The New Zealand business returned to the black with a $500,000 operating profit, following a $1 million loss in the year earlier period.

Gross written premium fell 8.3% to $11 million but net earned premium remained at $3 million.

The claims ratio improved to 46.6% from 53.7%.