Youi is expected to deliver strong premium growth and achieve economies of scale this year after more than doubling earnings in the six months to December 31, according to South African parent Rand Merchant Insurance.

However, an expected pre-tax loss of $7 million after reinsurance recoveries from Cyclone Marcia will hit earnings in the second half.

The company’s earnings grew to 66 million rand ($7.06 million) from 25 million rand ($2.67 million) in the corresponding period of 2013.

“Youi continued to gain market share on the back of successful marketing initiatives, excellent service and a value-for-money product offering,” Rand says.

It earned 2.8 billion rand ($300 million) of gross premium revenue, making the company one of the group’s main growth drivers.

Youi’s claims ratio deteriorated to 61% from 59.2% due to weather losses.

November’s Brisbane hailstorm cost a net 68 million rand ($7 million), compared with catastrophe losses of 90 million rand ($9.62 million) in the previous year.

Youi was launched in New Zealand last August, and Rand says performance so far is in line with expectations. Youi New Zealand is expected to break even over the next five years and start making a meaningful contribution to group earnings after that.