Youi Group is confident its Australian business will continue to grow after it produced a strong set of results amid tough conditions.

The Australian arm of the South African-owned company increased its earnings to $67 million in the year to June 30 from $47 million the previous year.

The claims ratio improved to 55.5% from 58.9%, and the combined operating ratio strengthened to 85.9% from 89.8%.

The strong results partially offset a weaker showing from Youi’s New Zealand business, which remains in the red, although losses narrowed by 40% to $6 million.

“Youi experienced highly favourable profitability metrics for the year under review,” parent company Outsurance Holdings said of the Australian market.

It says the plan to start offering compulsory third party (CTP) products this year will further cement Youi’s position in the market.

“This entry will result in a more holistic motor insurance product offering, which will enhance our product and service proposition,” Outsurance said. “An incremental expansion into the commercial insurance market also presents Youi with a wider footprint to drive future growth and leverage the commercial underwriting capabilities of the group.”

Youi Group, including Australia and New Zealand, grew operating profit by 53.7% to 907 million rand ($84.93 million). Australasia accounts for 47% of the group’s gross written premium of 14.9 billion rand ($1.4 billion).