NexusShield Digital Insurance — Financial Projections

The following financial projections represent management’s base case scenario, prepared in accordance with International Financial Reporting Standards (IFRS) as applicable, including IFRS 17 (Insurance Contracts). All projections are denominated in South African Rand (ZAR) and presented in millions unless otherwise stated.

Section 13 · Business Plan

Financial Projections

Year 5 Gross Written Premium

ZAR 1,800,000,000

Scaling from ZAR 90 million in Year 1 at an 82% revenue CAGR, reaching ZAR 288 million net income and a 72% combined ratio by Year 5.

13.1 Key Assumptions

Assumption	Value	Rationale
Average Premium per Policy (Year 1)	ZAR 11,250	Weighted average across product mix
Average Premium Growth p.a.	5–8%	Inflation + portfolio uplift + upselling
Policy Growth Rate	70–213% p.a.	Aggressive Y1–Y2, moderating to 41% by Y5
Loss Ratio (Year 1 → Year 5)	72% → 48%	Improving via AI pricing and portfolio maturity
Expense Ratio (Year 1 → Year 5)	55% → 24%	Scale efficiencies and digital automation
Reinsurance Cession Rate	30–40%	Reducing as capital base and track record build
Investment Return on Float	7–8%	Conservative fixed-income portfolio
Tax Rate	27%	South African corporate income tax rate
Inflation Assumption	5%	SARB medium-term target range

13.2 Policy Growth Trajectory

Figure

Policies — visualised from the accompanying data.

Figure 13.1: Projected Active Policy Growth

13.3 Projected Profit and Loss Statement

Line Item (ZAR Millions)	Year 1	Year 2	Year 3	Year 4	Year 5
Gross Written Premiums	90	310	720	1,200	1,800
Less: Reinsurance Ceded	(36)	(112)	(230)	(360)	(504)
Net Earned Premiums	54	198	490	840	1,296
Investment Income	4	8	16	28	42
Embedded Insurance Fees	3	12	38	72	135
Data Analytics Revenue	1	5	18	42	90
Broker Commission Income	2	8	22	46	72
Total Revenue	64	231	584	1,028	1,635
Claims Incurred (Net)	(39)	(129)	(284)	(437)	(623)
Acquisition Costs	(18)	(52)	(108)	(168)	(234)
Operating Expenses	(45)	(68)	(102)	(148)	(198)
Technology & Platform Costs	(18)	(22)	(28)	(35)	(42)
Total Expenses	(120)	(271)	(522)	(788)	(1,097)
Profit / (Loss) Before Tax	(56)	(40)	62	240	538
Income Tax (27%)	0	0	(17)	(65)	(145)
Deferred Tax Asset Utilisation	0	0	0	(43)	(105)
Net Income / (Loss)	(56)	(40)	45	132	288
Net Margin	N/A	N/A	7.7%	12.8%	17.6%
Combined Ratio	127%	107%	91%	80%	72%

Figure

Pnl — visualised from the accompanying data.

Figure 13.2: Revenue vs Net Income Projection

13.4 Combined Ratio Analysis

The combined ratio is the single most important metric for evaluating the underwriting profitability of an insurance operation. A combined ratio below 100% indicates underwriting profit. NexusShield projects combined ratio improvement from 127% in Year 1 (reflecting startup losses) to 72% by Year 5, driven by AI-enhanced risk selection, portfolio maturity, scale-driven expense efficiencies, and reinsurance optimisation.

Figure

Combined Ratio — visualised from the accompanying data.

Figure 13.3: Projected Combined Ratio Improvement

13.5 Projected Balance Sheet

Line Item (ZAR Millions)	Year 1	Year 2	Year 3	Year 4	Year 5
ASSETS
Cash and Cash Equivalents	95	55	108	256	530
Investment Portfolio	30	58	98	140	160
Premium Receivables	15	52	60	42	48
Reinsurance Recoveries	12	25	32	22	25
Technology & Intangible Assets	35	28	38	35	42
Other Assets	8	7	12	15	30
Total Assets	195	225	348	510	835
LIABILITIES
Insurance Contract Liabilities	25	62	105	120	155
Trade and Other Payables	12	18	28	35	42
Reinsurance Payables	10	15	22	28	35
Provisions	5	8	18	22	30
Deferred Tax Liability	3	4	12	10	40
Total Liabilities	55	107	185	215	302
EQUITY
Share Capital	220	270	270	270	270
Accumulated Profit / (Loss)	(56)	(96)	(51)	81	369
Reserves	(24)	(56)	(56)	(56)	(106)
Total Equity	140	118	163	295	533
Total Liabilities & Equity	195	225	348	510	835

Figure

Balance — visualised from the accompanying data.

Figure 13.4: Projected Balance Sheet Growth

13.6 Projected Cash Flow Statement

Line Item (ZAR Millions)	Year 1	Year 2	Year 3	Year 4	Year 5
OPERATING ACTIVITIES
Net Income / (Loss)	(56)	(40)	45	132	288
Depreciation & Amortisation	8	12	16	18	22
Change in Insurance Liabilities	25	37	43	15	35
Change in Working Capital	(22)	(19)	(26)	3	(20)
Net Cash from Operations	(45)	(10)	78	168	325
INVESTING ACTIVITIES
Technology Platform Investment	(50)	(15)	(10)	(8)	(5)
Investment Portfolio Purchases	(30)	(28)	(40)	(42)	(20)
Capital Expenditure	(5)	(3)	(2)	(2)	(2)
Investment Portfolio Maturities	5	11	27	32	12
Net Cash from Investing	(80)	(35)	(25)	(20)	(15)
FINANCING ACTIVITIES
Equity Capital Raised	220	50	0	0	0
Dividends Paid	0	0	0	0	(50)
Net Cash from Financing	220	50	0	0	(50)
Net Change in Cash	95	5	53	148	260
Opening Cash Balance	0	95	55	108	256
Closing Cash Balance	95	55	108	256	530

Figure

Cashflow — visualised from the accompanying data.

Figure 13.5: Projected Cash Flow Summary

13.7 Key Financial Ratios

Metric	Year 1	Year 2	Year 3	Year 4	Year 5
Gross Written Premium Growth	N/A	244%	132%	67%	50%
Net Margin	N/A	N/A	7.7%	12.8%	17.6%
Loss Ratio	72%	65%	58%	52%	48%
Expense Ratio	55%	42%	33%	28%	24%
Combined Ratio	127%	107%	91%	80%	72%
Return on Equity	N/A	N/A	27.6%	44.7%	54.0%
Solvency Ratio	259%	190%	155%	246%	352%
Cash Conversion Ratio	N/A	N/A	173%	127%	113%
Customer Acquisition Cost (Blended)	ZAR 1,400	ZAR 1,050	ZAR 850	ZAR 720	ZAR 620
Lifetime Value / CAC Ratio	2.8x	3.5x	4.8x	6.2x	7.5x

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