Nimbus Direct Insurance — Executive Summary

Nimbus Direct Insurance seeks ZAR 850 million to build a direct, digital-first short-term insurer for South Africa and Botswana — targeting a Year 5 GWP of ZAR 4.5 billion across 1.4 million policyholders, a combined ratio below 80% and a base-case 5-year equity IRR of 21.8% with a 5.2× base-case MOIC.

Section 1 · Business Plan

Executive Summary

1.1 The Opportunity

Nimbus Direct Insurance Group (Pty) Ltd (“Nimbus” or the “Company”)
will be incorporated as a next-generation direct insurer focused on the
structurally profitable and mature short-term insurance market of South
Africa, with planned expansion into Botswana as a high-margin,
underpenetrated adjacency. South Africa is the most developed insurance
economy on the African continent, with insurance penetration of 11.54%
of GDP — well above the global average of approximately 6.8% — and gross
written premium (GWP) across the combined life and non-life segments of
approximately ZAR 768 billion in 2023 according to Prudential Authority
data. The non-life sector alone generated ZAR 153.5 billion in GWP in
2023 and is projected to grow at a CAGR in excess of 4% over the
2024–2028 period.

Despite the maturity of the South African market, customer
satisfaction with incumbent insurers remains structurally low, broker
commissions continue to weigh on premium affordability, and the direct
insurance channel — pioneered by OUTsurance in 1998 and extended by
MiWay, Auto & General and others — accounts for less than 35% of
personal lines premiums. Nimbus will compete for share within this
channel by combining (i) data-driven underwriting and behavioural
pricing, (ii) a customer reward and retention mechanism (the “Nimbus
Reserve”), (iii) cloud-native cost economics, and (iv) a credible
cross-border expansion path.

1.2 Strategic Positioning

Nimbus differentiates itself from the existing direct insurers
through three reinforcing positions:

Aggressive risk-based pricing — proprietary
algorithms incorporating telematics, geospatial, credit-bureau and
behavioural data to deliver tighter price tiers than
incumbents.
Customer-aligned economics — the Nimbus Reserve
credits a portion of premium back to claim-free policyholders,
replicating the proven OUTbonus mechanism while modernising it with an
in-app digital wallet and partner redemption network.
Cross-border scalability — a single technology
platform engineered from inception to operate across multiple SADC
jurisdictions, beginning with Botswana in Year 3 where insurance
penetration is only 3.5% of GDP.

1.3 Financial Highlights

The Company is targeting a steady-state combined ratio below 80% by
Year 5 (loss ratio 57%; expense ratio 22%), a Year 5 GWP of ZAR 4.5
billion across 1.4 million policyholders, and net profit margins
expanding from a planned investment loss in Year 1 to approximately 20%
by Year 5. The plan is calibrated against published Santam and MiWay
2024–2025 financial results, where MiWay reported 14% GWP growth and a
10.9% underwriting margin in H1 2025, and Santam reported an
underwriting margin of 11.3% and a return on capital of 33.2% in the
same period.

Figure 1.1

Figure 1.1 — Projected customer base and gross written premium growth, Years 1–5.

1.4 Funding Requirement

Nimbus is seeking a total capital raise of ZAR 850 million
(approximately USD 47 million at the November 2025 reference rate) in a
combination of equity and convertible instruments to fund: (i)
regulatory and solvency capital under the Prudential Authority’s
Solvency Assessment and Management (SAM) regime; (ii) customer
acquisition and brand investment; (iii) the build of the core technology
platform; (iv) operations and infrastructure; and (v) working capital
and contingency reserves. The Company is targeting an investor IRR of
25–30% over the five-year plan horizon, with multiple liquidity pathways
including strategic acquisition, regional consolidation, and listing on
the Johannesburg Stock Exchange (JSE) main board.

1.5 Investment Thesis at a Glance

Why Nimbus, Why Now

1. South Africa offers the deepest, most-profitable insurance market
in Africa — with insurance penetration of 11.54% of GDP and proven
willingness among consumers to pay for short-term cover. 2. The direct channel is taking share at the expense of broker-led
incumbents (projected to grow from 34% to 48% of non-life personal lines
by 2030), but is still concentrated among a handful of operators with
ageing technology stacks. 3. Botswana provides a natural second leg with a stable currency peg,
a Standard & Poor’s sovereign rating one notch above South Africa,
GDP per capita of approximately USD 7,800, and an insurance penetration
rate of only 3.5% — a structural growth opportunity. 4. Modern insurtech architecture is now mature and battle-tested.
Nimbus avoids the legacy-core constraints that hold back larger
incumbents and can deliver a 3–5 percentage point structural
expense-ratio advantage at scale. 5. Reinsurance capacity is available and competitively priced from
global Tier 1 reinsurers (Munich Re, Swiss Re, Hannover Re, Africa Re),
enabling Nimbus to scale GWP without disproportionate capital
strain.

1.6 Use of Proceeds — Summary

Figure 1.2

Figure 1.2 — Allocation of the ZAR 850 million capital raise.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Nimbus Direct Insurance Group (Pty) Ltd.