Suncorp HY profits fall amid poor general insurance income
Suncorp Group, the Australian general insurance, banking and life insurance firm, has reported a fall in its profits for the six months to 31 December, 2015. It made A$530 million ($376 million), compared with A$631 million for the same time period the previous year.
For its general insurance sector, Suncorp reported a net profit after tax of A$297 million, which was down from A$419 million in the six months leading to 31 December, 2014 – a fall of 29.1 percent.
The sector did show growth however, with gross written premiums (GWP) for Suncorp’s general insurance sector increasing by 1.4 percent to A$4.42 billion in the second half of last year, compared with A$4.36 billion in the same time period in 2014.
Personal insurance GWP returned to growth, increasing by 0.6 percent as a result of increases in average premiums offset by the exit of some corporate partner relationships.
Customer retention remained strong, demonstrating the strength of the Group’s brands and stabilisation in the personal insurance market.
Commercial Insurance GWP grew by 2.2 percent with a strong growth across the compulsory third party (CTP) portfolio, partially offset by a negative impact from the Western Australian Workers Compensation portfolio.
Michael Cameron, Suncorp group chief executive officer (CEO), said the working claims performance, as reported in the General Insurance update on 14 December 2015, was obviously disappointing, saying personal insurance claims result had been affected by both environmental and operational factors.
”My number one priority has been resolving these issues. We have moved quickly with an intervention strategy designed to restore performance,” he said.
“Our target is to deliver lower working claims costs, which together with other initiatives, will drive a higher underlying ITR for the full year.”
Suncorp also reported a 38.4 percent fall in its life profits between the two time periods, however posted a 10.2 percent increase in its bank profits to A$194 million in the second half of last year, compared with A$176 million in the second half of 2014.
Cameron said the end of his first 100 days in the CEO role signalled the completion of the transition phase and he was pleased it had confirmed strong foundations and growth opportunities.
“My key objective is to maintain the stability of the organisation and to keep the momentum to deliver our commitments made to investors, customers and employees,” he said.
“We recognise the global uncertainty created by financial markets, climate change and other factors such as cyber security.
“Refinements are being made to our strategy to invigorate growth and drive more resilience to volatility. Increasing our resilience will be achieved by two streams of activity, elevating the role of the customer and recalibrating our costs.”
