Australia’s insurance giant, Suncorp Group Limited has reported a lack of major natural disasters and the sale of its banking arm have helped it toward a billion dollar profit.
Suncorp Group Limited released its Net Profit After Tax (NPAT) report for the half financial year with a NPAT of $1,100 million (pcp: $582 million) up until Dec 2024.
The result includes a one-off gain on sale ($252 million) of Suncorp Bank, which completed on 31 July 2024.
Other factors that supported the result include favourable natural hazard experience, positive investment returns and the non-recurrence of prior year reserve strengthening, which impacted the prior period.
Natural hazards costs were $503 million, $277 million below their budgeted allowance, it reported.
Cash earnings, which backs out the gain on sale of Suncorp Bank and other non-cash items, increased to $860 million (pcp: $660 million). The underlying general insurance trading ratio (UITR) of 11.8 per cent and growth in gross written premium of 8.9 per cent were both in line with guidance.
The Suncorp Board has confirmed the first tranche of the return of capital associated with the Bank sale will occur on 5 March, amounting to $3.00 per share. A fully franked special dividend of 22 cents per share, associated with the sale, will be paid alongside the interim ordinary dividend of 41 cents per share on 14 March.
Suncorp CEO, Steve Johnston highlighted how the results reflected Suncorp’s discipline in executing strategic and operational priorities.
“We have delivered to our commitments, we are financially strong and resilient, and we have created future capacity to invest in initiatives to support our customers,” Johnston says.
“It is pleasing to be returning the net proceeds of the sale of the Bank to shareholders. It’s significant that we have been able to deliver the same net proceeds that we forecast when the transaction was announced almost 1,000 days ago. We also completed the sale of Asteron Life on 31 January 2025, positioning Suncorp as a simplified pure-play general insurance company.”
“Over the last six months we have continued our focus on improving how we serve customers, including expanding our claims team and supply chains. We have redoubled our efforts to address those claims that have remained unresolved from prior year events. Increases in customers’ premiums are now moderating, with home construction and car repair costs showing signs of stabilisation, margins approaching or within our target ranges and reinsurance markets remaining constructive.”
“We have focused on investing to improve customer experiences with digital interactions now 61 per cent across sales and service, and more than 41 per cent for claims, increasing to around 70 per cent during weather events. We saw an uplift in our claims Net Promoter Score by 6 points over the half, testament to the improvements we are making in this area.”
The total cost of natural hazards was $503 million, $277 million below the company’s allowance in the half. The Group benefited from a benign natural hazard period, with 6 weather events above $10 million in Australia in the half, and no significant weather events in New Zealand. Suncorp has a comprehensive reinsurance program in place for major events with full limits available on all covers going into the second half of the financial year.
Highlights of the report
- Group NPAT (incl. profit on sale of Bank) $1,100 million pcp $582 million
- Cash earnings $860 million pcp $660 million
- Natural hazards $503 million $277 million below allowance
- Net investment returns $374 million pcp $396 million
- General Insurance GWP $7.5 billion up 8.9 per cent
- Return of capital from sale of Suncorp Bank (5 March) $3.00 per share
- Special dividend from sale of Suncorp Bank (14 March) 22 cents per share
- Interim dividend (14 March) 41 cents per share