An easing of natural disasters has helped major insurer Suncorp to increased earnings and a profit across the 2023/24 year.
The Suncorp Group’s net profit after tax was $1.197 billion for the financial year with increased earnings and the total cost of natural hazard events at $1.235 billion, $125 million below expectation.
Consumer Insurance delivered profit after tax of $424 million, up from $200 million with insurance revenue driven by an increase in number of policies and premium increases.
The company’s motor insurance portfolio had premium revenue growth of 16.2 per cent, with unit growth of 1.8 per cent and an average written premium growth of 14.4 per cent.
The Suncorp Bank, which was sold to ANZ on 31 July, also contributed $379 million to the profit.
The Group incurred Bank separation costs of $151 million after tax through the year.
Suncorp CEO, Steve Johnston says while the Queensland event after Christmas had been significant, overall, it had been a less impactful year for natural disasters for the company.
“While the headline results represent strong increases on the prior year it’s important to point out that the past three years have been very challenging for all insurance companies with inflation, natural hazards and a fundamental reset in global reinsurance markets.
“It’s pleasing that we navigated these challenges, and the complexity of the bank sale, and our earnings have rebounded to roughly where they were previously.”
Climate change costs
The Group managed 12 separate weather events in Australia and one event in New Zealand, as well as events covered by the Cyclone Reinsurance Pool.
The Group’s natural hazard allowance for the current financial year is $1,560 million.
“This step-up in the frequency and severity of weather events has impacted the cost of reinsurance and the amount we set aside in our natural hazard allowance, ” Johnstone says.
“Together these input costs have increased by more than $1 billion and much of this has unfortunately flowed through to customers. On top of this has been the inflation that has been embedded in the Australian and New Zealand economies.