Insurance company CEO: ‘Still gas in the tank’

Insurance company CEO: ‘Still gas in the tank’ | Insurance Business

Insurance company CEO: ‘Still gas in the tank’
Suncorp Group CEO Patrick Snowball says there “is still enough gas in the tank to ensure” the group continues to grow its top line, improve margins and keep its cost base flat.

Snowball outlined ambitious growth targets for 2015 at the annual general meeting (AGM) last week including achieving a growth of 4% to 6%, a dividend pay-out ratio of 60% to 80%, and a meet or beat underlying insurance trading result (ITR) of 12%.

"The improving Suncorp story doesn’t end in 2015. There is still enough gas in the tank to ensure this Group will continue to grow its top line, improve margins and keep its cost base flat."

Snowball said thanks to the group’s 2014 achievements, it is in “a great position to deliver on our commitments for 2015”.

“I realise that these targets are a challenge but we need to continue to stretch our team in order to drive the business as we have done so successfully and consistently over the last five years.”

Snowball admitted that the “most challenging financial target” will be achieving top line growth of between 4% and 6%.

“This is an aggregated target for the five businesses,” he explained. “It reflects the transition that we are undertaking from price-led growth to efficiency-led growth.”

Snowball said he is confident that the three general insurance businesses will be “well ahead” of its 12% underlying ITR target.

He added: “Strong returns from general insurance, combined with improved results from the bank and life businesses, will deliver a very healthy ordinary dividend based on the 60% to 80% pay-out ratio.

“In addition, we have an extremely strong balance sheet and, with $831m of shareholder’s equity above our capital operating targets at 30 June, it’s absolutely reasonable for our shareholders to expect further capital returns.”

He added that Suncorp is on track for at least a 10% ROE this year.

“I know that is significantly above analyst forecasts but we are unwavering in our commitment to meeting this target.”