Suncorp insists business remains resilient despite major profit slump

Suncorp insists business remains resilient despite major profit slump | Insurance Business Australia

Suncorp insists business remains resilient despite major profit slump

Suncorp has announced that its underlying business remains resilient despite a 44.7% drop in its net profit after tax (NPAT) for the six months ending December 31.

The Brisbane-based insurance giant delivered NPAT of $250 million, down 44.7% from $452 million in the same period last year; while its cash earnings dropped 12.5% to $413 million, compared to $472 million in 1H18.

The board declared an interim dividend of 26 cents per share, fully franked.

“While the interim result includes natural hazard costs significantly above our allowance, as well as the impact of volatile investment markets, our underlying business remains resilient,” said Michael Cameron, Suncorp CEO and managing director.

“We’ve achieved solid top-line growth, operating expenses are well controlled and the Business Improvement Program has again exceeded targets. The core of our insurance portfolios are performing well and in banking, strong deposit growth and very low losses helped to counter the slowdown in lending across the industry.”

Cameron said despite the expected impact of natural hazards, investment performance, and unforeseen regulatory costs on its full-year ROE, the business remains “well-placed on an underlying basis to perform in-line with our original expectations.”

The insurance boss said the royal commission had been an important process for the industry and acknowledged that Suncorp “has, at times, fallen short of community expectations”.

“The work we’ve done on our business model and strategy, will allow us to navigate the changes ahead,” Cameron said. “I believe we have the right foundations for sustainable growth.”