Kaikoura earthquake claims plus additional Canterbury claims have resulted in a drop in Suncorp New Zealand’s contribution to the overall Group profits, the company said in a statement today.
Suncorp New Zealand’s general insurance and life insurance businesses delivered an after tax contribution of $37 million, compared with $87 million for HY:16.
However, the Group reported net profit after tax (NPZT) of AU$537 million for the six months to 31 December 2016, with the Insurance Australia division reporting an AU$110 million increase from AU$259 million in HY:16 to AU$369 million this year.
The NZ general insurance business, which includes Vero and AA Insurance, delivered an after tax profit of $19 million, down from $68 million in HY:16.
Gross Written Premium outperformed the New Zealand general insurance market however, up 4.8% to $174 million. Motor was up 7% and Home 9%.
The company said New Zealand’s pricing response to the Kaikoura earthquake would mitigate the impact of additional reinsurance reinstatement costs.
Suncorp New Zealand CEO Paul Smeaton said the general insurance business was in a strong position despite the earthquake events, and was delivering on its strategic priorities.
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“Over the past six months we added another corporate partner, with Vero entering into a long-term distribution and underwriting partnership with Turners Limited,” Smeaton said.
“In addition to this, Vero and Capital SMART opened two state-of-the-art repair facilities, which will lower average motor claims costs, and speed up customer repairs.”
The life insurance brands, Asteron Life and AA Life recorded an after tax profit of $18 million, compared with $19 million for HY:16.
In-force premium increased 8.1%, driven by increases in new business, market-leading customer retention rates, and hybrid commission structures. Underlying profits increased by 41%, reflecting a positive claims and lapse experience of NZ$5 million.
Smeaton confirmed that the New Zealand life business was out of scope from the optimisation program and strategic alternatives being explored for Suncorp’s Australian life insurance business, which was announced at Suncorp’s half year results today.
“The New Zealand life business is strategically important to the implementation of our strategy, and it continues to deliver strong financial returns, as seen in today’s results announcement.”
Smeaton said the New Zealand life business operated as a standalone entity, with its own licence to operate, governance, manufacturing capability, people, and strong adviser network.
He said he was excited about the next six months, as Suncorp New Zealand continued to deliver on its vision to be the number one choice for New Zealanders.
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