Suncorp outlines plans for future growth despite hefty natural disaster costs | Insurance Business New Zealand
Suncorp New Zealand recently reported 19.3% growth in net profit despite a series of costly natural hazard events, and CEO Jimmy Higgins says the insurer will be increasing its focus on preparedness, and on the “broader picture” of climate change over the coming year.
Higgins noted that New Zealand’s natural event costs were $19 million above the prior period in its half-year results, and claims costs had risen by 6% - something that has driven Suncorp’s focus on sustainability, and on the resilience of the communities most likely to be affected.
“When we look at natural hazards, we set ourselves an allowance each year,” Higgins commented.
Read more: Suncorp reveals results and pandemic hit
“We know that the March to May period typically experiences more bad weather, so we have more of that allowance dedicated to the second half - and we used quite a bit of that in our reported period. The frequency of natural hazards is increasing, as is the severity, so we have to think about that not just in the context of insurance and risk pricing, but also what it means more broadly in terms of how we think about climate change.”
“We do have internal policies around responsible investment, banking and insurance,” he added.
“We’re looking to support those businesses that also have plans to be carbon-neutral by 2050. That’s our programme on a group level, and New Zealand is part of that.”
Higgins said that despite the increased claims costs, all of Suncorp’s New Zealand businesses nonetheless experienced solid growth - something he attributes to a strong broker channel, as well as an increase in direct business.
“We’ve been focused on good pricing, good underwriting and on growing our book for a number of years now through all of our channels,” Higgins said.
Read more: Suncorp New Zealand announces new CEO
“AA Insurance has had a good growth story, as has the Vero intermediated book, which includes Asteron Life.
“All sections of the business have been performing in terms of growth, and the result includes some of the major natural hazards that we’ve dealt with over the past two years - the floods in Napier, and the Lake Ohau fire. So even being over allowance in natural hazards, we still produced a better result on the prior year.”