Suncorp's cash profits slump, home and motor premiums rise

Natural catastrophes blamed

Suncorp's cash profits slump, home and motor premiums rise

Insurance News

By Daniel Wood

Suncorp Group has reported a cash earnings drop of nearly 30%. The finance, insurance and banking corporation with operations across Australia and New Zealand also pushed up home premiums by nearly 7.5%.

Suncorp has announced its financial results for the six months to 31 December 2021. Despite the cash earnings slump and premiums rise, the firm’s news release said the company has strong underlying business momentum.

Suncorp’s net profit after tax was also down by 20.8% to A$388 million. The profit slumps were blamed on natural disasters and investment market turmoil.

“While we have been challenged by the La Niña climate pattern and the operational impacts of COVID-19, we continue to deliver against our strategic priorities and have good momentum as we move into the second half of FY22,” said Suncorp CEO Steve Johnston.

The release announcing the results said Suncorp responded to 19 separate weather events and more than 50,000 natural hazard claims. The natural hazard claims costs from events like hailstorms blew out to A$695 million or A$205 million more than expected.

The company, whose brands include GIO and AAMI said it had offset other rising costs, like more expensive timber supplies, by cutting internal expenses and creating efficiencies like processing more claims online.

The company also said fewer motor vehicle accidents during lockdowns had helped offset some costs.

"This year will be critical for the Group as we continue to deliver on our FY23 plan and strategic initiatives. We have momentum across our three businesses and our focus is on continued execution to ensure we hit our targets,” said Johnston.

The CEO recommitted to reducing the bank’s cost to income ratio to 50% by 2023 but said it was the most “challenging” of Suncorp’s goals.

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