Suncorp New Zealand reports strong full year result
9 August 2018
Suncorp Group Limited today announced net profit after tax (NPAT) of A$1,059 million for the 12 months to 30 June 2018 (FY17: $1,075 million).
The New Zealand business achieved NPAT of NZ$148 million, an improvement of 70 per cent on the previous year.
Suncorp New Zealand CEO Paul Smeaton said the result reflected strong business performance in the face of increased weather events and natural hazard volatility.
“Strong growth, claims management and expense control have all contributed to a more positive result compared to the prior year, which was significantly impacted by the Kaikoura earthquake.
“This is a pleasing result that reflects our focus on building a more resilient business and meeting the needs of our customers and business partners,” said Mr Smeaton.
Strong performance for general insurance despite increased weather events and motor claims costs
The general insurance business, which includes Vero Insurance and AA Insurance (a joint venture with the New Zealand Automobile Association), delivered profit after tax of $109 million.
Gross written premium (GWP) grew 10.2% on the prior year after adjusting for the sale of the Autosure motor warranty book in March, supported by unit growth across direct and corporate partner channels.
Mr Smeaton said that Suncorp continues to manage motor claims cost inflation via product changes, pricing remediation and claims process efficiency initiatives such as SMART vehicle repair centres.
Net incurred claims costs increased 0.5%, driven by a high number of substantial weather events but offset by improvements in working claims.
Life insurance business profit remains steady
The life insurance business, which includes Asteron Life and AA Life (a joint venture with the New Zealand Automobile Association) delivered NPAT of $39 million, down $1 million on the prior year due to lapse and claim volatility. In-force premium grew by 4.9%.
Mr Smeaton said the business expects in-force premium and underlying profit to continue to grow.
“In 2017 we introduced AsteronConnect to provide our life insurance advisers with a digital platform to make it easier for them to on-board new business,” said Mr Smeaton. “We also continue to lead the market on retention rates and sustainable business practices that deliver better outcomes for our customers.”
Mr Smeaton confirmed that Asteron Life New Zealand remains core to the Suncorp New Zealand strategy moving forward, and is not included in the sale of Suncorp’s Australian life business.
Continued progress on claims for Canterbury and Kaikoura
Suncorp New Zealand paid out a further $183 million in Canterbury earthquake claims in the year, and has now settled 97% of expected claims costs. Expected exposure in Canterbury increased $10 million, largely due to higher than expected development in overcap claims.
Mr Smeaton said that Suncorp has also settled 96% of domestic property claims from the Kaikoura earthquake.
The outlook for 2019
Mr Smeaton said that he expects the business to continue to grow as it delivers a range of initiatives against its three strategic priorities, Elevate The Customer, Inspire our People and Drive Momentum and Growth.