Suncorp New Zealand announces full year result, including up to $30m of COVID-19 customer support options

21 August 2020

Suncorp New Zealand today announced a net profit after tax (NPAT) of NZ$259 million for the full year to 30 June 2020. The result was driven by underlying premium growth, offset by higher natural hazard claims following periods of benign weather conditions, COVID-19 customer support, customer remediation provisions and increased life insurance claims. 

Parent company Suncorp Group Limited announced a NPAT of A$913 million.

Suncorp New Zealand Acting CEO Jimmy Higgins said the result reflects a strong performance across the entire business.

Suncorp New Zealand Acting CEO Jimmy Higgins

General insurance

The New Zealand general insurance business, which includes Vero Insurance and AA Insurance (a joint venture between Vero and the New Zealand Automobile Association) delivered profit after tax of $219 million, up 0.9% on the previous corresponding period. This was driven by disciplined portfolio management, earned premium growth including solid unit growth, and favourable claims experience and was partially offset by increased natural hazard costs and customer remediation provisions. 

Natural hazard costs were up $25 million on the prior financial period, when the country experienced relatively benign weather conditions. A significant hailstorm in Timaru in November contributed $20 million to the net natural hazard cost incurred for the year.

During FY20, a total of $18 million in customer remediation provisions was recognised against General Insurance premium income, largely relating to issues with customer discounts in prior periods. 

Life insurance

The New Zealand life insurance business delivered profit after tax of $40m, down $4m on the previous corresponding period. The lower result was driven by adverse claims experience, lower investment returns, customer remediation provisions, and project costs relating to implementing the new IFRS17 accounting standard. This was partially offset by the impact from ongoing low rates of cancellations. 

In-force premium grew by 3.7%, supported by CPI and age-indexed premium growth.

COVID-19 impact

Suncorp New Zealand has announced up to $30 million worth of customer support options in response to COVID-19 related impacts, ranging from premium waivers and discounts for customers experiencing financial hardship, through to premium rebates.

Included in this amount, AA Insurance is returning $19.5 million in rebates to customers in recognition of the significantly lower risk environment during the most restrictive period of lockdown. AA Insurance has also created a $2 million fund for customers in genuine financial hardship.

Intermediated general insurer Vero has announced up to $10 million in hardship funds for both business customers and individuals, primarily through premium waivers and assistance, to help customers experiencing financial hardship due to COVID-19 to keep key insurances in place. The support provided to Vero customers has averaged more than $400 for individuals and $2,500 for business customers. 

Asteron Life is providing premium waivers to customers, both through in-built policy benefits and as COVID-19 specific support for customers who do not have a benefit available. Asteron Life had provided more than $3 million in premium waivers that do not need to be repaid.

During the lockdown Suncorp surveyed  New Zealanders and found that 60% preferred company savings to be passed back to those most in need, while 21% wanted to receive refunds themselves. 

Mr Higgins says, “In situations where customers have an intermediary to support them, it’s possible to offer more tailored options to help ensure those who are most affected keep their insurance cover in place and don’t expose themselves to unnecessary risk.”

Suncorp New Zealand also donated $100,000 to domestic violence prevention charity Shine during the lockdown to help keep children in temporary housing connected with their schools through the provision of digital devices and internet services.

Corporate responsibility

Mr Higgins says Suncorp was proud to win the ANZIIF Excellence in Diversity and Inclusion Award in FY20.

“For us corporate responsibility is about taking a sustainable, long-term approach to running our business, and we have done a lot of work over the past 12 months on some of our key principles including diversity and social and environmental impact.”

“In FY20 we invested $6 million in Housing New Zealand’s Sustainability Financing bonds to fund new or upgraded sustainable social housing and joined RE100, a partnership of more than 240 global businesses that share a common goal of transitioning to 100% renewable energy.”

“We also made a significant investment in training our people to identify and support customers experiencing vulnerability. Almost all Suncorp New Zealand staff completed a tailored training programme focusing on this critical skill, something that proved invaluable when the pressures of COVID-19 began to be felt.”

“These are all tangible steps we are taking to build a more resilient community and protect what matters to New Zealanders.”

 

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Media enquiries: Lisa Meiklejohn +64 27 404 4355

The information in this article has been compiled from various sources and is intended to be factual information only. It is not personal advice and any description of an insurance product or service is not a complete description of all the terms and conditions applicable to the particular insurance product or service. You should consult a qualified adviser for advice on whether the information in this article is suitable for your personal situation and needs. While we take reasonable steps to ensure that the information contained in this article is accurate and up-to-date, it is subject to change without notice. Suncorp New Zealand and its related companies does/do not accept any responsibility or liability in connection with your use of or reliance on this article.