Suncorp New Zealand announces strong half year result and continued support for customers facing financial hardship due to Covid-19
9 February 2021
Suncorp New Zealand today announced a net profit after tax (NPAT) of NZ$129 million for the six months to 31 December 2020, up 19.3% on the prior corresponding period.
Parent company Suncorp Group Limited announced an NPAT of A$490 million.
CEO Jimmy Higgins says the result reflected strong underlying performance of the business, offsetting the impact of increased natural hazard events.
Suncorp New Zealand CEO Jimmy Higgins
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 an NPAT of $100 million, 6.4% higher than the prior corresponding period.
Higgins says the AA Insurance business achieved strong growth in the personal lines, and Vero experienced unit growth across consumer lines in the broker channel, with targeted pricing initiatives driving unit growth. Claims costs were 6.0% higher, mainly attributable to increased natural hazard claims.
“Over the period we saw significant weather events including floods in Northland and Napier and the fire in Lake Ohau, which contributed to natural hazard costs that were $19 million above the prior period,” says Higgins. “We continue to assess the resilience of communities exposed to natural hazards, and we have a strong focus on the sustainability of our own business.”
Motor claims returned to more normal levels despite a short regional lockdown imposed by the New Zealand Government, but there has been a change in motor repairs caused by pressures in repairers’ supply chains.
“We’ll be keeping a close eye on this to see if it is likely to be the new normal, or whether claims costs in motor return to previous levels when global supply lines improve.”
Higgins says that the announcement from Suncorp today that Vero will no longer distribute construction or consumer insurance products via intermediated partners in Australia will not have an impact on the Vero New Zealand business.
“Vero New Zealand operates as a standalone business that is committed to growing its consumer book through its New Zealand distribution partners. The intermediated consumer insurance book is strategically important to our business and we have no plans to exit that market.”
The New Zealand life insurance business delivered profit after tax of $29 million, $15 million above the prior corresponding period. The result was driven by improved claims experience and favourable investment returns.
New business increased by $1 million on the prior corresponding period reflecting growth in submissions from independent financial advisers, and retention rates continue to be above system. In-force premium grew 3.7% on the prior period, supported by CPI and age-related premium growth.
Higgins says that in 2020, Suncorp established a new end-to-end operating model for Asteron Life, and the team has made good progress on the implementation of new systems and adviser support actions, and will continue to focus on growing new business across all of Asteron Life’s distribution channels.
Financial resilience and sustainability
Higgins says that the hardship fund established by Suncorp New Zealand last year continues to be available to customers experiencing financial vulnerability.
“Insurance plays a big part in New Zealanders’ financial resilience, and we want to help customers maintain cover through these uncertain economic times. We also continue to look for new ways to provide products and services that meet different views of value and accessibility.”
In November, Vero Insurance announced a new partnership with Good Shepherd NZ to trial an affordable car insurance product for Kiwis who might be excluded from the traditional car insurance market, as part of the company’s financial inclusion action plan.
“We are hoping that this trial will deliver some insights into how easier access to appropriate insurance might help New Zealanders to develop greater financial resilience.”
In 2020 Suncorp New Zealand was shortlisted for the Sustainable Business Network’s Climate Action Leader Award, for its commitment to renewable energy generation and reducing emissions.
“Our investment in renewable energy certification is an important step towards meeting our greenhouse gas emission reduction targets and demonstrates our commitment to supporting energy generation that aligns with our company’s values,” said Higgins.
Suncorp New Zealand is aiming for net-zero emissions by 2050, in line with the New Zealand’s Zero Carbon Act, and is a member of RE100, a partnership of businesses who share a common goal of transitioning to 100% renewable electricity.
The business also announced it had increased its sponsorship of the TupuToa programme, with seven new Māori and Pasifika interns joining the business in 2020.
Higgins says supporting TupuToa is part of Suncorp New Zealand’s commitment to creating an inclusive workplace that reflects the diversity of New Zealand’s community.
Media enquiries: Kimberley Cameron +64 27 208 1268
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