Suncorp Group reported net profit after tax (NPAT) of A$1.1bn ($692m). The result includes a one-off gain on sale of A$252m of Suncorp Bank, which was completed in July 2024. Other factors that supported the result include favourable natural hazard experience, positive investment returns and the nonrecurrence of prior year reserve strengthening, which impacted the prior period.
Cash earnings, which backs out the gain on sale of Suncorp Bank and other non-cash items, increased to A$860m. The underlying general insurance trading ratio (UITR) of 11.8% and growth in gross written premium (GWP) of 8.9% were both in line with guidance.
“Over the last six months we have continued our focus on improving how we serve customers, including expanding our claims team and supply chains. We have redoubled our efforts to address those claims that have remained unresolved from prior year events. Increases in customers’ premiums are now moderating, with home construction and car repair costs showing signs of stabilisation, margins approaching or within our target ranges and reinsurance markets remaining constructive,” said Suncorp CEO Steve Johnston.
“We have focused on investing to improve customer experiences with digital interactions now 61% across sales and service, and more than 41% for claims, increasing to around 70% during weather events. We saw an uplift in our claims net promoter score by 6 points over the half, testament to the improvements we are making in this area.”
The total cost of natural hazards was A$503m, A$277m below the company’s allowance in the half. The group benefited from a benign natural hazard period, with six weather events above A$10m in Australia in the half, and no significant weather events in New Zealand. Suncorp has a comprehensive reinsurance program in place for major events with full limits available on all covers going into the second half of the financial year.
GWP in the general insurance business increased by 8.9% reflecting both unit growth and the pricing response to claims inflation and a higher natural hazards allowance.
Net investment income contributed A$374m million to the result, supported by the continuation of high underlying yields on the interest-earning portfolio and strong equity markets.
General insurance operating expenses increased 7.4% to A$855m, largely reflecting increased project expenditure to deliver strategic initiatives and investment in growth. Insurance expense ratios declined as management continued to focus on driving operating efficiency.
Other loss after tax from continuing operations increased $13 million to $47 million, driven by higher external funding expenses and the accounting for improved minority interest profits. This was partly offset by several non-recurring items including a benefit from reserve movements relating to the application of IFRS17 in New Zealand Life.
Mr Johnston said Suncorp is now a simpler, more resilient, and focused business that consistently delivers for customers and shareholders.