Major Insurer in $1 Billion Disaster Hit

Suncorp Group has announced its yearly financial results, reporting its worst ever year for natural disasters which has taken a chunk out of its insurance business. The Group on the whole reported a net profit after tax of $1.13 billion, up from $730 million last year, but the general insurance business was hit by over $1 billion worth of natural disasters, well above the allowance of $595 million. The natural disasters saw the insurance practice shrink in terms of NPAT from over $1 billion to $756 million as improvements in long-tail claims management resulted in reserve releases of $427 million, the company said.

Commercial insurance at the business saw a 2.2% GWP growth, while personal insurance GWP took a 2.5% hit as outgoing CEO, Patrick Snowball, praised the insurance business for its work over a tough year. “In 2014/2015, Suncorp Group has delivered net profit after tax of $1, 133 million in what can be described as our worst ever year for natural hazards having paid out more than one billion dollars in net claims,” Snowball said in his Group CEO Report. “Once again, this result demonstrates the benefit of the Group’s diversification with all lines of business contributing to this excellent result. “The General Insurance profit of $756 million is an excellent achievement given the impact of major weather events. Most pleasingly, we have grown the customer base in a very competitive market.”

Commercial insurance and the New Zealand business “outperformed their respective markets” the company noted thanks to an expansion into the CTP market in the ACT and New Zealand’s personal insurance portfolio. The business stressed the importance of brokers to its commercial insurance lines as it reported record highs in broker satisfaction scores. “Broker satisfaction scores are at record highs due to commercial insurance’s consistency in pricing and service levels. A combination of excellent claims service and a focus on a customer-first culture are core to commercial insurance’s ability to better meet customer needs,” the company said in its analyst pack.

The company will look to continue its simplification initiatives, which delivered $225 million in cost savings in 2015, as they look to up savings to $265 million in the coming financial year. “Building on the successful Building Blocks and Simplification programs, a further $170 million of efficenct benefits will be delivered in the 2018 financial year under the Optimisation program. The Group will invest $75 million for the Optimisation program of work to deliver these efficiency benefits,” the company said of the coming year. Dr Ziggy Switkowski, chairman of the Suncorp Group, thanked Snowball for his work at the company and welcomed incoming CEO, Michael Cameron, to the company in his CEO Report.

“On behalf of the Board, I would like to thank Mr Snowball for his enormous personal contribution and exceptional leadership in transforming the Group during his six year tenure,” Switkowski said. “He will leave the business in outstanding shape as a leading financial services provider in Australia and New Zealand. “Suncorp welcomes Michael Cameron to the Group CEO position. Through his role on the Board since 2012, he has helped shape our strategy and define our priorities. “In appointing Mr Cameron, the Board believes he is the right leader for this time and will be at the helm of a company that is buzzing with energy and enthusiasm,” Switkowski continued.

This article originally appeared in
insurancebusinessonline on 4th August 2015