Suncorp Group has posted an 11.8 per cent jump in net profit after tax to $1.2 billion and a 16.6 per cent lift in cash earnings to $1.37 billion in its results for the 2024 financial year.
The firm noted that the result reflected improved underlying margins in the general insurance business and positive investment returns, with a 46.6 per cent increase in net investment returns to $661 million.
“While the headline results represent strong increases on the prior year, it’s important to point out that the past three years have been very challenging for all insurance companies,” Suncorp chief executive Steve Johnston said, citing inflation, natural hazards, and volatile global reinsurance markets.
“It’s pleasing that we navigated these challenges, and the complexity of the bank sale, and our earnings have rebounded to roughly where they were previously.”
Breaking down its results, Suncorp said that in the general insurance business, gross written premium (GWP) increased by 13.9 per cent, reflecting both unit growth and targeted price increases in response to higher costs from reinsurance, natural hazards, and claims inflation.
Consumer insurance, meanwhile, delivered profit after tax of $424 million, up from $200 million, and a 13.77 per cent increase in GWP to $7.53 billion.
Commercial and personal injury returned a profit after tax of $381 million, declining $62 million, with the prior year benefiting from the release of the business interruption provision of $124 million, according to Suncorp.
“GWP growth was achieved across all portfolios and was particularly strong across the commercial (tailored lines) portfolio which was up 14.9 per cent, especially in fleet and commercial property,” the group said.
Meanwhile, the profit after tax of Suncorp Bank, which was sold to ANZ on 31 July, decreased 19.4 per cent to $379 million, impacted by competitive pressures on net interest margins (NIM) and increased operating expenses.
Moreover, home lending saw growth of 4 per cent to $57 billion, and a NIM of 1.82 per cent (down 14 basis points).
Finally, Suncorp New Zealand delivered a profit after tax of NZ$213 million, a 152.7 per cent decrease on the previous year, with GWP growth of 17.3 per cent to NZ$2.86 billion.
Johnston said the result demonstrated momentum across the business and set a strong foundation for the insurer’s FY25–27 plan.
This follows ANZ announcing last month that it had completed its acquisition of Suncorp Bank almost two years after first announcing the $4.9 billion deal, revealing that Suncorp’s 3,000 employees and 1.2 million customers would join ANZ at the start of August.
“While the bank sale process continued through the year, our insurance portfolios have remained focused on improving our underlying business and customer experiences. As a pure play insurer, we now look forward to investing in our business and delivering greater value for our customers and communities as well as our shareholders,” Johnston said.
“We acknowledge it has been a challenging period for our customers amid ongoing inflationary pressures and the continuing impact of severe weather events, particularly in Queensland in late 2023.
“To put further downward pressure on inflation, we have expanded our motor repairer panel and invested in technology and process improvement to improve end-to-end customer experience and claims costs. In home, we are taking a variety of actions to manage large fire and water claims that have increased this year.”
The board determined to pay a fully franked final ordinary dividend of 44 cents per share, bringing total fully franked ordinary dividends for FY23–24 to 78 cents per share.
According to the group, its full-year dividend payout ratio of 72 per cent of cash earnings is around the middle of the target payout ratio range of 60 per cent to 80 per cent.
