SUNCORP Group Limited (ASX: SUN) has withstood the conditions and posted a NPAT of $631 million for the half year, a 15 per cent increase from the prior corresponding period.
The company has declared an increased interim dividend of 38 cents per share fully-franked, up from 35 cents the same period previous, to represent a payout of 73.6 per cent of cash earnings.
SUN CEO Patrick Snowball (pictured) says the group will continue to target a return on equity of at least 10 per cent for the 2015 financial year.
However, increased competition, low interest rates and reduced reinsurance costs means the company is now expecting a top line growth "in low single digits" for the full year.
Despite the $250 million impact of the Brisbane hailstorm late last year, the group's general insurance division reported a profit after tax of $419 million, down from $470 million the year previous.
"We have received accolades for our management of Brisbane Hailstorm claims and we're reducing customer premiums by passing on efficiency benefits and lower reinsurance costs," says Snowball.
"This has led to a significant increase in retention rates and very high customer satisfaction scores."
Satisfaction across the insurance division was also boosted by reduced reinsurance rates and supply chain efficiencies passed on to customers.
Personal insurance gross written premium was reduced by 2.6 per cent, and a number of customer initiatives are reported to have improved customer retention, such as AAMI roadside assist.
In banking, SUN delivered an after profit tax of $176 million from $105 million the prior corresponding period, citing an improved net interest margin, reduced cost to income ratio and lower impairment charges.
Home lending growth of 2 per cent reflects a conservative approach and focus on the 'below 80 per cent' loan to valuation ratio market.
SUN's Life business reported a profit after tax of $86 million, up 20.9 per cent from the prior corresponding period. The result is reported to have benefitted from a reduction in long-term interest rates.
Together with today's results announcement, Snowball announced will be leaving the company by the end of 2015.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support