STORMS HIT SUNCORP PROFIT

STORMS HIT SUNCORP PROFIT
TWO east coast lows in June have hit Suncorp's (ASX:SUN) $1,04 billion full-year profit, which is down from $1.113 billion the previous year an 8.5 per cent drop.

The Brisbane-based bank and insurer today said natural hazard claims for the year were $60 million above the allowance following June's storms.

The General Insurance division's NPAT is down 17 per cent, to $624 million compared with $756 million the previous year. The underlying insurance trading ratio (ITR) of 10.6 per cent is down from 14.7 per cent.

The group announced a final dividend of 38 cents per share fully franked, the same as the previous year, making the total dividend for the year $0.68, representing 80 per cent of cash earnings.

Suncorp CEO and Managing Director Michael Cameron (pictured) said the reduction in working claims costs was his highest priority and the business was continuing to implement a plan to rectify performance across both home and motor working claims.

"We have made good progress with a number of proactive measures in place to reduce the volume of open claims including the utilisation of our SMART car repair centres and clearing the more complex water and fire damage claims," says Cameron in today's statement.

The drop in insurance profit overshadowed an increase in profit from the banking and life insurance divisions.

Suncorp Bank increased its NPAT by 11% to $393 million, driven by continued home lending growth, an increased net interest margin and ongoing improvement in credit quality.

Suncorp Life's NPAT increased by 14% to $142 million with the underlying profit increasing by 9.7% to $124 million as a result of higher planned margins and favourable lapse and claims experience of $21 million.

To reduce volatility in its insurance division, Suncorp has enhanced its reinsurance program for the 2017 financial year by purchasing additional cover.

SUN is trading up 0.72 per cent at $13.31 this morning.

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

Looking for a credit or charge card that’s built for your business? Try American Express
Partner Content
A good credit card should work for you, not against you, and let you and your business ...
American Express
Advertisement

Related Stories

ACCC cracks down on greenwashing, fake online reviews

ACCC cracks down on greenwashing, fake online reviews

The nation’s consumer watchdog is cracking down on businesses...

Dye & Durham back at the table with $1.3b bid for Link’s corporate markets business

Dye & Durham back at the table with $1.3b bid for Link’s corporate markets business

After an attempt to acquire the entirety of Link Administratio...

Going green: Investible backs eight climate tech companies through $30 million fund

Going green: Investible backs eight climate tech companies through $30 million fund

A cohort of eight innovative technology companies contributing to d...

Asahi acquires Byron Bay-founded 'adult' soft drink maker StrangeLove

Asahi acquires Byron Bay-founded 'adult' soft drink maker StrangeLove

The cultural cachet of Byron Bay-founded businesses continues to lu...