Suncorp NZ reported a small increase in half-year profit, as premium income rose by 20%, but the group warned of likely increases to reinsurance costs.
The NZ division of the Australian giant recorded a profit of $94 million for the six months ended December, up 3% from last year, while premium income was $1.4 bn.
Most of the company’s profit came from the general insurance business, including the AA and Vero Insurance brands. Profit was up 7% to $80m.
Life insurance brand Asteron had a more than 12% drop in profit to $14m.
Suncorp said the general insurance business benefited from fewer natural disaster claims and higher investment income, but this was partially offset by reinsurance and commission costs.
New Zealand chief executive Jimmy Higgins said Suncorp was monitoring global reinsurance markets to see if there might be capacity constraints and price rises similar to 2023.
He stated that floods in North Queensland and a major earthquake in Japan could affect reinsurance costs.
Higgins stated that New Zealand was a part of the group’s Australian reinsurance purchase and thus was impacted by Australian and global catastrophes.
"We need to see how reinsurers respond to recent events outside of New Zealand, to see if their risk appetite and pricing for New Zealand natural hazards has changed, particularly off the back of the major NZ weather events in 2023," he said.
"This guidance, coupled with local supply chain inflationary pressures, should provide an early signal on
the impact to premiums in 2024. I am hopeful we won't see the level of premium increases our customers experienced in 2023."
