Suncorp New Zealand saw post-tax profit fall by 23% in the 12 months to June amid higher natural hazard costs and lower investment returns.
The NZ insurance group made $165 million over the year, as Australian parent Suncorp announced a net post-tax profit of A$681 million, down 34%.
Chief executive Jimmy Higgins said the business had experienced top-line growth and decent underlying performance in a disrupted year.
“This disruption came from the impacts of Covid-19, including the war on talent in a tight employment market, the restrictive environment our people have had to work in, and employees being off sick with Covid.”
“Multiple weather events experienced during the year resulted in the highest volume of claims since 2018; and customers experienced longer waiting times for repairs to their homes and vehicles because of the delay in getting materials.”
“This year, we’ve experienced a highly volatile investment market – the most volatile we’ve seen in a long, long time. Despite this, the underlying business has performed well, and we’ll continue to be a strong, well-capitalised company that can support customers in their time of need.”
Higgins said Suncorp New Zealand’s strategy was focused on making things easier and faster for its customer.
“Our focus remains on improving outcomes for our customers, and we are doing this by investing in our people, technology and processes. We’ve a deeply held purpose to support New Zealanders when they suffer loss. Our products and services are designed to protect what matters to customers and everything we do is directed to that purpose.”
The New Zealand general insurance business, which comprises Vero Insurance, Vero Liability and direct channel AA Insurance delivered a net post-tax profit of $150 million, down 15% on the year before.
Suncorp said the intermediated channel experienced “strong growth reflecting the value New Zealanders place on expert advice and the important role that insurance brokers play in the insurance market”.
The group said Vero Liability also delivered strong results.
Across Suncorp’s NZ general insurance business, gross written premiums grew 14%, with intermediated and direct channels recording strong growth through a combination of customer growth and pricing increases that were “necessary to offset the inflationary pressures that we continue to experience”.
Higgins fired a warning about the year ahead, predicting natural hazard weather events would become more frequent and expensive, leading to higher reinsurance costs.
Higgins added premiums would also be impacted by the pressure on materials and labour costs in repairing homes and cars, and increases in Toka Tū Ake EQC levies following the increased EQC cap changes in October later this year.
“The strength of our reinsurance programme allows us to provide insurance protection to customers throughout New Zealand and we are continuing to provide support to those customers that experience vulnerabilities, particularly as they manage through the costs of living pressures that exist in New Zealand today.
“The tight employment market and the living cost pressures in New Zealand makes it difficult to attract and compete for talent in other countries,” Higgins added.
