Suncorp New Zealand reported a $2 million profit drop in the year to June.
The New Zealand arm of the insurance company announced a net profit after tax (NPAT) of $259 million, down from $261 million a year earlier.
The result was driven by underlying premium growth, offset by higher natural hazard claims following periods of benign weather conditions, Covid-19 customer support, customer remediation provisions and increased life insurance claims.
Parent company Suncorp Group Limited announced a NPAT of A$913 million.
Suncorp New Zealand acting chief executive Jimmy Higgins said the result reflected a strong performance across the entire business.
The New Zealand general insurance business, which includes Vero Insurance and AA Insurance (a joint venture between Vero and the New Zealand Automobile Association) delivered profit after tax of $219 million, up 0.9% on the previous corresponding period.
Vero said that was driven by disciplined portfolio management, earned premium growth including solid unit growth, and favourable claims experience and was partially offset by increased natural hazard costs and customer remediation provisions.
Natural hazard costs were up $25 million on the prior financial period, when the country experienced relatively benign weather conditions. A significant hailstorm in Timaru in November contributed $20 million to the net natural hazard cost incurred for the year.
During FY20, a total of $18 million in customer remediation provisions was recognised against General Insurance premium income, largely relating to issues with customer discounts in prior periods.
Suncorp New Zealand announced up to $30 million worth of customer support options in response to Covid-19 related impacts, ranging from premium waivers and discounts for customers experiencing financial hardship, through to premium rebates.
Included in this amount, AA Insurance is returning $19.5 million in rebates to customers in recognition of the significantly lower risk environment during the most restrictive period of lockdown. AA Insurance has also created a $2 million fund for customers in genuine financial hardship.
Vero has announced up to $10 million in hardship funds for both business customers and individuals, primarily through premium waivers and assistance, to help customers experiencing financial hardship due to Covid-19 to keep key insurances in place. The support provided to Vero customers has averaged more than $400 for individuals and $2,500 for business customers.
During the lockdown Suncorp surveyed New Zealanders and found that 60% preferred company savings to be passed back to those most in need, while 21% wanted to receive refunds themselves.
Higgins said: “In situations where customers have an intermediary to support them, it’s possible to offer more tailored options to help ensure those who are most affected keep their insurance cover in place and don’t expose themselves to unnecessary risk.”
Suncorp New Zealand also donated $100,000 to domestic violence prevention charity Shine during the lockdown to help keep children in temporary housing connected with their schools through the provision of digital devices and internet services.
