Suncorp New Zealand recorded strong profits in the six months to December and continues to support customers facing Covid-related financial hardship.
The insurance group announced a net profit after tax of NZ$129 million for the six months to 31 December 2020, up 19.3% on the prior corresponding period.
Its Australian parent company Suncorp Group announced an NPAT of A$490 million.
CEO Jimmy Higgins said the result demonstrated the strong performance of the business, despite the impact of natural catastrophe events.
“We’re seeing unit growth in both our direct channel and the broker-intermediated lines, alongside broadly flat operating costs,” Higgins said.
“The business is in a very strong position and we have the strategy and resources in place to focus on growth, as well as investing in technology and processes that will make our business more efficient and easier to do business with.”
Suncorp’s NZ general insurance business, comprised of Vero Insurance and AA Insurance, delivered a net profit of $100 million, 6.4% higher than the same period in 2019.
Higgins said the AA Insurance business achieved strong growth in the personal lines, and Vero experienced unit growth across consumer lines in the broker channel, with targeted pricing initiatives driving unit growth. Claims costs were 6.0% higher, mainly attributable to increased natural hazard claims.
“Over the period we saw significant weather events including floods in Northland and Napier and the fire in Lake Ohau, which contributed to natural hazard costs that were $19 million above the prior period,” said Higgins. “We continue to assess the resilience of communities exposed to natural hazards, and we have a strong focus on the sustainability of our own business.”
Suncorp said motor claims returned to more normal levels despite the regional lockdown in Auckland. It added motor repairs figures had changed, due to pressure on repairers’ supply chains.
“We’ll be keeping a close eye on this to see if it is likely to be the new normal, or whether claims costs in motor return to previous levels when global supply lines improve,” Higgins added.
While Vero will no longer distribute construction or consumer insurance products via intermediated partners in Australia, that decision will not affect Vero NZ.
“Vero New Zealand operates as a standalone business that is committed to growing its consumer book through its New Zealand distribution partners. The intermediated consumer insurance book is strategically important to our business and we have no plans to exit that market,” Higgins added.
The group continues to support people struggling following the Covid lockdowns.
Higgins said that the hardship fund established by Suncorp New Zealand last year continues to be available to customers experiencing financial vulnerability.
“Insurance plays a big part in New Zealanders’ financial resilience, and we want to help customers maintain cover through these uncertain economic times. We also continue to look for new ways to provide products and services that meet different views of value and accessibility.”
In November, the group unveiled a new partnership with non-profit group Good Shepherd NZ to trial an affordable car insurance product for those “who might be excluded from the traditional car insurance market”, as part of its “financial inclusion plan”.
Higgins said: “We are hoping that this trial will deliver some insights into how easier access to appropriate insurance might help New Zealanders to develop greater financial resilience.”
The group is also making progress in its aim to become a more sustainable business.
In 2020 Suncorp New Zealand was shortlisted for the Sustainable Business Network’s Climate Action Leader Award, for “its commitment to renewable energy generation and reducing emissions”.
“Our investment in renewable energy certification is an important step towards meeting our greenhouse gas emission reduction targets and demonstrates our commitment to supporting energy generation that aligns with our company’s values,” said Higgins.
Suncorp New Zealand is aiming for net-zero emissions by 2050 in line with the New Zealand’s Zero Carbon Act.
During the six month period, the group also announced it had increased its partnership with the TupuToa programme, with seven new Maori and Pasifika interns
“In partnership with organisations like TupuToa, we are striving to grow opportunities and create employment pathways for the next generation of Maori and Pasifika business leaders,” Higgins added.
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