Suncorp New Zealand saw profits drop by 34.9% in the six months to December due to a sharp increase in severe weather events.
Post-tax profit fell to $84 million in the half-year due to a series of flood events and declining investment income, and “adverse” market conditions.
The insurer, whose NZ operations include Vero Insurance and AA Insurance, was hit by a series of weather events in the second half of last year.
Chief executive Jimmy Higgins said the underlying business displayed growth, despite the weather-related losses.
“New Zealand experienced a number of flood and storm events in the second half of 2021, including the severe storm that affected Westport and all of central New Zealand in July, and flooding in west Auckland in August,” Higgins said.
According to Higgins, three weather events in July, August, and September resulted in $52 million in claims. Total weather-related claims hit $72 million, a 41.2% increase on the corresponding period in 2020.
“We’re experiencing rising input costs to both premiums and claims as well as disruptions in global market conditions that are significantly affecting investment returns. But we continue to focus on supporting New Zealanders and Kiwi businesses through difficult times.”
Higgins said Suncorp NZ had provided more than $1 million in support to businesses in need during the floods.
“In the past six months, we’ve provided close to $1m in support to customers who have suffered financial hardship,” he says. “We’ve been there supporting our customers following major weather events and also donated $150,000 to community organisations in Auckland and Northland to support communities affected by the Delta lockdown.”
Higgins said delivering customer value remains a strategic focus for the business, despite potential economic headwinds.
“We’re seeing good growth across all our lines of business because our customers know we will be there to support them now and in the long-term,” he added.
Suncorp’s NZ general insurance business delivered a net profit after tax of $78 million, down 22% on the last half of 2020.
It said intermediated and direct channels showed strong customer growth, with revenue up 14%.
