By Rebecca Delaney

Feb 18 - (The Insurer) - A more benign natural catastrophe experience in the second half of the 2024 calendar year was beneficial to all three listed Australian carriers, with the trio reporting natural perils costs below their respective allowances for the six-month period.

Suncorp was the first of the three to post its financial results, reporting for the first half of its 2025 financial year on February 12.

Between July 1 and December 31, 2024, Suncorp reported total natural hazard costs of A$503 million ($321 million) – A$277 million below its half-year allowance.

Suncorp said it had benefited from what it described as a benign natural hazard period, with six weather events above A$10 million in Australia and no significant weather events in New Zealand.

For comparison, the prior period in New Zealand was significantly impacted by two large natural hazard events that contributed to an increase in the natural hazard allowance and reinsurance costs.

The following day (February 13), Insurance Australia Group reported net perils costs of A$426 million for the first half of its fiscal year.

Similarly, this was A$215 million below its allowance for the six-month period, with one major event of A$53 million in August.

IAG added that it expects to achieve insurance profits of between A$1.4 billion and A$1.6 billion for the 2025 financial year, which assumes full-year natural peril costs of A$1.28 billion, with H2 costs of A$857 million.

QBE reports according to the calendar year and therefore does not have directly comparable figures for the six-month period.

The Andrew Horton-led carrier reported net costs from catastrophe claims of $527 million for the first half of the 2024 calendar year, below the group's H1 catastrophe allowance of $609 million.

For the full year, QBE posted a net cost of catastrophe claims of $1.05 billion, below the group’s 2024 catastrophe allowance of $1.28 billion (marking the third consecutive year where nat cat costs have tracked at or below budget).

Assuming its first-half catastrophe loss bill remained largely unchanged, this would suggest QBE's net cost of catastrophe claims for the second half of the year was around $521 million, below its allowance of $671 million.

Speaking on the firm’s earnings call, group CFO Inder Singh said its share of hurricanes Milton and Helene were “substantially lower” than comparable events in recent years.

GWP, PROFIT AFTER TAX INCREASE ACROSS THE BOARD

The lower nat cat burden helped drive improvements in several other financial metrics for the three carriers, including broadly favourable reserving trends.

Suncorp posted general insurance profit after tax of A$875 million for the first half of its 2025 financial year, up 71.6% on the prior-year period, while general insurance GWP grew by 8.9% to A$7.6 billion.

Suncorp New Zealand (which delivered half-year profit of A$208 million) had recently completed the previously announced sale of its life insurance business, Asteron Life Limited, to Resolution Life NOHC.

The sale and run-off of non-core business segments has been a key strategic priority for QBE over the past three years, having exited North American property programs and its North American middle-market portfolio, as first reported by this publication in June last year.

QBE said last Friday that it expects the drag from exited lines to moderate in 2025 and beyond as the carrier concludes its shedding of non-core and unprofitable business.

While QBE did not break out its six-month figures, based on the deduction of its first-half figures from its full-year results, QBE produced profit after tax of $977 million in the six-month period, with GWP of $9.35 billion and insurance revenue of $7.37 billion.

IAG posted a 6% year-on-year increase in GWP to A$8.4 billion, driven primarily by Retail Insurance Australia and Intermediated Insurance Australia, which produced growth of 6.1% and 10.1%, respectively.

Most notably, IAG’s net profit after tax rose to A$778 million in H1, almost double the A$407 million reported in the same period in the prior year.

As well as lower-than-anticipated weather losses, this was driven largely by the release of pandemic-related business interruption reserves.

On January 31, IAG said it expected to release A$200 million of reserves after the expiry of the appeals period for a business interruption policyholder class action filed against Insurance Australia Limited. This translated into A$140 million of post-tax releases.