• Net Profit: Up 89%, driven by strong underlying business performance and key contributors such as natural hazard experience and gain on sale of the bank.
• Natural Hazard Experience: $277 million below the allowance due to benign first half weather.
• Gain on Sale: $252 million added to profit from the sale of Suncorp Bank.
• Interim Ordinary Dividend: $0.41 per share, with a payout ratio of around 61%.
• Capital Return: $4.1 billion or $3.22 per share from the sale of the bank.
• GWP Growth: Increased around 9%, with strong top-line growth.
• Underlying ITR: Improved by 160 basis points to 11.8%.
• Consumer Portfolio Growth: Home portfolio grew by 10%, Motor GWP increased by over 10%.
• New Zealand GWP: Up 6%, with strong growth in the consumer portfolio.
• Investment Performance: Remained elevated with strong yields and higher equity market returns.
• General Insurance Operating Expenses: Increased 7% due to investment in strategic projects.
• FY25 Outlook: GWP growth expected in mid to high single digits, underlying ITR towards top end of 10-12% range.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Suncorp Group Ltd (SNMCY) reported a net profit increase of 89%, driven by strong underlying business performance and key contributors such as a benign natural hazard experience and the gain on the sale of the bank.
• The company has completed its simplification journey, emerging as a pure play insurer, which allows it to focus entirely on delivering better products and services.
• Suncorp Group Ltd (SNMCY) is maintaining a strong balance sheet and capital position, enabling a significant capital return to shareholders, including a $4.1 billion return from the sale of the bank.
• The company is investing in modernizing its core systems, including moving data to the cloud and implementing a new policy administration system, which positions it at the forefront of industry change.
• Suncorp Group Ltd (SNMCY) has achieved strong growth in Gross Written Premium (GWP), with a 9% increase, and maintained margins at the top end of its target range.

Negative Points

• The gain on the sale of the bank is a one-off event, and future results may not benefit from similar gains.
• Natural hazard events and global market fluctuations pose risks to the company's financial performance, as highlighted by the potential for significant changes in the second half.
• The company faces challenges in the insurance affordability space, with increasing natural hazard events and inflation putting pressure on customers.
• Suncorp Group Ltd (SNMCY) has seen some moderation in volume growth, particularly in the home insurance segment, due to a disciplined approach to pricing and margin focus.
• The company is experiencing competitive pressures in various segments, including commercial lines and consumer portfolios, which could impact future growth and profitability.

Q & A Highlights

Q: Could we get some more color on the portfolio quality improvements that you're putting through in home? How should we expect to see this come through through lower loss ratios or better volatility on the portfolio? A: Jeremy Robson, CFO: The impact on the portfolio of that risk mix change is evident, and we expect reduced volatility. Lisa Harrison, CEO of Insurance Product & Portfolio, added that their pricing engine allows for more granular pricing and better claims management, which supports these improvements.

Q: Can you comment on the pricing that you're seeing across the commercial lines, and have you seen any opt-in competition there? A: Michael Miller, Chief Executive Commercial & Personal Injury Insurance: Input costs are reducing, so overall we don't need to put the same price through this year as in previous years. Competition is increasing, particularly from offshore, but it's more directed at the corporate sector.

Q: How should we think about inflation and pricing on a forward basis for the Australian consumer portfolios? A: Jeremy Robson, CFO: In home, fire claims are volatile, but we believe there's a trend due to lithium-ion batteries, and we've adjusted pricing accordingly. Lisa Harrison added that motor inflation is moderating, allowing them to remain competitive.

Q: Can you provide an update on the new operating platform rollout and its impact on operations? A: Lisa Harrison, CEO of Insurance Product & Portfolio: The first release in New Zealand is in the testing phase and expected to go live this half. Jimmy Higgins, CEO of Suncorp New Zealand, noted significant efficiency gains from the new platform.

Q: What is your approach to inorganic growth opportunities, particularly with automobile clubs coming up for auction in Australia? A: Jeremy Robson, CFO: We are open to considering inorganic growth opportunities if they make strategic sense, we have the capacity to execute, and the economics stack up.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.