The sale of its banking division to ANZ (ASX: ANZ) has led to a one-off gain of $252 million for Suncorp Group (ASX: SUN) in the December half, with the group posting a $1.1 billion net profit after tax (NPAT) for the period as cash earnings from operations also rose by 30 per cent.

A favourable natural hazards situation that was $277 million below Suncorp's allowance, as well as positive investment returns, also contributed to the sharp uptick in NPAT from a $582 million result in the December half of 2023.

On 5 March the group will return more than $3.8 billion - or $3 per security - to shareholders as the first tranche of a return on capital program related to the Suncorp bank sale.

The board has confirmed that the first tranche of a return on capital of $3 per share from the Suncorp Bank sale will happen on 5 March, amounting to a return of more than $3.8 billion to shareholders. This will be followed by an extra $280 million around a week later through a $0.22 per share special dividend.

"These results reflect our discipline in executing strategic and operational priorities. We have delivered to our commitments, we are financially strong and resilient, and we have created future capacity to invest in initiatives to support our customers," says Suncorp CEO Steve Johnson, after cash earnings not related to the sale rose from $660 million to $860 million.

"It is pleasing to be returning the net proceeds of the sale of the Bank to shareholders. It’s significant that we have been able to deliver the same net proceeds that we forecast when the transaction was announced almost 1,000 days ago.

"We also completed the sale of Asteron Life on 31 January 2025, positioning Suncorp as a simplified pure-play general insurance company."

Johnson says over the past six months the group has continued its focus on improving how it serves customers, including expanding its claims team and supply chains.

"We have redoubled our efforts to address those claims that have remained unresolved from prior year events," he says.

"Increases in customers’ premiums are now moderating, with home construction and car repair costs showing signs of stabilisation, margins approaching or within our target ranges and reinsurance markets remaining constructive.

"We have focused on investing to improve customer experiences with digital interactions now 61 per cent across sales and service, and more than 41 per cent for claims, increasing to around 70 per cent during weather events. We saw an uplift in our claims Net Promoter Score by 6 points over the half, testament to the improvements we are making in this area."

The total cost of natural hazards was $503 million, which was $277 million below the company’s allowance in the half in what it described as a "benign natural hazard period" with six weather events above $10 million in Australia and no significant weather events in New Zealand.

"We have proven to have a disciplined approach to capital management with the amount and quality of capital superior to our peers. This approach has served shareholders well over time with Suncorp one of the few financial services companies not undertaking large-scale, dilutive capital raisings during COVID," adds Johnson.

"Our commitment to return capital in excess of the needs of the business and our robust capital position as at 31 December 2024 means we have the capacity for further capital management initiatives, most likely the establishment of an on-market buy-back facility. We will update the market further once the Bank proceeds have been returned to shareholders.

"Our customer base shows our brands and services are valued, as we know cost-of-living pressures continue to challenge many Australians and New Zealanders."

He notes the company pays around $10 billion in claims, and says the group recognises its "past communications and practices did not always meet our customers’ expectations".

"Since 2022, we have expanded our home claims team by more than 150 permanent full-time employees and established an oncall Lodgement Response Team so we can quickly scale up for major weather events," the CEO says.

"In the last half we have identified and supported around 6,400 customers who are experiencing vulnerability, and our team has undertaken over 3,100 hours of training to improve how we support these customers.

"We have invested in a new state-of-the-art Disaster Management Centre in our Brisbane head office – a high-tech facility designed to enhance our response before, during and after extreme weather events. We are also rolling out five new Mobile Disaster Response Hubs to respond faster and reach more customers sooner in impacted communities.

"“Late last year, we announced the location of our new office in Townsville, with a commitment to hire an extra 120 people to support customers in one of Australia’s most disaster-prone regions."

Johnon says that globally, insurers and their customers are on the front line of the impacts of climate change.

“Severity and frequency of extreme weather is becoming an increasingly large part of everyone’s premiums through natural hazard budgets and reinsurance protection,” he says.

“While we benefited from good weather conditions well below our expectations this half, over the last five years, we have delivered in line with our increasingly robust natural hazard budget.

“Suncorp remains committed to working with governments, other insurers, banks, technical experts, community organisations and homeowners to reduce Australia’s exposure to natural hazard risks. Reducing risk will not only protect lives, homes and businesses, but it will also go a long way in reducing the risk of a claim, in turn ensuring Australians and New Zealanders can access affordable, fit-for-purpose insurance.

“It's a topic worthy of debate at the forthcoming Australian Federal election. We believe the aim should be a dollar-for-dollar pre and post disaster spending ratio. For every dollar spent mopping up after disasters, a dollar is invested in mitigation. That will equate to a multi-year, multi-billion-dollar investment in the future resilience of our nation."

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