Suncorp New Zealand announces FY19 Full Year Results

7 August 2019

Suncorp New Zealand today announced net profit after tax (NPAT) of $261 million for the full year ended 30 June 2019, up 76% on the prior corresponding period (FY18).

CEO Paul Smeaton said the strong result was partly driven by an unusually low claims year for natural hazard events.

“This is in stark contrast to the severe weather events of 2017 and 2018 which cost the insurance industry $469 million in claims, according to statistics from the Insurance Council of New Zealand,” said Mr Smeaton.

“New Zealand is rated second in the world in terms of our exposure to national catastrophe, and we only need to look to the 2010/2011 Canterbury earthquakes and 2016 Kaikoura earthquake for a reminder of just how exposed we are.”

Mr Smeaton said he expected New Zealand’s strong performance to continue into FY20.

“However, our expectation is that growth will return to lower single digit-levels, and claims will return to more normalised levels following very favourable weather conditions in FY19.” said Mr Smeaton.

General insurance result

The general insurance business, which includes Vero Insurance and AA Insurance (a joint venture with the New Zealand Automobile Association), delivered profit after tax of $217 million, up 99% on the prior corresponding period.

This was driven by disciplined portfolio management delivering strong top-line growth and favourable working claims experience, and the absence of any major natural hazard events.

Life insurance result

The life insurance business, which includes Asteron Life and AA Life (a joint venture with the New Zealand Automobile Association) delivered profit after tax of $44m, up 12.8% on the prior corresponding period. In-force premium grew by 3.9%, supported by policy retention and premium price growth.

Mr Smeaton said Asteron Life had submitted its formal response to the New Zealand regulators’ review of life insurer conduct and culture in New Zealand, which included a detailed action plan to address specific regulator feedback with a focus on delivering good customer outcomes.

“This includes addressing regulator expectations regarding staff incentives by removing all internal sales-based incentives from 1 July 2019.”

Suncorp commitment to address climate change

Mr Smeaton said FY19 had seen Suncorp New Zealand join the Climate Leaders Coalition and commit to reducing greenhouse gas emissions to targets in line with New Zealand’s proposed Zero Carbon Bill.

“Since we started measuring our emissions in 2017-18, we have reduced our Scope One and Scope Two emissions* by 16% and are on track to meet our new target for our corporate operations of a 51% reduction in these emissions by 2030, which is in line with the Paris Agreement.”

“In addition to this we continue to explore opportunities to build natural hazard resilience and financial resilience for New Zealanders.”

Outlook

Mr Smeaton said FY20 would see Suncorp New Zealand continue to focus on building a resilient business to meet a greater number of customer needs, with increased investment in digitising the business, improved customer communications, and improved claims experience.

The full Suncorp Group result can be found here.

* Scope 1 are direct emissions from sources owned or controlled by Suncorp (e.g. emissions from manufacturing, burning of diesel fuel in trucks and fleet vehicles). Scope 2 are indirect emissions from Suncorp’s consumption of purchased electricity or other sources of energy generated by another upstream organisation (e.g. electricity purchased from energy companies).

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