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Suncorp reports rising profits

Suncorp has reported net income of $537 million for the six months to December 31, up 1.32% on the corresponding period in 2015.

Insurance profit in Australia increased 42.5% to $369 million thanks to top-line growth, lower claims costs and disciplined expense management.

Gross written premium (GWP) growth of 6.2% was driven by the compulsory third party portfolio, which increased 27.3% on successful entry into the SA market and growth in NSW.

Home and motor GWP increased 2.4% and 1.6% respectively, but the commercial market “continues to be highly competitive”, with GWP growth of 0.4%.

CEO and MD Michael Cameron says remediating home and motor claims costs has been the group’s top priority.

“Our turnaround program in claims is seeing some success, but there is clearly more to do,” he said.

“In both home and motor, we have reduced the number of active claims to more normal levels.”

New Zealand net income of $NZ37 million ($34.95 million) was affected by the Kaikoura earthquake and new Canterbury quake claims.

Mr Cameron says that over the past year the group has been “significantly repositioned”, referring to a strategic shift to elevate customer needs.

“We have achieved a lot, and the next 12 months will be about settling into a different way of working, and fully embedding the plan into the organisation to enable disciplined execution of our strategy.”

Suncorp says further GWP growth and a strong focus on claims management is expected to deliver an improvement in the underlying insurance trading result in the second half.

“New Zealand’s pricing response to the Kaikoura earthquake will mitigate the impact of additional reinsurance reinstatement costs,” it said.

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