Apart from anything else, Suncorp CEO Patrick Snowball’s market announcement last week should see the retreat of some tanks from his lawn regarding the speculated sale of the banking operation.

The commitment to banking as part of an allfinanz model was spelled out. And his reassurance that the bank’s bad debts are on the wane took nothing away from the new sense of plausibility for a future in bancassurance, even though evidence suggests the competition watchdog might not let a sale happen anyway – at least not any time soon.

In the general insurance space, Mr Snowball underlined his push for a specialist focus by promoting Suncorp’s two new divisional general insurance leaders – Mark Milliner (Personal Insurance) and Anthony Day (Commercial) to the rank of CEO in their respective areas.

However, the other Snowball campaign – for a move away from the complexity of multiple back-office systems toward multiple brands with one system – is potentially trickier.

Abandoning the “Promina model” of “many companies, many brands” will require plenty of strategic acumen on the CEO’s part as the paradigm shift hits home among the ranks.

And as Morningstar analyst David Walker points out, it amounts to a significant point of difference between Suncorp and rival IAG.

“There will obviously be some cost savings there, although there was no specific guidance on those,” he told insuranceNEWS.com.au. “But they are usually significant when you amalgamate back offices.

“So what you’ll now have is the two majors with different internal structures. You’ll have IAG which is implementing the Promina model under Mike Wilkins, and Suncorp with its traditional model.”

Mr Walker is cautious about predicting a winner for any battle of systems, but says one possibility is that IAG will grow gross written premium faster – which is what Promina was able to do with its niche approach – but Suncorp will emerge as the more cost-efficient.

Ibisworld analyst Richard Jeremiah says the new structure makes a lot of sense from a cost perspective but putting it in place will be no walk in the park.

“All the brands are pretty valuable and well recognised and how that flows from the retail end into the back-office operation will probably be a bit more difficult than it might seem from first appearances,” he told insuranceNEWS.com.au.

Credit Suisse analyst Arjan van Veen says Mr Snowball’s integrative push is no great bombshell because former Suncorp CEO John Mulcahy was moving in that direction anyway.

“If you’re going to run so many different brands, it does make sense to consolidate the back office as long as you can make it unnoticeable from a customer point of view,” he told insuranceNEWS.com.au.

Mr van Veen says potential sales for parts of the non-core banking book, as reported in the financial media, could significantly reduce the influence of banking in the mix.

Mr Jeremiah says unfolding developments in the life insurance and wealth management industry with huge players such as AMP, Axa, NAB and ANZ, will also keep Suncorp on its toes.

“I don’t think they’ll want to be left out of the game there, so they’ll have to focus on that and make sure they do offer their customers an integrated product offering to ensure they stay relevant,” he said.

“These wealth management behemoths that will rise up are going to establish huge amounts of market power and they are going to be the ones that will innovate and take wealth management to a new level.”

Analysts agree Suncorp’s bancassurance model will not be an easy one to pull off, but Suncorp will fare best if it keeps its banking focus on core retail and small to medium enterprises.

“In the end, how the banking and insurance businesses integrate depends on putting the right processes in place,” Mr Jeremiah said.

For a market announcement at such a crucial time for Suncorp, Mr Snowball’s address was notably short of guidance and sweeping visions.

However, the rather quiet general insurance revolution about to unfold will no doubt be observed closely. It is hard to imagine how collateral damage among the ranks can be avoided.

For Mr Snowball, the shifting Suncorp paradigm will at least allow him a clear area of fire as he institutes a system that allows him to move forward defensively with confidence.