Suncorp Insurance CEO Gary Dransfield says pricing in commercial portfolios has reached levels necessary for sustainable returns, with the firm cutting back in areas that fell short of requirements.

“We have been really focused at Suncorp, through the Vero brand, on getting what we think is an appropriate price for the risk we are bearing,” he told insuranceNEWS.com.au on the sidelines of the firm’s Synergy event in Melbourne.

“With perhaps very few exceptions in portfolios now, our pricing is set where we think it needs to be for a sustainable return. What it means is that we have exited some portfolios, customers and agency business where we couldn’t get a sustainable rate of return.”

Areas affected have included strata, high-risk property and some of the liability classes.

Mr Dransfield says insurers are likely to face low interest rates for longer than expected, raising the stakes for pricing as investment income comes under pressure.

“Underwriting performance has got to stand on its own two feet and that is what we have been focused on,” he said.

Insurers are also under increasing scrutiny as the Federal Government follows up recommendations from the Hayne royal commission.

Mr Dransfield says ultimately reforms will be beneficial and the level of public policy change shouldn’t be seen as a “drudge”.

“It will strengthen all the arms of the financial services sector in terms of the outcomes we produce for customers, and ultimately makes your business more resilient and sustainable … whether you are a broker, an adviser or a product issuer,” he says.

But he says it is important a holistic approach is taken to ensure changes in one area don’t have “unintended consequences” elsewhere.