Newly acquired Promina group has given Suncorp’s lagging insurance portfolio a shot in the arm as the bancassurer’s emboldened insurance wing helped take total profit to a company record.

Suncorp posted a 16.2% increase in net profit after tax to $1.064 billion for the year ended June 30 – slightly ahead of analysts’ predictions of $1.05 billion.

But it was the addition of Promina rather than any substantial rise in organic growth that fuelled Suncorp’s record result, with only slight gains in gross written premium (GWP) coupled with flat profit in Suncorp’s core insurance business.

The bancassurer’s general insurance division lodged a 20.8% profit increase to $835 million, with Promina adding $129 million since joining the group in March.

The Promina operation, which seems to have maintained its growth momentum since coming under Suncorp’s wing, boosted its premium book by 4.3% for the period. That took total GWP to $3.78 billion, up 40.8%.

CEO John Mulcahy says Suncorp has saved $55 million through the merger and is expecting $225 million in future annual integration savings. He expects the integration of Promina to be complete by the third quarter of next year.

Apart from the Promina contribution, Suncorp’s general insurance operation had a flat earnings period, with tight competition in NSW and Queensland compulsory third party lines, ongoing cuts in commercial rates and storm claims taking a toll on the bottom line.

Despite a $100 million hit from the NSW and Victorian storms, Suncorp’s claims fell 3.9%. Promina, which paid out $60 million for storm damage, had a 5.8% increase in claims.

GWP in Suncorp’s insurance division before adding Promina to the mix fell 0.2% for the full year, and insurance profit in the second half fell more than 10% to $323 million.

Full-year insurance profit for the Suncorp entity was flat at $706 million, mainly due to reduced personal injury and liability claims.

Suncorp’s result was also bolstered by the release of nearly $500 million in reserves from long-tail classes, with Suncorp releasing $300 million on reduced liabilities.

Mr Mulcahy will be concerned by falls in GWP across Suncorp’s entire portfolio, with the exception of home lines, which rose by 6.3% in Suncorp and 13.15% in Promina.

Promina also gained ground in motor lines, notching up a 7.5% rise in GWP to $1.363 billion, while Suncorp’s motor businesses took a small hit, falling to $748 million.

Mr Mulcahy has restated his insurance trading result guidance for Suncorp and Promina at 16-19% and 10% respectively, or a combined forecast of 13-16%.