Suncorp’s general insurance book has weathered the surge in natural catastrophes to record a $392 million profit after tax, but CEO Patrick Snowball says the bottom line “is still not where it should be”.

Full-year results to June 30 show that although Suncorp received more than 100,000 claims across Australia and New Zealand amounting to more than $4 billion, it still recorded an underlying insurance trade result of 10.8% – up from 9% in the previous financial year.

Commercial Insurance CEO Anthony Day says the group’s ability to manage what is arguably the worst series of natural disasters experienced in the region also strengthened the insurer’s position in the market.

“We will continue to capitalise on this position, and a key to this is the greater empowerment of our people in broker-facing roles through better support and information-sharing from portfolio, underwriting and claims areas,” he told insuranceNEWS.com.au.

The results shows general insurance premium income increased by 5.2% to $7.28 billion, with home and motor portfolios showing the most promise by rising 11.5% and 4.4% respectively.

And while commercial insurance experienced increases in competition for SME business, larger corporate property risks saw a decrease in competition due to rates hardening in the second half as a direct result of the increased natural hazard events and related reinsurance costs.

But despite these relatively strong results, Suncorp remains committed to increasing its underlying general insurance business margin by at least 3% by June next year.

Suncorp Life also recorded modest results, with a $149 million profit after tax compared to $222 million the same time last year.

Reduced profit levels have been impacted by increased claims following this year’s weather-related claims, policy lapses and diverted businesses.

But Mr Snowball says an increased growth in direct channels is very encouraging as it accounts for about a quarter of new life business.

Not surprisingly, the New Zealand sector didn’t fare well as a result of the Christchurch earthquakes, with the balance sheet revealing a trading deficit of $203 million compared to a $70 million profit in 2010.

Mr Snowball says although natural hazard claims cost $325 million more than expected and an additional $232 million in reinsurance cover needed to be purchased, strategic moves to steadily increase rates across the book in March last year put Suncorp in a good position to face this year’s catastrophe events.

Suncorp put a precautionary 10% rate rise into place following the Melbourne hailstorms in March last year, which caused more than $460 million in damage to cars and homes.

“No one else in the market followed us, but it put us in a good position and we are now seeing the benefit of that coming through,” he told a media briefing.

Suncorp also applied an additional 10% across its book in February following the Queensland flood crisis and the Christchurch earthquakes, and added another 4% at time of renewal.

“This accounted for increases in our reinsurance costs, and because we are a monolithic company we can put these changes in quickly,” Mr Snowball said.

But he believes that due to these strategic increases there is no room left for Suncorp to increase prices any further, saying there comes a point when a business has to be “sensitive” to customers’ needs.

“We have to be sensitive, especially if this economic downturn is coming through,” he said. “We need to keep the prices where they are.”