Suncorp says it will pursue efficiency gains, including in claims handling, to ensure margins remain strong as the premium cycle moderates.  

“We think there’s a long runway available to us, using AI, automation, partnering, digitisation to really make sure our business is operating as efficiently as it can,” CEO Steve Johnston told an earnings briefing last week. 

Suncorp’s half-year profit jumped 89% to $1.1 billion, driven by bank sale proceeds, relatively benign natural perils experience and supportive investment markets.

General insurance gross written premium increased 8.9% to $7.5 billion, reflecting unit growth and the pricing response to claims inflation and a higher natural hazards allowance.

“While GWP growth remains within our expectations, we have seen some moderation, particularly in New Zealand and in some pockets of the Australian commercial business,” Mr Johnston said. “In consumer, where growth remains strong, moderation of inflation will be reflected in lower price increases, particularly in motor.”

Mr Johnston said a focus on margin and returns has produced some easing in volume growth.

“I would make the point that in home, in particular, we are very focused on the quality of our underwriting now that we have the ability to risk-price across natural hazard perils.

“This granularity in underwriting is seeing the quality of our home book improve even though the net volumes remain the same.”

General insurance profit after tax rose 71.6% to $875 million, with Australian consumer insurance earnings rising to $423 million from $203 million a year earlier. 

Commercial and personal injury profit rose 7.2% to $208 million, and the New Zealand result jumped to $208 million from $74 million.

The company expects mid to high single digit GWP growth for the full year and an underlying insurance trading ratio towards the top of a 10%-12% range. But Mr Johnston cautioned that in any year, shifts in the wider environment can affect the second six months.  

“The position ... can change markedly in the second half with one or two hazard events, and the utterances of a global leader anywhere in the world can adjust risk appetite in investment markets.”