Suncorp New Zealand says the hardening price cycle may already have started moderating in some parts of the market.

The impact of the Kaikoura earthquake and heightened claims inflation in home and motor led to market-wide gross written premium (GWP) growth of 9.5% last financial year.

“Our view is that the hardening cycle will moderate,” Suncorp NZ CEO Paul Smeaton told an investor conference. “You could argue [that] in some parts of the market it has already started.

“Our view therefore is GWP growth will return to mid-single-digit levels as industry participants transition from rate-driven growth to unit growth.”

Mr Smeaton says the company is comfortable with the profitability of its portfolios, and combined operating and loss ratios are in “very good shape”.

An increase in the Earthquake Commission cap to $NZ150,000 ($140,100) from $NZ100,000 ($93,400) from July 1 is not expected to have a material impact on Suncorp GWP.

The company says it is not changing its approach towards high-risk areas, but will monitor its exposures.

In the life insurance business, Suncorp NZ expects underlying profit levels to be maintained, with no significant movements in experience anticipated.

The company is also undertaking an independent business improvement program that will drive operational performance.

“These business improvement initiatives combined with disciplined portfolio management give us confidence in the outlook for the business,” Mr Smeaton said.