Suncorp’s net profit declined 1.5% to $1.06 billion last financial year, but the company says the second half improved sharply on the first and business investments will drive stronger results.

CEO Michael Cameron says Suncorp is ahead of target on an improvement program and seeing early benefits from digitisation changes that provide easier access for customers.

“We have made significant progress in transforming the business,” he said. “We have got really good momentum that will see us deliver further uplift in shareholder returns.”

Australian general insurance gross written premium (GWP) grew 0.3% to $8.14 billion, while net profit declined 1.2% to $681 million.

Home and motor achieved average premium increases of 3.8%, while compulsory third party GWP fell 17.1% due mainly to NSW reforms.

Commercial GWP grew 0.8% to $1.51 billion as margin was prioritised over growth.

Mr Cameron says percentage rate gains across the portfolio ranged from high single digits to mid-to-high teens in the mid-year renewals, with repricing still required in the commercial sector.

The company says claims inflation in motor is well below industry levels, with initiatives such as the SMART repair network delivering results.

Suncorp is also seeking to step up efficiencies from a home repair operation that co-ordinates work.

“While it is still small, it is also delivering benefits for us,” Mr Cameron said.

Australian natural hazard costs were $625 million, $36 million below the full-year allowance.

Victorian hailstorms in December were the largest event and weighed on the first-half result, while conditions were more benign in the second half.

Regulatory spending increased by $40 million to $54 million for the year and Suncorp has budgeted for an increase to $90 million this year.

New Zealand general and life insurance net profit grew 70% to $NZ148 million ($132.7 million), despite increased weather events and natural hazard volatility.

“Strong growth, claims management and expense control have all contributed to a more positive result compared to the prior year, which was significantly affected by the Kaikoura earthquake,” New Zealand CEO Paul Smeaton said.

General insurance GWP grew 10.2% after adjusting for the sale of the Autosure motor warranty book in March, and the division delivered an after-tax profit of $NZ109 million ($97.7 million).

Suncorp says it will sell its Australian life insurance business to TAL Dai-ichi for about $725 million.

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