Suncorp’s earnings increased 3.6% to $1.08 billion last financial year after a jump in profit from the Australian insurance division due to pricing improvements and lower claims costs.

Local general insurance net profit grew 40.6% to $689 million, offsetting sharp declines in New Zealand due to natural catastrophes, and weaker results from life insurance and banking and wealth.

The company will invest an extra $100 million this financial year on its group-wide marketplace strategy that links its offerings. It has increased its total dividend to 73 cents per share from 68 cents in the previous year.

“The final dividend reflects momentum in growth driven by Suncorp’s refined strategy and focus on the customer, plus evidence of a hardening insurance market,” CEO Michael Cameron said.

Australian gross written premium (GWP) increased 3.9% to $8.11 billion following strong growth in NSW compulsory third party, premium increases in home and motor, and entry into the SA compulsory third party scheme.

CFO Steve Johnston says commercial GWP contracted 2.2% as the company prioritised margin over growth, but there have been strong pricing improvements in all commercial lines in recent months.

“The June renewals period, when 17% of our policies renew, has exceeded our expectations, with rate increases of greater than 10% in the top-end commercial property market,” he told a briefing.

Suncorp says the natural hazards allowance next year will be $692 million across Australia and New Zealand, up from $620 million, reflecting the increased frequency and severity of natural hazards, portfolio growth and adjusted reinsurance cover terms.

In New Zealand, general and life insurance net profit dropped to $NZ87 million ($81.1 million) from $NZ200 million ($186.5 million) due to the Kaikoura earthquake, cyclones Debbie and Cook and additional Canterbury quake claims.

Industry-wide motor claims inflation also contributed to the slide.

General insurance profit, excluding natural hazards and other one-offs, was $NZ47 million ($43.8 million).

GWP gained 6.3% to $NZ1.42 billion ($1.33 billion), while net incurred claims increased 20.1% to $NZ735 million ($685.5 million).

“The general insurance business continued to outperform the New Zealand market in relation to GWP growth,” New Zealand CEO Paul Mr Smeaton said.

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