Suncorp has promised its insurance business will deliver an underlying margin improvement of at least 3% over the next two years, backed by annual savings of $235 million.

On Friday the group provided a strategy update around its “Building Blocks” program, which incorporates five key projects aimed at unlocking efficiency gains within the insurance business.

Suncorp expects the restructuring to deliver $235 million in annual benefits by June 2013, with project costs of $120 million absorbed by cuts in discretional spending and other initiatives.

CEO Patrick Snowball says the general insurance business – which is split into commercial and personal lines divisions – will benefit from a simplified structure and systems. The restructure includes a single pricing and claims system across the personal and commercial insurance divisions.

“Our move to a functional model and a single view of pricing and claims will ensure the general insurance business leverages scale advantages across all of its brands and unlocks the potential in functional capability that has not been realised to date,” Mr Snowball told a media briefing.

Suncorp will retain its existing brands under its “one team, many brands” strategy, with Mr Snowball – a veteran of the volatile UK market – saying he’s impressed by the strong brand loyalty within the local market.

“One thing I have learned in Australia is the very strong affiliation of different consumer groups to different brands,” he said. “It’s very different to the UK. Our brands are extremely valuable and respected.”

Suncorp Commercial Insurance CEO Anthony Day told insuranceNEWS.com.au the insurer has increased premiums despite the pressures of a competitive market, “in line with the recent Aon survey that talked about overall rate increases of 6.4% over the past 12 months”.

Personal Insurance CEO Mark Milliner expects a unitary pricing model to “minimise conflicts between brands, which will help lift yield on new and renewal policies”.

Vero NZ CEO Roger Bell said his division plans to double its sustainable net profit by June 2013.

“We can achieve this target organically by extending our specialist focused business model and integrated portfolio management system, as well as significantly growing our business through the relationship with ANZ National,” he said.

Mr Snowball refused to be drawn on overall job losses, saying final retrenchment plans are yet to be finalised.