Suncorp-Metway says it is on track to top last year’s full-year profit result by 10% after announcing a first-half profit rise of 16% to $527 million. General insurance kicked in $383 million.

The result beats analysts’ forecasts by up to $50 million. CEO John Mulcahy says higher lending and reduced claims have pushed first-half profits higher despite increased competition across the insurance, banking and wealth management industries.

Australia’s third-largest (for now) car and home insurer performed strongly across all divisions.

Bank profit contribution before tax rose 13.3% to $289 million, up from $255 million in the first half of 2006.

Profits from Suncorp’s wealth management arm were up 26% to $54 million, but increased competition did erode the company’s policy sales, which dropped 1.2% to $1.28 billion.