Financial analysts say Suncorp’s decision to part ways with CEO Michael Cameron reflects market concerns that the company has failed to live up to its potential or to clearly articulate its strategy under his leadership.

Clime Asset Management Large Companies Portfolio Manager David Walker says issues at the group include doubts around the Marketplace strategy, which aims to improve customer access to a wide range of Suncorp products and services.

“The Marketplace strategy never really resonated with investors,” he told insuranceNEWS.com.au. “There was confusion about costs and a lot of confusion about guidance.

“Plus there is longer-term disillusionment with Suncorp for consistently missing its own natural hazard allowances. It is a company with a bit of a credibility gap with investors.”

Morningstar analyst David Ellis says Suncorp “surprised no-one” with yesterday’s announcement that Mr Cameron was stepping down.

Despite Mr Cameron introducing strong management accountability standards and a simplified business structure, “he failed to deliver acceptable earnings growth”, Mr Ellis said.

“Cash earnings fell 8% in fiscal 2016, increased 3.6% in fiscal 2017, declined 4% in fiscal 2018 and are expected to decline another 4% in fiscal 2019 – not an inspiring track record.”

JP Morgan suggests Mr Cameron has had mixed fortunes over the past three years after inheriting a tough situation from predecessor Patrick Snowball.

Mr Cameron’s mandate included improving volumes, with his resulting Marketplace strategy evolving considerably in terms of cost and nature, analysts led by Siddharth Parameswaran say in a report.

“It originally was supposed to cost nothing and had strong roots in physical stores [but] has now evolved into a program costing at least $140 million and has moved towards a digital offering,” the analysts say.

“Arguably Michael has tackled some of the tough issues surrounding the believability of Suncorp’s underlying margins, for example addressing large loss allowances and reinsurance. However, the volume trends have got worse.”

Mr Cameron oversaw the sale of the Australian life insurance business to TAL Dai-ichi for $725 million, while recently there has been speculation the company may be considering spinning off the banking division. Some media reports suggest differences over plans for the bank may have contributed to Mr Cameron’s departure.

Chairman Christine McLoughlin, who moved into the role last year after serving on the board since February 2015, said yesterday “now is the right time” for change.

Well-regarded group CFO Steve Johnston, who has been with the company for 13 years, has moved into the top job on an acting basis while the board undertakes a search that will include internal and external candidates.

Mr Ellis says it’s likely Mr Johnston will be appointed on a permanent basis as soon as the search process is completed.

Some analysts suggest that whoever is appointed should have strong experience in insurance, given the complex and specialist nature of the sector. Mr Cameron, who joined Suncorp from property group GPT, had limited insurance operational experience.

“You have to be mindful of where the bulk of the profits are coming from, and it is the general insurance business, not the bank,” Bell Potter Securities analyst TS Lim said.

Mr Cameron will continue at Suncorp in an advisory role until the annual results are handed down on August 7.