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Berkshire Hathaway Specialty Insurance

Suncorp Acting CEO rejects 'confusing' retail narrative

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Suncorp Acting CEO Steve Johnston says the company has confused investors by trying to be the “Amazon of financial services” and it’s time to refocus on its insurance and banking identity.

Over the past three years or so the group had lost a little bit of that core focus as an organisation and had highlighted a more retail-centric narrative, he told the Suncorp Synergy event in Melbourne yesterday.

“We have had a very aspirational narrative. We wanted to be the Amazon of financial services and we wanted to be a supermarket for financial services products,” Mr Johnston said.

“When I talked to a lot of investors they didn’t quite understand what we were. Were we a bank, were we an insurance company, were we a technology company, were we a platform business.”

Mr Johnston joined Suncorp in 2006 and has served as CFO since 2013. He took over as Acting CEO in late May from Michael Cameron who departed the company as the board said it was the right time for change.

Mr Cameron, who took the helm in October 2015, had driven the contentious Marketplace strategy, which had promoted the breadth of financial products that could be accessed through Suncorp and third-party providers.

His departure came amid concerns that the insurance division was underperforming relative to rival IAG, while there was also some speculation about a possible merger of the bank with another regional player.

The selection process for a new CEO is still underway, but Mr Johnston said he had accepted the Acting CEO position on the understanding that the business would not stand still and decisions could be made to drive the company forward. Suncorp is due to deliver its annual earnings results on Wednesday next week.

“We are an insurance company and a bank. That is what we are going to get back to, that is where we are refocusing the organisation,” he told the Synergy event, which is attended by intermediaries.

“You will hear a lot about that in the coming weeks as we go through the result. Doing things core to our business and doing them well.”

Mr Johnston suggested that market and analyst speculation the company was looking to spin-off its bank was not well-founded.

“The bank is core to our group, strategically important. It is a very strong bank and it is going to get stronger,” he said.

Mr Johnston and Insurance CEO Gary Dransfield are considered the top internal candidates to take on the CEO role, while the board is also looking more widely. Analysts have said the new person should have insurance expertise.

Mr Dransfield confirmed to insuranceNEWS.com.au that he had expressed interest in the role, but declined to comment further while the board completes its selection process.

In the meantime, he says the Suncorp management team remains focused on strengthening the company’s performance.

“While you clearly have some uncertainty while there is not a permanent CEO in place, we are all very clear that we want to improve and maintain momentum in the organisation around banking and insurance,” he said.