Rationalisation of commercial insurance pricing will take place soon, according to Suncorp.

Commercial Insurance CEO Anthony Day says although competitors are combating growth issues through “aggressive price reductions”, he does not see this as a viable long-term strategy.

“This is why we will continue to focus on margin over growth,” he told insuranceNEWS.com.au. “We believe the market will stabilise, because current conditions are not sustainable.”

Mr Day believes favourable conditions in the Australian market are attracting overseas players, but his division remains in a strong position.

“Suncorp Commercial Insurance’s fundamentals, such as good customer metrics, claims experience and underwriting discipline, put us in the right position to grow,” he said.

“While we will continue to focus on organic growth, we will seek inorganic opportunities that add to our product mix or enhance our capabilities for the benefit of our customer base, with the primary goal of improved returns to shareholders.”

Mr Day also believes disability reform will provide new opportunities for Suncorp, the largest personal injury insurer in Australia. Mr Day has also been in the forefront of calls for the return of state-controlled statutory insurance classes to the private sector.

The commercial division contributed to strong group results announced earlier this month.

Suncorp reported net income of $1.13 billion for the year to June 30, up 55.2% on the previous year despite natural hazard claims reaching $1.07 billion.