Suncorp plans to introduce a range of products under a Vero specialty lines banner, with high-hazard commercial property the first area to be targeted.

Commercial and personal injury chief executive Michael Miller says specialty lines will look at creating smaller products “closely adjacent” to the current offering, backed by reinsurance to reduce volatility.

“Our ambition is to launch a series of these products over the next three years as we prove out performance,” he told a Suncorp investor briefing in Sydney yesterday. 

High-hazard property will focus on businesses with more complex risk profiles, rather than those exposed to higher natural hazard losses, he said.

“These are risks that we write today but decline over 70% of opportunities due to the time it takes to underwrite these risks adequately,” he said.

Suncorp commercial comprises $1.5 billion in gross written premium from tailored lines and $500 million from a platform segment, which includes a small direct SME business that uses the AAMI and GIO brands.

“This represents a future opportunity with strong brands, and will become more attractive to consumers as technology evolves,” Mr Miller said. “In the short to medium term, however, the focus is very clearly on connectivity to broker platforms.”

The platform business targets small businesses and simpler risks, with automated underwriting and instant decisions. 

“Large broker groups are building platforms for their members to transact through for efficiency and also risk reasons,” he said. “We believe this trend will continue over time and the breadth of products that will be connected will increase with technology improvements.”

About 95% of the commercial business is intermediated and Mr Miller said broker relations are “absolutely key”.

The insurer continues to see demand for specialised skills and products, and Vero specialty lines is a good example of where the tailored part of the business can be expanded, he said.

Suncorp aims to rank second in commercial market share by 2030.

“We believe that our natural market share is around 12%-13%, but our longer-term ambition is to grow more than that,” Mr Miller said.

“That said, margin and return on equity targets are the most important measures, and therefore disciplined underwriting is paramount as we adapt to market conditions that may occur.”