Suncorp New Zealand experiences strong underlying growth despite weather event costs

8 February 2022

Suncorp New Zealand has today announced a profit after tax (PAT) of NZ$84 million for the six months to 31 December 2021. Parent company Suncorp Group Limited announced a PAT of A$388m. 

CEO Jimmy Higgins says the underlying performance of the business has continued to show growth and improvement in operating efficiency. This was despite profit for the half year being down 34.9%, due to adverse investment market impacts and increased frequency and severity of weather events.  

“New Zealand experienced a number of flood and storm events in the second half of 2021, including the severe storm that affected Westport and all of central New Zealand in July, and flooding in west Auckland in August,” he says. 

Higgins says three weather events in July, August and September alone resulted in $52 million of claims, and total weather-related claims were $72 million, up 41.2% on the prior corresponding period. He also refers to the fact that, like other businesses, Suncorp New Zealand faced adverse economic conditions. 

“We’re experiencing rising input costs to both premiums and claims as well as disruptions in global market conditions that are significantly affecting investment returns. But we continue to focus on supporting New Zealanders and Kiwi businesses through difficult times.” 

“In the past six months we’ve provided close to $1m in support to customers who have suffered financial hardship,” he says. “We’ve been there supporting our customers following major weather events and also donated $150,000 to community organisations in Auckland and Northland to support communities affected by the Delta lockdown.”  

Higgins says that growth and delivering customer value remains a strategic focus for the business, despite potential economic headwinds. 

“We’re seeing good growth across all our lines of business because our customers know we will be there to support them now and in the long-term,” he says. It was great to see our efforts being recognised at the recent ANZIIF awards where we received five awards including Insurance Leaders of the Year, Excellence in Workplace Diversity & Inclusion and for Asteron Life, Life Insurance Company of the Year.”  

Suncorp New Zealand CEO Jimmy Higgins

Natural hazards impact general insurance result

Suncorp New Zealand’s general insurance business, which includes Vero Insurance and AA Insurance (a joint venture between Vero and the New Zealand Automobile Association), delivered an NPAT of $78 million, down 22% on the prior period.  

Both intermediated and direct channels showed strong customer growth, with revenue growing 14%. 

Net incurred claims of $495 million were up 17.6% on the pcp, and repair costs in our working claims also increased on the prior year. 

Higgins says that sustainability and natural hazard resilience remained a focus for Suncorp, but that collective thinking and action was needed to build resilient communities in the face of increasing weather events. 

“Insurance can help our customers pick up the pieces after a storm or a flood, but it’s time for New Zealanders to come together to ensure that we are taking steps to address both our own contribution to global warming, and the possible impact on our communities.” 

Life result impacted by investment returns

The New Zealand life insurance business delivered a profit after tax of $6 million, down 79.3% on the prior corresponding period impacted significantly by lower investment returns and higher claims experience compared with the prior period. 

“Investment returns have had a major impact on the life insurance business in the last few months, largely driven by rising interest rates,” says Higgins. “But the business remains very stable with good profitability and retention.” 

“Life insurance is a long-term product and growth, profit and retention need to be looked at over a longer period compared to General Insurance. Asteron Life has sustained its sound underlying performance and is in a great position to continue improving its current offering in the market,” says Higgins. 

Building sustainability into our business

Suncorp New Zealand continues to demonstrate its commitments to being a more inclusive and sustainable company. These commitments were recognised in November 2021, with the company winning Excellence in Diversity & Inclusion at the NZ Insurance Industry Awards. It also won the award in 2019 (the awards were not held in 2020) and continues to demonstrate its journey to being a more inclusive and sustainable insurer. 

In November 2021, Vero extended its Drive insurance pilot programme for a further 12 months. The partnership with Good Shepherd NZ is trialling an affordable car insurance product to support Kiwis on limited incomes or who are excluded from the traditional car insurance market. 

In October, it announced its intention to phase gender ratings out of its pricing for car insurance, as a step towards providing more inclusive products and services to gender diverse New Zealanders. 

In HY22, Suncorp progressed work on its Natural Hazard Resilience Programme through its connection with three non-profit organisations supporting flood and social resilience work in Whakatāne.  

Asteron Life was recognised as 2021 Life Insurer of the Year, for providing outstanding service to customers, including those experiencing vulnerability and its work to support customers and advisers through Covid-19. This included providing more than $3.8 million in premium waivers and discounts to customers suffering financial hardship.  

Media enquiries: Kimberley Cameron +64 27 208 1268