Suncorp confident on targets despite La Nina, inflation

Suncorp says it remains confident about achieving its targets despite challenges posed by inflation and possible impacts from a third consecutive La Nina weather pattern.

“Our strategic investments have so far allowed us to stand apart from the elevated levels of inflation experienced by some of our competitors,” CEO Steve Johnston told the annual general meeting today.

“And our recently renewed reinsurance program, supported by a natural hazard allowance which has increased by 68% over the past five years, holds us in good stead for the weather season ahead.”

Mr Johnston says the business is “executing well” and is accelerating opportunities to leverage its scale and generate further efficiencies.

“Alongside a comprehensive pricing response, we aim to meet the challenge of inflation and protect margins and returns while continuing to deliver the valuable products our customers have come to expect,” he said.

Suncorp’s underlying insurance trading ratio ended the past financial year at 9.9%, just below the target of 10-12% for the current year.

The past La Nina weather year led to 35 separate natural hazard events across Australia and New Zealand, resulting in total natural hazard costs to Suncorp of $1.081 billion.

The group’s net profit after tax was down 34.1% to $681 million, with cash earnings down 36.7% to $673 million, reflecting the elevated natural hazard costs, purchases of additional reinsurance covers and mark-to-market losses on the investment portfolio.

Mr Johnston said the headline results masked progress the company is making to improve the business, which is reflected in record growth, higher margins and improved customer metrics.

Chairman Christine McLoughlin also told the meeting that the board and management team had dedicated considerable attention to the increasingly important issue of cyber risk and security.

“As customers accelerate their use of digital channels, and as we continue to digitise our business, our ongoing investment in data privacy and security is absolutely critical,” she said.

“We continue to enhance our technology and capabilities to reduce the damage from cyber-attacks and protect our customers, people and business.”

The annual general meeting was held in a hybrid format with people able to attend online or in person in Brisbane. The meeting was moved from yesterday to this afternoon as a result of the National Day of Mourning for Queen Elizabeth II.