Suncorp’s full-year net profit grew 52.3% to $1.82 billion, driven by lower than expected natural hazard costs and one-off gains from the sale of its Australian bank and New Zealand life businesses.

Gross written premium increased 6.3% to $15.01 billion and the insurance service result – a measure of underwriting performance – gained 54.2% to $1.55 billion.

Natural hazard costs increased to $1.355 billion from $1.235 billion in 2023-24, but they were still about $205 million below the insurer’s $1.56 billion allowance for the year to June 30. 

A rise in net investment return to $766 million from $661 million also lifted earnings.

CEO Steve Johnston says the result “demonstrates the strength and resilience of our business built over the past five years … We recognise the cost pressures businesses and households across Australia and New Zealand continue to experience, including the impact of premium increases in recent years.

“Pleasingly, the increases in customer premiums continue to moderate as supply chain inflation eases and reinsurance markets stabilise.”

By division, consumer insurance net profit rose to $686 million from $424 million; commercial and personal injury grew to $422 million from $381 million; and New Zealand general insurance was up to $NZ398 million ($362 million) from $NZ211 million ($192 million).

In consumer, GWP increased 8.2% to $8.1 billion as motor grew 7.4% to $4.84 billion and home gained 9.4% to $3.3 billion to price in a higher natural hazard allowance.

Suncorp says motor average written premium increases moderated along with claims inflation, while home AWP reflected working claims inflation pressures and a higher hazards allowance.

Consumer margins have returned to target ranges, with the underlying insurance trading ratio increasing to 9.6% from 8.1%. The improvement was supported by the earn-through of targeted pricing changes to allow for the higher natural perils allowance and working claims inflation in recent years, partly offset by elevated fire and water claims in home.

Mr Johnston said: “The word I would use is discipline. What we know is that if you get behind on your pricing, it takes a long time to catch up, and so through the course of Q2 we did see the inevitable moderation of inflationary factors, particularly in motor insurance.”

CFO Jeremy Robson says the insurer expects margins in home to continue improving and motor to moderate, both towards their targets.

Suncorp started this financial year as a pureplay general insurer, having exited life and other non-core businesses.

It has looked at acquisition opportunities, Mr Johnston says, but they “weren’t appropriate for us. But having seen those acquisitions play out, knowing where they’re going to be playing out, I think our process now is to …  build our firepower and direct our firepower into those areas where those assets are being managed within the portfolios that they’re moving to.”