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Liberty Specialty Markets

Suncorp’s Marketplace CEO exits as strategy revamped

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Suncorp Marketplace CEO Pip Marlow will leave the business as the group shifts its strategy following the departure earlier this year of Michael Cameron.

Lisa Harrison, who has been responsible for delivering the business improvement plan, will take on the new role of Chief Customer and Digital Officer.

Ms Marlow, who was MD of Microsoft Australia when she was recruited by Suncorp in December 2016, will leave the group at the end of the month.

Suncorp’s contact centres, stores and intermediary distribution teams, which currently sit in the Customer Marketplace function, will be moved to the insurance and banking divisions.

Acting CEO Steve Johnston acknowledged today that “the more aspirational elements of the Marketplace component of the strategy, and the associated third-party revenues that were assumed to flow from those activities, have been too ambitious relative to where our business is at and the funds we have available to invest”.

Suncorp’s focus will now be on delivering value from digital assets built over the past two years, removing duplication and clarifying accountabilities, the company says.

“The Marketplace is still a component of our strategy but our core strategy is around digitising this business,” Mr Johnston told reporters.

The board is still completing an executive search for a permanent replacement for Mr Cameron, with no additional information provided as the company released its annual results today.

Suncorp’s net profit fell to $175 million for the year ended June 30, down from $1.06 billion a year earlier, including a $910 million non-cash loss on the sale of the life business.

Australian insurance profit fell to $588 million from $681 million after higher natural hazard costs and weaker investment market returns.

Gross written premium (GWP) increased 1.3% to $8.25 billion, with price gains in commercial insurance partly offsetting decisions to exit poorer risks.

Suncorp New Zealand’s profit surged 76.4% to a record $NZ261 million ($252 million), including life and general insurance, as GWP rose 8.4% and the country experienced an unusually low claims year for natural hazards following benign weather.

New Zealand CEO Paul Smeaton says he expects the strong performance of the New Zealand business to continue into the current financial year.

“However, our expectation is that growth will return to lower single-digit levels and claims will return to more normalised levels,” he said.

Suncorp reported regulatory project costs of $95 million and made a customer remediation provision of $60 million in the wake of the Hayne royal commission. Projects costs are expected to reach $155 million this year before falling to $100 million in the next 12 months – still higher than before the royal commission.

Mr Johnston says the Hayne inquiry forced financial services companies to review their business from top to bottom, and Suncorp is embracing the regulatory changes.

“To avoid or defer action, or to categorise these costs as a burden or an imposition, is to reinforce the very reason the industry got itself into this situation,” he said.

The group plans to return more than $1 billion of capital to shareholders following the sale of the life business. It also plans to complete a strategic review of its Smart crash repair business in the current half.