Suncorp is hoping a new strategy and restructure will turn the tide of almost 125,000 of its insurance and banking customers a month leaving the company.
Suncorp announced plans at an investor's strategy day 25 May and outlined plans to encourage customers to interact more with the company – including investing in physical Suncorp shops, predominantly for banking. The idea is that the plans would increase retention and spending. You can download the PowerPoint presentation here and the transcript of the presentation.
The company announced a $55 million expense this financial year as part of a new restructure that has resulted in many redundancies, that it hoped would generate $80 million in ongoing, annual savings.
Suncorp CEO Michael Cameron spoke of an “amazing level of churn across the industry: and that the company typically lost 125,000 customers a month: "Now that's 1.5 million customers leave us each year and that's because we're continuing to compete on price,” he said. “Competing just on price is not sustainable.”
Suncorp also outlined a technology platform that allows customers better digital interaction.
Referring to motor claims Cameron said: "For motor, the number of vehicles that are processed by SMART have increased to 3225 a week, and the proportion of cars going through SMART have increased from 36% to 40%. We've got a lot more resources and, to further increase our capacity, we've opened more SMART centres this year and we've got another four to open before December.
According to an article in the Courier-Mail Suncorp’s new platform approach ‘has ignited market concerns the company is reheating a failed all-finanz cross-selling idea that the company botched in the 2000s’.
Suncorp faces other challenges with Morgan Stanley analysts last week warning core loss ratios in the insurance arm were worsening. “This means Suncorp has even more work to do to fix the negative jaws of pricing (Suncorp discounting) and rising claims inflation costs,” Morgan Stanley analysts said.
Half-year profits at Suncorp hit $530 million, down from $631 million.