Suncorp has announced its 2023 half year financial results with continued strong top-line growth across the Group, improved underlying margins and positive investment returns.
Key points
- Group net profit after tax up 44.3% to $560 million, cash earnings up 62.9% to $588 million
- Interim fully franked ordinary dividend of 33 cents per share, representing a payout ratio of 71% of cash earnings
- Insurance Australia gross written premium of $4.8 billion, up 9.0%, driven by the pricing response to inflation and increased natural hazard and reinsurance costs
- Suncorp New Zealand gross written premium of NZ$1.2 billion, up 12.2% benefitting from price momentum
- General Insurance underlying insurance trading ratio of 10.0%, up from 8.0% (excluding COVID-19 impacts)
Group net profit after tax of $560 million, was up by 44.3%, while cash earnings increased 62.9% to $588 million. The Group has reaffirmed its FY23 targets.
The Group reported gross written premium (GWP) growth of 9.0%, excluding Emergency Services Levies (ESL) and portfolio exits, in its Australian general insurance business, and 12.2% in New Zealand. The Group's underlying Insurance Trading Ratio (ITR) increased from 8.0% (excluding COVID-19 impacts) in 1H22 to 10.0% in 1H23. The improved ratio was supported by strong top-line growth, improving expense ratios and an increase in investment yields but impacted by increased natural hazards, reinsurance costs and claims inflation.
While the underlying business demonstrated strong momentum, the Group's results were impacted by elevated natural hazard activity. The prevailing La Niña weather pattern across Australia and New Zealand led to eight separate weather events and around 53,000 natural hazard claims for 1H23. This resulted in the Group exceeding its natural hazard allowance by $99 million. The Group’s full year natural hazard allowance is $1,160 million and the Group retains strong protection through its comprehensive reinsurance program.
The sale of Suncorp Bank to ANZ Banking Group remains on track and is expected to complete in the second half of calendar year 2023, subject to approvals.
Suncorp Group CEO Steve Johnston said the Group had delivered a strong set of results for the half despite ongoing economy-wide inflationary pressures and the impacts of eight natural hazard events, largely due to the La Niña climate pattern.
Common Equity Tier 1 held at Group of $290 million, with increased levels of capital held across the business units
FY23 financial targets reaffirmed
Sale of Suncorp Bank on track, subject to regulatory and government approvals