Suncorp underlying earnings rise 5% on premium growth

Suncorp Group Ltd reported a 5% rise in underlying earnings for the first half of its fiscal year, driven by growth in premium revenue across its Australian insurance operations.

The Australian insurer said underwriting profits increased as demand for home and car insurance remained robust, offsetting higher claims costs. Suncorp’s shares rose 1.5% in early trading on the Australian Securities Exchange following the announcement.

Underlying net profit after tax for the six months ended December 31 climbed to A$650 million ($435 million), up from A$619 million in the same period a year earlier. The company attributed the gain to strong premium growth in its core general insurance business, which includes home, car, and business insurance policies.

Suncorp’s managing director, Steve Johnston, highlighted disciplined pricing and underwriting strategies as key factors in maintaining profitability despite inflationary pressures on claims costs. The insurer also noted a 4% increase in gross written premiums, reflecting sustained customer demand.

Analysts had expected underlying earnings to rise modestly, with consensus estimates pointing to a gain of around 4-6% for the period. Suncorp’s performance aligns with broader trends in the Australian insurance sector, where insurers have benefited from post-pandemic economic activity and reduced claims frequency in some segments.

The company reaffirmed its full-year guidance, maintaining its target of A$1.3 billion to A$1.4 billion in underlying net profit after tax for the 2024 fiscal year.