Insurance giant Suncorp New Zealand’s after-tax profits slipped 23% to $165 million in its most recent financial year, despite a huge increase in premiums paid by Kiwi home, car and business owners.
The insurer’s profit drop for the 12 months to the end of June was the result of high inflation, and multiple extreme weather events, the company told investors on the ASX Australian sharemarket.
The company, which owns Vero and has a majority stake in AA Insurance, signaled further premium rises were on the way for policyholders.
Chief executive Jimmy Higgins said: “Multiple weather events experienced during the year resulted in the highest volume of claims since 2018; and customers experienced longer waiting times for repairs to their homes and vehicles because of the delay in getting materials.”
READMORE:
* Bigger claims drag down insurer IAG’s New Zealand profit
* Insurance premiums likely to continue to rise 3% to 5%, analyst says
* State, AMI and NZI stay silent on whether they will follow Tower’ $7.2 million rebate to car insurance customers
The profit was also hit by investment results in a highly volatile investment market, increased sickness among employees, and the tight labor market, the company said.
In a presentation to investors, Suncorp said it has posted a 14.1% increase in the premiums paid by its policyholders.
The gross written premiums it collected in New Zealand increased from $1.87 billion in the previous financial year to $2.13b.
Abigail Dougherty/Stuff
Kumeu Gym 24/7 owner Cassandra Keegan was unable to access their business yesterday because flooding last year submerged the gym.
That included the gross written premiums paid by vehicle owners rising from $460m to $527m, and premiums paid by homeowners rising from $616m to $708m.
Suncorp said the rise in its premium income was the result of both winning new customers, but also price rises on its policies.
Higgins said natural hazard weather events were becoming more frequent and expensive, which had resulted in significant increases to its reinsurance costs.
Net claims, after reinsurance recoveries, were $1.013b, with $107m of that coming from claims related to natural hazards like flooding and hail.
In the previous financial year, total net claims were $864m, with $84m from natural hazards.
The insurer received 9,542 weather-related claims in New Zealand in the 12 months to the end of June.
Higgins said: “Premiums will also be impacted by the pressure on materials and labor costs in repairing homes and cars, as well as the increases in Toka Tū Ake EQC levies following the increased EQC cap changes in October later this year.”
The company had been working on using technology to cut costs.
Suncorp NZ also continued to make ‘remediation’ payments to customers it overcharged for insurance by failing to give the multi-policy discounts.
It had also been working on improving the diversity of its workforce.
It still had a gender pay gap of 13.3%, but now had half of its senior leadership positions filled by women.