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Suncorp shares have jumped to their highest level since 2007 after the insurer sold its life insurance business and showed a strong turnaround in second-half performance.

Queensland-based Suncorp reported a drop in full-year profit of 1.5 per cent to $1.059 billion, driven by a rise in operating expenses, regulatory costs and claims.

The insurance giant’s revenue was down 11.2 per cent to $15.452 billion for the year ended June 30 and Suncorp also announced it will sell its life insurance business to TAL Dai-ichi Life for $725 million.

Suncorp shares lifted 71 cents, or 4.7 per cent, to $15.70 on Thursday after the company showed the improvement in second-half performance that it had promised in February due to investments in business improvements.

Net profit in the second half of the year ended June 30, 2018 was $607 million, up from $452 million in the preceeding six months.

Suncorp’s general insurance business recorded a slip in post-tax profit as claims increased but an improvement in profits from its life insurance business helped the total Australian insurance business improve, lifting full-year profit to $739 million from $723 million a year ago.

Shareholders received a bonus special dividend of eight cents a share, fully franked, on top of a final dividend of 40 cents per share, also fully franked.

Looking ahead, Suncorp said it expects to grow its Australian insurance earnings with an increase in premiums as a result of natural hazards costs and inflation.

The group set a target of three to five per cent top-line growth for 2018/19.

SUNCORP TURNS ITS YEAR AROUND:

* Net profit for 2017/18 $1.059 billion, down 1.5 per cent

* Revenue $15.452 billion, down 11.2 per cent

* Final dividend 40 cents a share, fully franked

* Special dividend eight cents a share, fully franked