SYDNEY, AAP – Insurer Suncorp has improved full-year cash earnings by 42 per cent, and delighted shareholders with a special dividend and on-market buyback.
The company behind brands including AAMI and GIO on Monday said gains at its insurance and banking operations helped earnings climb to $1.06 billion.
Its insurance division recorded its best improvement since 2013, with the value of premiums sold increasing by 5.5 per cent.
The banking business was boosted by home lending improving in the second-half by 0.8 per cent.
Moody’s Investors Service vice president Frank Mirenzi said Suncorp’s banking profit was also helped by the lender releasing money previously set aside for bad debts during the pandemic.
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Australia’s major banks are tipped to act similarly this earnings season after they avoided incurring the level of bad debts feared earlier.
Suncorp investors will receive a final dividend of 40 cents per share and a special dividend of eight cents per share. Both will be fully franked.
The insurer will also take up to $250 million worth of shares out of the market through a buyback.
The regularity of extreme weather continues to be a worry for insurers.
Costs from claims caused by weather and the natural environment amounted to $1.01 billion. This was $60 million more than Suncorp had allowed for.
Shares in the insurer, which also owns insurance brands including Apia, Bingle, Shannons and Terri Scheer, surged by 6.49 per cent to $12.63 by 1145 AEST, after earlier hitting a high of $12.71.