SYDNEY, AAP – Financial services group Suncorp has posted a near 21 per cent fall in first-half net profit in the wake of higher insurance claims from natural disasters and lower returns on its investments.
But the Queensland-based entity says its underlying business is strong, putting it in a “good” position in the second half of 2021/22.
Net profit for the half-year ended December 31 was $388 million, down from $490 million in the previous corresponding period.
Cash earnings fell 29.1 per cent to $361 million as Suncorp reacted to 19 weather events and more than 50,000 natural hazard claims in the half-year, including floods and fires.
Natural hazard claims costs jumped to $695 million – $205 million more than expected.
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“While we have been challenged by the La Nina climate pattern and the operational impacts of COVID-19, we continue to deliver against our strategic priorities and have good momentum as we move into the second half of FY22,” CEO Steven Johnston said in a statement.
“As we approach the federal election, I am pleased we have already seen the issue of disaster resilience receive more consideration.
“While we welcome this start, more is needed to make Australia safer against extreme weather events.”
Mr Johnston also warned certain taxes and charges built into insurance premiums were adding more than 40 per cent to the cost of some home insurance products.
“This unfairly impacts those in higher-risk locations and it needs to be addressed as part of a wider reform of the tax system,” he said.
Suncorp declared an interim dividend of 23 cents per share, down from 26 cents in the previous corresponding half.
Suncorp’s businesses comprise insurance, banking and wealth management.