Lockdown lifts Suncorp

Lower motor accident claims improve insurance giant’s bottom line

SUNCORP Group has benefited from a drop in motor accident claims due to COVID-19, helping it offset the negative impact of the pandemic on other parts of its business.

The Queensland insurance and banking giant booked a $140m gain from lower motor insurance claims as fewer people drove during the height of the pandemic earlier this year. That helped Suncorp offset a $85m provision made for additional claims and other costs to cover COVID-related rent loss and business interruption claims.

Suncorp on Friday posted a full year group net profit of $913m, including a $285m after-tax profit from the sale of its Capital SMART and ACM Parts businesses and a $89m non-cash impairment charge relating to its banking platform.

Cash earnings of $749m were down 32.8 per cent as a result of reduced profit from insurance and banking and wealth divisions but were better than the market expected

“It’s been a challenging 12 months for Suncorp and customers,” Suncorp chief executive Steve Johnston said.

“First a season of extreme weather conditions, and then the global COVID-19 pandemic which will result in long-lasting economic disruption and fundamentally change the way we live.”

But he said Suncorp entered the COVID-19 crisis in a solid position and responded quickly. “We have maintained the financial and operational strength of our business,” he said.

He said COVID had accelerated the move online by customers, with a 25 per cent surge in online insurance sales. between May and June.

He said 31,000 motor and home insurance customers had received three-month premium waivers or discounts as at the end of June while 9800 customer loans were under temporary repayment deferral arrangements.

“The operating environment remains highly uncertain as a result of the COVID19

pandemic and the associated economic impacts,” Mr Johnston said.

He said Suncorp was prepared for a sharp deterioration in economic conditions before the economy was expected to begin recovery from 2021.

The company announced a fully franked final ordinary dividend of 10c a share, down from last year’s 44c final dividend.