Suncorp tipping rise in premiums
HOME and car insurance premiums are expected to rise by up to five per cent next year because the cost of repairs are higher, Suncorp says.
The insurance giant issued the warning yesterday after unveiling a full-year net profit that missed market expectations.
Suncorp chief executive Michael Cameron said home and motor insurance had returned to positive growth in 2016-17 with price increases three to five per cent.
He expects they will rise by another three to five per cent in 2017-18. “The costs of repairing motor vehicles and costs of repairing homes are increasing,” Mr Cameron said.
He said motor repairs were more complicated than they were in the past. “Years ago, when you broke your bumper bar it was an easy fix,” he said.
“These days it’s quite a big job with expensive parts so there is a cost inflation there and across the industry we are seeing price increases reflect those costs.”
The lender and insurer unveiled a 3.6 per cent rise in net profit to $1.075 billion for the 12 months to June 30, but that was down from Deutsche Bank’s forecast of a five per cent lift.
Shares in Suncorp were down 93¢, or 6.41 per cent, at $13.57 at yesterday’s close. OptionsXpress market analyst Ben Le Brun said Suncorp’s shares had fallen mostly because the profit was about four per cent below market consensus.