Suncorp collects 19.6% more after hiking house and car premiums
Australian insurer Suncorp’s New Zealand businesses collected $231 million more in premiums from policyholders in the last six months of 2023 than a year earlier.
The insurer, which owns the Vero brand and has a majority stake in AA Insurance, has hiked premiums like larger rival IAG as a result of high inflation in claims costs and reinsurance costs.
Suncorp reported its six-month results to investors on the Australian ASX sharemarket, revealing a 19.6% rise in premiums in the last six months of 2023 compared to the same period in 2023.
By contrast its net claims of $620m were up only 6.9%, and the insurer reported that the period had been marked by fewer claims for natural hazards like flooding than it had expected. It reported a $94m after-tax profit, up 3.3%.
Suncorp Group chief executive Steve Johnston said there had been strong premium growth in the New Zealand business, partly driven by its insurance brands winning customers from rivals.
Earlier this month, Suncorp’s largest rival IAG, which owns the State, AMI and NZI brands, said it had lost customers after having increased its premiums before rivals.
The insurer had brought in “targeted” price increases in response to higher reinsurance costs, inflation, and an elevated level of natural hazards.
Insurers such as Suncorp buy reinsurance from global companies to help them pay claims in massive natural disasters such as earthquakes, which otherwise could threaten their solvency.
In particular, there had been a big increase in the cost of fixing damaged homes and cars.