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Suncorp NZ’s CEO says central government needs to lead on climate adaptation because attempts made by private industry will be seen as ‘profit driven’

Insurance / news
Suncorp NZ’s CEO says central government needs to lead on climate adaptation because attempts made by private industry will be seen as ‘profit driven’
Houses in Auckland flooded by rain water after a record storm.
A one-time flood is one thing. But insurers say repeated flooding or cliff erosion could leave homes without insurance protection. (Image: Rebecca Stevenson)

Suncorp New Zealand’s Chief Executive believes work around climate adaptation needs to be led by the central government instead of the private industry “because people will think we've got a particular interest that's profit driven”.

“I do think there's an onus on the Government to protect Kiwis and make sure that wherever we're building, it's protecting life risk as well as property risk,” Jimmy Higgins told

Suncorp is both Australia and New Zealand’s second largest insurer and holds more than a quarter of Australia's general insurance market. It has the Vero and Asteron Life brands and the joint venture AA Insurance business in NZ.

Even though Higgins says that central government should be leading the climate adaptation response, Higgins adds that they're not necessarily the ones that hold the solutions.

He points to organisations all over that are involved in flood recovery, disaster recovery, risk mitigation, risk assessment and have specific expertise in specific areas – but none of them come together “as one”.

“It’s action in pockets, but it is a complex problem with complex solutions. And so I know there's conversations around adaptation, climate change, resilient communities and the like, but it's a little bit disjointed,” he says.

“There's no central coordination involving those entities, government, local councils, private industry, who have an interest in the future sustainability of these communities to come together. And we need to take a 30, 40, 50 year investment lens, not a five-year budget lens.”

Premium bites

Higgins picks ‘challenging’ as the word to sum up Suncorp’s results from the first half of its 2024 financial year.  

“Challenging for our customers – less so for us,” he tells

Suncorp New Zealand reported $1.4 billion in gross written premium for the six months ended December 2023, up 19.6% from the previous period.

Consumer Price Index (CPI) data shows insurance premium costs rose steadily last year and in the 12 months to December 2023, were up 11.9%.  
“We also know, and we can't walk away from the fact that the last 12 months and going forward, some of the prices we've had to put through our books just to pay for the reinsurance that we've been hit with has been probably the biggest we've ever done, certainly in my time at Suncorp,” he says.

“We know that that bites at a time when there's a cost of living challenge already in the country and high interest rates, high inflation and just general consumer pressure that they're experiencing, it's not a good feeling to do.”

Suncorp New Zealand isn’t the only insurer that’s reported a growth spurt in gross written premium recently, its rival IAG NZ revealed an 18.8% surge in its half-year result earlier this month, not far behind Suncorp’s 19.6% jump.  

Insurance margin down

But while Suncorp NZ is leading the pack in terms of gross written premium growth, it saw a fall in its insurance margin – unlike IAG NZ which reported a 5.6% increase in insurance margin to 20.8%.

Higgins says Suncorp NZ’s insurance margin fell from “around 13% to 14%” in the previous corresponding period to about 9.2% in the six months to December 2023.

“The driver of that, obviously, is our reinsurance costs were significantly higher this time around than the same time last year,” he says.

Until the sting of higher reinsurance costs on the insurer’s books start to dull, premiums are less likely to climb down into more affordable territory.

Higgins adds that global reinsurers were taken by surprise over climate events like the Auckland Floods and Cyclone Gabrielle last year – both by their severity and their proximity to each other.

“We got indications pretty early on that we'd be seeing upwards of 50% increases on reinsurance costs. And so because it takes two years to earn a price increase, we had to get ahead of the game early.”

Suncorp NZ reported a net profit of $94 million in its half-year results on Monday, an increase of 3.3% while general insurance profit after tax was up 6.7% to $80 million.

Net incurred claims costs rose 6.9% to $620 million, which Suncorp NZ says was driven by inflationary pressures and customer growth.

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Higgins blames Suncorp achieving a lower insurance margin than IAG on increased reinsurance costs, the inference being IAG NZ's parent is charging its NZ business less for its reinsurance than Suncorp stings Higgins in NZ. Either there's another explanation, such as inferior risk underwriting and pricing, or Suncorp is screwing its NZ business. But that'd be transfer pricing and the Aussies would never do that to us would they.         


Don't regulate us, just our customers?


"As we explained back in November, the bet that Warren Buffett’s Berkshire Hathaway P&C reinsurance businesses had made on underwriting more property catastrophe risks was paying off in 2023.

...Warren Buffett remains as committed to the reinsurance business as ever and the 2023 investment return shows that one side of the business keeps on delivering, with insurance investment income reaching almost $9.6 billion for the year, up by 48% on 2022.

But, the underwriting side is delivering just as well and Warren Buffett’s bet on property catastrophe risk clearly paid dividends in 2023, with the growth of the P&C side largely property focused and the unit reporting record premiums and earnings as well."…


Worlds smartest investor invests heavily in a highly profitable reinsurance business that worlds smartest climate catastrophe forecasters predict has no future.  


Yep, a bootleggers and baptists scenario.


Ha. The army of climate catastrophe Nostradamus types prolific on this site could well be covert Berkshire Hathaway shareholders. Why wouldn't you be with BRK.b shares up $60 over recent months. 


The climate's quite normal where I live. Normal rainfall, normal temperatures, no inundation, no hurricanes this season.

An excuse for insurance companies to raise their premiums.