Suncorp New Zealand has seen after-tax general insurance earnings rise by nearly 90% this year.
A range of factors have contributed to Suncorp New Zealand’s profit this year, its chief executive says, citing “the earn-through impact of previous year’s pricing changes, lower reinsurance costs and a relatively benign natural hazard environment”.
“This follows a period of lower profitability after major weather events including the Auckland floods and Cyclone Gabrielle,” chief executive Jimmy Higgins says.
This comes as Suncorp New Zealand announced its full year 2025 financial results on Thursday, reporting a net profit after tax of $398 million for general insurance. This is up from $211 million - an 88.6% rise.
Including life insurance profit after tax, Suncorp New Zealand's profit after tax is $419 million, increasing from $230 million (82.2%) in FY24.
Suncorp New Zealand includes Vero Insurance. The company also has a joint venture with the New Zealand Automobile Association, AA Insurance.
Over the past year, Suncorp New Zealand has paid around $1.2 billion in claims, Higgins says.
"Working claims experience benefitted from a moderation in claims volumes and inflationary pressures," the report says.
"Natural hazard claims increased relative to the prior year but remained below the allowance."
For FY25 this was $17 million below allowance and in FY24 this was $24 million below allowance.
The company’s underlying insurance trading ratio increased to 19.4% for the year ending to June but decreased in the second half. In FY24, this was 12%.
The underlying insurance trading ratio, as defined by the company, is adjusted for prior year reserve releases and natural hazards claims costs above or below long-run expectations, investment income mismatch and any abnormal expenses.
Its Gross Written Premium (GWP) increased 1.3% to $2,896 million. In FY24, this was 2,858 million.
Of this, $1,145 million was home, $740 million was motor, $972 million was commercial and $39 million was listed as other.
GWP is the total amount of money customers are required to pay for insurance coverage on policies issued by an insurer.
Suncorp’s annual report says this was driven by average wholesale price increases and moderate unit growth for its consumer portfolio.
Meanwhile its commercial portfolio “contracted, amid soft market conditions and competitive pressures”, the report says.
On January 31, Suncorp announced the completion of its sale of its New Zealand life insurance business, Asteron Life Limited. This was acquired by Resolution Life NOHC for $410 million.
Life insurance profit after tax was $21 million - this profit represents the seven months up to the completion of the sale at the end of January. In FY24, this was $19 million.
Higgins says "we know many households and small businesses are doing it tough and have faced higher costs over recent years, including for insurance”.
"It’s encouraging to see premiums beginning to moderate overall, and in some cases reduce, as supply chain inflation eases and reinsurance markets stabilise.
“Industry data shows levies and taxes now account for around 43% of home insurance premiums, which has a significant impact on their affordability."
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