ASX-listed Suncorp more than triples annual profit in New Zealand post-quake
Suncorp Group [ASX: SUN] , the owner of Vero New Zealand, has reported a 264 percent increase in New Zealand earnings in the wake of the Christchurch earthquakes and is optimistic of more as the economy recovers.
The ASX-listed firm reported a NZ$91 million general insurance trading result in the year ended June 30 in New Zealand where it owns Vero, up from NZ$25 million the previous year. In Australian dollar terms, the result for New Zealand was up 311 percent.
Suncorp said policy rate increases in response to higher reinsurance costs and growth in new business in personal lines of product contributed to a 13.6 percent rise in gross written premiums in New Zealand.
"Following the consolidation of the general insurance industry as a result of the Canterbury earthquakes and new prudential regulation, the outlook is positive for remaining insurers," the company said in a statement to ASX. "The New Zealand economy continues to recover."
Insurance companies have fronted angry groups of protestors in Christchurch, and Suncorp told the ASX completion of earthquake claims from the city remained a priority.
Vero New Zealand is well advanced in a strategic review and is looking to improve risk assessment, pricing, cost control and customer claims management, the owner said.
"New Zealand will continue to contribute to the group's commitment to 'meet or beat' 12 percent underlying insurance trading result."
The company increased gross written premiums from motor vehicle insurance in New Zealand by 13.2 percent, mostly due to business growth through its AAI unit.
The New Zealand commercial insurance business grew gross written premiums by 11.8 percent care of "rate increases to more accurately reflect risk".
The New Zealand life insurance business grew new business by 42.9 percent.
Asteron Life's place in the New Zealand market is growing as the result of better partnerships with financial advisers and a drive to simplify remuneration structures, Suncorp said.
AA Life and Life NZ's direct channel had sales growth of 22 percent.
The company sees significant opportunities in Australia and New Zealand to increase sales of life insurance, saying people are under insured.
Suncorp's group net profit sank to A$491 million from A$724 million a year earlier after booking a loss on the sale of commercial property portfolio and corporate loans.