Suncorp has reported a $1.2 billion group net profit off the back of $14.1 billion in general insurance gross written premiums and $57bn in bank home lending for the full year to 30 June 2024.

The ASX-listed insured reported an increase in earnings driven by improved underlying margins, positive investment returns and natural hazard costs below allowances. Group net profit after tax (NPAT) was $1,197 million (pcp $1,071 million) while cash earnings increased to $1,372 million (pcp $1,177 million). Suncorp Bank, which was sold to ANZ on 31 July, contributed NPAT of $379 million (pcp $470 million).

In the General Insurance business, gross written premium (GWP) increased by 13.9% reflecting both unit growth and targeted price increases in response to higher costs from reinsurance, natural hazards and claims inflation. The UITR or margin for 2H24 in the General Insurance business increased to 12.0%, with the full year increasing from 10.6% to 11.1%. The improvement was supported by revenue growth, the impact on earnings from price increases in response to higher input costs, and from efficiency gains in the business.

Suncorp reported $7.53bn in consumer gross written premiums and $3.95bn in commercial and personal injury premiums, delivering $424m in profit across consumer insurance after tax, and $381m in commercial and personal injury profit.

The total cost of natural hazard events was $1,235 million, $125 million below the Group's allowance. The Group managed 12 separate weather events in Australia and one event in New Zealand, as well as events covered by the Cyclone Reinsurance Pool (CRP). The Group's natural hazard allowance for FY25 is $1.56bn with a comprehensive reinsurance program placed successfully at a cost broadly in line with the prior year.

Overall, Suncorp paid out $9.7bn in customer claims, and saw digital sales rise from 67% to 75% oevr the 12-month period. its Net Promoter Score was +7.4.

Total group operating expense increased 8.5% to $2.bn, costs attributed to inflationary pressures, related expenditure and higher banking costs.

Suncorp CEO, Steve Johnston said: "While the headline results represent strong increases on the prior year it's important to point out that the past three years have been very challenging for all insurance companies with inflation, natural hazards and a fundamental resent in global reinsurance markets. It's pleasing that we navigated these challenges, and the complexity of the bank sale, and our earnings have rebounded to roughly where they were previously."

"While the bank sale process continued through the year, our insurance portfolios have remained focused on improving our underlying business and customer experiences. As a pureplay insurer, we now look forward to investing in our business and delivering greater value for our customers and communities as well as our shareholders."

Johnston acknowledged a challenging period for customers amid ongoing inflationary pressures and the continuing impact of severe weather events, particularly in Queensland in late 2023.

"Over the past five years we have managed around 700,000 natural hazard claims at a cost of more than $9 billion. This step-up in the frequency and severity of weather events has impacted the cost of reinsurance and the amount we set aside in our natural hazard allowance. Together these input costs have increased by more than $1 billion and much of this has unfortunately flowed through to customers. On top of this has been the inflation that has been embedded in the Australian and New Zealand economies," he continued.

"As we have outlined previously, the impacts of climate change, a reassessment and repricing of risk by global reinsurers, the planning and zoning mistakes of the past and stubborn inflation have converged to put upward pressure on insurance pricing. Suncorp remains committed to working alongside government, the wider insurance industry and our communities to respond to these challenges."

Johnston said Suncorp had also incorporated learnings from the major claims events in 2022.

"I recognise that we must continuously improve our processes and communications in order to meet the changing needs of our customers," he said. "Using our new pricing engine, we are continuing to carefully manage input costs, and pleasingly some of these pressures have moderated in the last six months, with average written premiums easing for our Australian customers.

"To put further downward pressure on inflation we have expanded our motor repairer panel and invested in technology and process improvement to improve end-to-end customer experience and claims costs. In home we are taking a variety of actions to manage large fire and water claims that have increased this year.

"Our ability to support our customers and the wider community during future events will be improved by our investment in a disaster response centre of excellence out of our Brisbane headquarters, as part of our commitments agreed with the Queensland government through the sale of the Bank."