Suncorp will consider a range of options for its life insurance business, Asteron Life, stating that additional reinsurance, a partnership or full sale were all still in the table.
The comments were made as Suncorp released its annual results for the past financial year in which Asteron Life reported a 50% decline in after net profit after tax, down to $34 million.
Suncorp Group Chief Financial Officer, Steve Johnston said the life insurance business remains under review but did not give further details as to whether a sale may be on the cards.
“We remain committed to improving the profitability of the Australian Life Business through a comprehensive optimisation program, which we are confident will lead to an improvement in claims outcomes, reduced costs and a more sustainable business,” Johnston said.
“…considering a number of options, including additional reinsurance, partnerships, through to a full divestment of the business…”
“The optimisation program sits alongside a strategic review which is considering a number of options, including additional reinsurance, partnerships, through to a full divestment of the business. The review is on-going and we will keep the market fully informed as we progress,” he said.
Suncorp stated that while underlying profit after tax for Asteron Life was $53 million, unchanged from the previous financial year, after tax profits fell from $68 million on 2015/16 to $34 million in 2016/2017.
Suncorp said market adjustments of $19 million, including negative returns in investments and negative claims experiences – driven by volatility in lump sum payments and elevated claims incidence in its Income Protection book, were responsible for the decline in after tax profits.
Inforce annual premiums contracted by 0.9% from $813 million to $806 million with the bulk of that coming via advised channel which increased marginally from $652 million in the 2015/16 financial year to $658 million in past financial year.
