Suncorp Flags Life Insurance Sale

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Suncorp has reported an increase in underlying profit for its life insurance business of more than 50 per cent for the past six months but has flagged that it may still sell the business.

Suncorp Group Chief Financial Officer, Steve Johnston

Presenting its half year results last week, Suncorp stated that that underlying profit after tax for its Australian life insurance arm increased by 56 per cent, to $39 million following repricing, favourable claims experience and reduced expenses under an ongoing optimisation program.

Commenting on the results, Suncorp Chief Financial Officer, Steve Johnston said “…planned margins have benefited in and have improved, largely as a result of the pricing we’ve put in the book over the past year”.

“(Claims) experience has also been modestly positive, which is an encouraging sign given the adverse trends that others in the industry have experienced, particularly in income protection,” Johnston added.

“…we continue to explore strategic alternatives, which include a partnership, sale or reinsurance…”

In-force premium grew 0.9 per cent from $801 million to $808 million but new business dropped from$33 million to $32 million in comparison with the 2017 half year figures.

Johnston also said that Suncorp would continue to run the optimisation program alongside a strategic review with Chief Executive and Managing Director, Michael Cameron adding that this may lead to insurance partnership, reinsurance arrangements or a sale.

“Pleasingly, optimisation of the Australian Life Insurance business is progressing well. Meanwhile, we continue to explore strategic alternatives, which include a partnership, sale or reinsurance. The focus is on providing great customer outcomes and delivering better returns for our shareholders,” Cameron said

This is the second time Suncorp has flagged a possible sale or reinsurance deal, having made similar statements at the release of its 2017 full year results (see: Suncorp Considers Asteron Life Options).