Suncorp Group Limited has seen a boost in net profit after tax (NPAT) as a result of top line growth, benign weather conditions and favourable investment markets.
Suncorp reported an increase in NPAT of $574 million for the half year to 31 December 2012, up from $389 million in the prior corresponding period.
“While this result does reflect more benign weather conditions and improved investment markets, our business is in good shape,” Suncorp chief executive Patrick Snowball said.
“We are better positioned than ever to support our customers while delivering an improved financial performance.”
Suncorp’s general insurance group achieved a (NPAT) of $564 million, up from $162 million in the prior corresponding period.
Fewer natural hazard events, positive investment markets and operational efficiencies resulted in an insurance trading result (ITR) of $669 million.
Suncorp Life’s after-tax profit was $51 million for the six months ending 31 December and its underlying profit was $61 million.
However, Suncorp Life’s embedded value was down 7 per cent, reaching $2,430 million and with the key driver of change a lapse in material assumptions.
“A prolonged period of economic uncertainty continues to impact consumer confidence and is having a material impact on the life insurance industry,” Suncorp said in a statement to the Australian Securities Exchange.
“Suncorp Life has been negatively affected in a number of ways.”
With economic conditions reducing the affordability of life insurance policies, customer retention was also down by $17 million.
Suncorp said lower interest yields caused the investment income to be below long-run averages and new business was challenged by lower market growth.
Despite this, Suncorp chairman Ziggy Switkowski said the group’s strong result demonstrated Suncorp’s delivery against its three-year corporate strategy.
“The transformation of the Suncorp Group has been achieved despite protracted global economic volatility and unprecedented natural hazard impacts,” he said.
“I’m pleased with the progress and confident the business will continue to deliver for its customers and shareholders.”
