Suncorp Group's New Zealand insurance units posted a 57 per cent decline in first-half profit, mainly reflecting the Kaikoura earthquake and additional 'over-cap' claims from the 2010/11 Canterbury earthquakes.
Suncorp New Zealand's general insurance and life insurance businesses had a profit of $37 million, down from $87m a year earlier. The decline was mostly in Suncorp's NZ general insurance business, which operates Vero Insurance and AA Insurance in a joint venture, recording a 72 per cent drop in profit to $19m. Its life insurance businesses, Asteron Life and AA Life (a JV), had a 5.3 per cent drop in earnings to $18m.
The parent company today reported a 1.3 per cent gain in first-half profit to A$537m while also saying it was looking at strategic alternatives for its life insurance arm, which could include a sale or partnership. Suncorp's New Zealand life insurance business isn't covered in the review.
The parent company's results pack, released to the ASX today, shows operating expenses for New Zealand rose to A$203m from A$186m, offsetting lower expenses from Suncorp's insurance and banking & wealth businesses across the Tasman. The parent's results show net costs for natural hazard events included A$28m of internal reinsurance on the Kaikoura earthquake. That was the Australian group's third-largest of 11 natural disaster events in the first half after storms in South Australia and Victoria in November and December.
Net of internal reinsurance, the Kaikoura earthquake costs were $20m.