Suncorp Group's New Zealand insurance division lifted first-half profit 81 per cent as the Australian owner of Vero Insurance faced fewer claims in a period when there were no major earthquakes.
After-tax profit rose to $67 million in the six months ended December 31 from $37m a year earlier, Brisbane-based Suncorp said in a statement to the ASX.
The bulk of that came from the general insurance division, which consists of Vero and the AA Insurance joint venture, which more than doubled profit to $50m, as net incurred claims shrank 6.5 per cent to $348m from the year-earlier period which included the Kaikoura earthquake. Gross written premium rose 7.6 per cent to $768m, with auto and home insurance premiums growing at a double-digit pace.
"The New Zealand general insurance business has maintained strong growth and underlying performance," Suncorp said. "Natural hazard experience is significantly lower than the prior year's earthquake-affected result."
The result echoes that of larger rival Insurance Australia Group, New Zealand's biggest general insurer, which more than tripled first-half earnings on the absence of earthquake claims.
Suncorp's group net profit fell 16 per cent to A$452m ($485.8m) as the Victorian hail storm drove up natural hazard claims in Australia. The board declared an interim dividend of 33 Australian cents per share, payable on April 5. The ASX-listed stock last traded at A$13.32 and has declined 3.9 per cent so far this year.
The insurer said it's working on a series of initiatives to lift earnings at the New Zealand unit, and will keep focusing on motor claims cost inflation with new pricing and improving claims management processes.
Gross written premium "growth across the portfolio will continue to be supported by strong new business performance and the pricing response to both claims cost trends and the reinsurance impacts of recent natural hazard events," it said. "Price increases implemented during the half year will continue to flow into the renewal book."
Suncorp's New Zealand life insurance division, the Asteron Life and AA Life joint venture, posted a 5.6 per cent decline in first-half profit to $17m on what it said was "short-term volatility" in claims experience. In-force premiums rose 5 per cent to $252m.