The Australian company, which sells general insurance via Vero and AA Insurance, received 26% more in home insurance premiums, 21% more in motor premiums, and 8% more in commercial premiums.
The jumps came as Suncorp had to fork out much more for reinsurance following Cyclone Gabrielle and flooding in the upper North Island in early 2023.
Suncorp New Zealand’s reinsurance costs rose by 36% over the year.
Speaking to the Herald, Higgins said Suncorp had to reinstate its whole reinsurance programme after the events, or buy a whole lot more cover, which came at a large one-off cost.
Furthermore, reinsurers reset their risk appetites, and thus pricing, for New Zealand.
“Reinsurers had no appetite to provide cover down to the layers that we had previously enjoyed,” he said.
“So, we had to take on that risk ourselves on our balance sheet, which meant we had to look at, how do we price for that?”
Looking ahead, Higgins expected reinsurance cost increases to moderate.
“Our job as a country is to convince the reinsurance market that we understand our natural hazard risk that’s driven by climate change... and that we’re doing something about it,” he said.
“But if New Zealand experiences another Auckland flood that surprises the reinsurance market, it’ll be game on again.”
Higgins also expected a moderation in general inflation to slow claims cost increases and therefore premium hikes.
He noted the insurer had been affected by decent rises in building costs and wages, as well as shipping constraints.
Suncorp New Zealand’s general insurance profit after tax rose by 225% over the year to $211 million.
The business benefitted from there being fewer costly disasters during the year.
Asteron Life sale expected to be completed in January
As for Suncorp New Zealand’s life insurance business, known by the brand Asteron Life, its profit after tax fell by 27% to $19m.
In April, Suncorp announced it agreed to sell Asteron Life to Bermuda-based company, Resolution Life, for $410m.
Suncorp said its expected to complete the sale at the end of January.
It said it received approval from the Overseas Investment Office, and no objections had been raised by the Commerce Commission.
However, it was yet to receive approval from the Reserve Bank - insurers’ prudential regulator.
It took the Reserve Bank 18 months to approve the sale of AMP Life to Resolution Life in 2020.
It put a number of conditions around the A$3 billion sale to protect policyholders, as it was wary Resolution Life wanted to use a “run-off” model – make money by managing existing policies, rather than selling new ones.
Resolution Life intends to take a different approach with Asteron Life, saying it wants the business to keep operating as it is and take on new customers.
Combining Suncorp’s New Zealand general and life insurance businesses, it increased its profit after tax by 153% to $230m in the year to June.
Meanwhile, Suncorp Group reported a net profit after tax of A$1.2 billon – a 12% jump from the previous year.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
