"New Zealand experienced a number of flood and storm events in the second half of 2021, including the severe storm that affected Westport and all of central New Zealand in July, and flooding in west Auckland in August."
On top of that the company is grappling with rising costs like building supplies and car parts as well as labour costs which are putting pressure on its premiums and claims.
While its life insurance arm has been hit by rising bond yields pulling down its investment returns.
Higgins said it had also seen some large claims from fires in commercial properties.
"If I park the large losses, hopefully, we won't expense that in the next half but in the context of natural hazards the frequency is increasing and the severity is increasing - we see it not only in New Zealand but in Australia as well."
He said the company was trying to keep costs under control by making the claims process as efficient as possible.
"The more efficient we can be in enabling consumers to lodge their claims, assess their claim and repair their car or home the better the cost outcome which then goes to profitability.
"We are very focused on our claims service not only the procurement of materials, parts, labour, building materials but also the management of those. We try to simplify where we can, automate where we can. Where building resources are needed, make sure we channel those to the right properties that have been more severely damaged."
But he said it had been harder to control the claims process last year with the extended Covid-19 lockdown in Auckland.
"When you have got restricted movement as we saw in the latter half of last year some areas we couldn't even get into because we weren't allowed to travel and the building materials were seeing increased prices and costs - timber, steel, gib that is putting inflationary pressures on claims.
"We have to absorb those costs to get the customer back into their home but what we also need to do is have a clear outlook of where inflation is coming through or likely to come through from a claims points of view and make sure we get the right balance of risk-based pricing right but also making sure that people that do have a sum-insured policy that they set the right level of sum-insured so if there is a total loss of their home due to a flood or otherwise they have got sufficient funds to replace their home."
Higgins said it was looking at its premium pricing every three to six months.
"We have adjusted some premiums early last year, the end of last year and will look again as we see inflation coming through the book."
Despite the hit to its bottom line the company had continued to grow, with Vero seeing 12 per cent growth across its book and AA Insurance 17 per cent with 7 per cent coming from new customers.
"We have had quite a lot come in due to brand, service - when people ring someone answers the phone - I think we are still seeing a positive impact from the financial support given in last few years."
But the second half of its financial year will continue to be challenging with Covid-19 and the Omicron outbreak yet to hit its peak in New Zealand.
"The top of my list is the safety of our own people - with everybody working from home at the moment with the exception of a few people in the office. As Omicron starts to take hold in the community we will see not only disruption to our own people which means we are expecting a higher absenteeism rate ... but equally businesses, whether they will be able to operate at full capacity because of absenteeism in their own supply chain and how does that then translate to us?
"When we try to repair vehicles if the repair shops are closed or retail outlets are closed or we try and repair a business that is damaged but can't get access to it because of certain restrictions and then the broader term inflationary pressure that whether it be on building materials, wages and resources generally getting access."
Higgins said he was hopeful that New Zealand's planned border easing would help with labour supply pressures.
"Staff attraction, retention, absenteeism, supply chain issues - they are the main things over the next, hopefully no longer than six months, but we have just got to navigate our way through."
He said the business had done continuity planning for 20 per cent and above of its workforce being out of action due to Covid.
"We have gone through the planning of that and we have looked at claim resources, call centre resources, assessor resources and we have got backup plans in place should we see absenteeism hit 20 per cent plus rates. That is what we are planning for."
Parent company Suncorp made a net profit of A$388m.
