Suncorp Earnings: Brace for More Price Increases as Cost Pressures Persist

Suncorp’s fiscal 2023 cash profit increased 86% to AUD 1.25 billion, 6% shy of our AUD 1.33 billion forecast. The miss is down to the New Zealand insurance profit being far weaker thanks to natural hazard events. Propelling the result was the Australian insurance division, where profit leapt to AUD 755 million from just AUD 174 million last year. Price increases drove 10% growth in gross written premium, but the claims ratio was modestly higher, leaving investment income on shareholder and policyholder funds of AUD 504 million to do the heavy lifting. Higher cash rates provided a nice tailwind to insurance earnings and a smaller contribution to the 28% increase in Suncorp Bank profit to AUD 470 million.