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Suncorp H1 profit falls 15pc on Melb hail

Stuart Condie  |  15 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Suncorp's (ASX: SUN) first-half profit as fallen 15.8 per cent to $452 million after Melbourne's December hail storm contributed to a blowout in natural hazards costs.

The financial services giant on Thursday said insurance premium revenue for the six months to December 31 had risen 1.8 per cent, but that natural hazard costs had climbed $65 million above allowance to $395 million.

Nonetheless, Suncorp says second-half reserve releases will once again be above 1.5 per cent of net earned premium thanks to low inflation and long-tail claims management.

Suncorp, which has held its interim dividend at a fully franked 33 cents, will look to return the surplus capital to shareholders at the time of its full-year results.

"The group is well capitalised with $381 million in CET1 (common equity tier one) capital held above its operating targets," Suncorp said in a statement to the ASX.

"Suncorp remains committed to returning excess capital to shareholders."

Net profit at Suncorp's Australian insurance division fell 28.5 per cent to $264 million, with net earned premium growth offset by the higher natural hazard costs and investment in improving the business.

That investment should pay off in the second half and beyond, chief executive and managing director Michael Cameron said.

"Today's result provides evidence that our strategy, our team, and our organisation will deliver an improved second half and a significant uplift in performance in FY19 and 20," Mr Cameron said.

Investment in the business also reduced net profit at the banking and wealth business by 5.3 per cent to $197 million, but lending grew by 8.7 per cent.

SUNCORP'S SOLID FIRST HALF

* Net profit down 15.83pc to $452m

* Revenue down 9.23pc to $7.84bn

* Insurance premium income up 1.9pc to $5.27bn

* Interim dividend flat at 33 cents, fully franked

 

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