Suncorp Group (ASX: SUN) has kicked off 2025 with a bang, reporting a $1.1 billion net profit after tax (NPAT) for the first half of the financial year—an 89% jump from the previous period. That figure includes a $252 million one-off gain from the sale of Suncorp Bank, which was finalized in July 2024. Even without that boost, the company’s cash earnings rose to $860 million, up from $660 million a year ago.
One of the key highlights of the half was lower-than-expected natural hazard costs, which came in at $503 million—a full $277 million below Suncorp’s allowance. Combined with solid investment returns of $374 million and an 8.9% increase in gross written premium (GWP), the result reflects a well-executed strategy in challenging market conditions.
A Big Payout for Shareholders
Suncorp is rewarding shareholders in a major way following the sale of its banking division. The first capital return—a hefty $3.00 per share—will be distributed on March 5, along with a special dividend of 22 cents per share on March 14, paid alongside the interim dividend of 41 cents per share.
CEO Steve Johnston emphasized that these results demonstrate Suncorp’s ability to deliver on its commitments, maintain financial resilience, and create capacity for future investments. He also noted that the sale of Asteron Life, finalized in January 2025, has fully repositioned Suncorp as a pure-play general insurer.
A Shift in Strategy and Strong Market Position
The past six months have seen Suncorp double down on customer experience, particularly in claims processing. With digital interactions now making up 61% of sales and service (rising to 70% during major weather events), the company is making it easier for customers to engage online. At the same time, a 6-point increase in Suncorp’s claims Net Promoter Score suggests that service improvements are being noticed.
On the weather front, Suncorp benefited from a relatively mild period, with just six significant events in Australia and no major ones in New Zealand. The company’s comprehensive reinsurance program remains fully intact, providing strong protection heading into the second half of the financial year.
Breaking Down the Insurance Business
Across its divisions, Suncorp saw broad-based growth:
- Consumer Insurance profit after tax more than doubled to $423 million, thanks to a quieter period for natural disasters and continued price adjustments to reflect inflation. Motor insurance GWP rose 10.3%, while home insurance GWP increased 10.2%.
- Commercial & Personal Injury profit after tax grew 7.2% to $208 million, with strong premium growth across all portfolios. The CTP business in Queensland got a boost from RACQ’s exit from the scheme, which helped push GWP up 9.0%.
- Suncorp New Zealand saw a massive turnaround, posting a profit after tax of NZ$248 million, compared to just NZ$74 million a year ago. This was largely due to the absence of major weather events, allowing for strong premium growth and improved margins.
Looking Ahead
Suncorp remains in a strong capital position, with room for further shareholder returns—likely in the form of on-market buy-backs. The company is forecasting mid-to-high single-digit GWP growth for FY25, as premium increases begin to moderate in response to stabilizing inflation.
The board has reaffirmed its target payout ratio of 60-80% of cash earnings, with dividends weighted more towards the second half of the year. Meanwhile, operating efficiency is set to improve, with expense ratios expected to decline by around 90 basis points.
A Focus on Resilience and Climate Risk
Johnston also reiterated Suncorp’s commitment to disaster preparedness and climate resilience. The company has expanded its claims team, rolled out new Mobile Disaster Response Hubs, and established a high-tech Disaster Management Centre in Brisbane.
With extreme weather events becoming more frequent, Suncorp is actively working with governments and industry bodies to push for greater investment in risk mitigation—an issue that’s likely to be a hot topic in the upcoming Australian Federal Election.
“We believe the aim should be a dollar-for-dollar pre- and post-disaster spending ratio,” Johnston said. “For every dollar spent cleaning up after disasters, a dollar should be invested in mitigation. That’s the level of commitment we need to make Australia more resilient.”
With a disciplined approach to capital management, a simplified business model, and continued investment in customer experience, Suncorp is positioning itself for long-term growth—and keeping shareholders well-rewarded along the way.
