Suncorp considers sale of life business

Suncorp Group has flagged a possible sale of its life insurance business.

The company signalled the possibility in its half-year results announced to the Australian Securities Exchange.

The Group announced an indifferent half year profit result, with net profit after tax down 15.8 per cent to $452 million for the six months ended 31 December, last year.

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It said the result was impacted by natural hazards and timing of investments, including the Business Improvement Program and increased regulatory costs.

However, the company has told the Australian Securities Exchange it expects a strong full-year result.

The board has determined an interim dividend of 33 cents per share.

On a divisional basis, the company’s life insurance business provided some good news with underlying profit up 56 per cent to $39 million which the company said reflected the benefits of repricing and an ongoing focus on its optimisation process.

However, Suncorp chief executive, Michael Cameron said that while the Australian Life Insurance business was progressing well, the company continued to explore alternatives “which include a partnership, sale or reinsurance”.

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This is such a joke but not funny, Asteron just increased its level premiums by 12.50% for existing clients .......this to a average person looks like they are trying to pump up the book for sale, without giving any thought to the advisers and clients that have supported them for years and years.

These insurers are heartless. How can we ever be expected to support them and recommend Level premiums with any confidence when they ALL constantly put up the prices on existing business (especially Level Premium policies) to drop the prices for new clients, or to make up for previous price reductions to get new business.

So we are forced (due to their money grabbing tactics) to recommend Stepped premiums (which become un-affordable when clients get over 55) and do annual reviews and because they keep lifting the prices on their existing clients we are forced to change insurers every so often if we want to retain our clients and abide by BID. Then the insurers accuse us of churning.

What a joke - not a funny one though.

If only ASIC and APRA etc had some balls to stand up to the FSC cartel and tell the insurers that they need to offer Guaranteed Level policies (not like current quazi guaranteed level a few companies offer, where they can still change the premiums for whatever reason other than age). These Guaranteed Level policies can ONLY be increased by CPI until a certain age. This would remove the problem of churn entirely, the client can easily budget for their premiums and the insurers will retain business for longer. I cant believe all the problems could be addressed with this simple solution.

Oh, but its not about the client, or the long term viability of the insurer, its all about short term profits and executive bonuses.

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