Net profit after tax (NPAT) has fallen by 34% at Suncorp as the result of volatile investment markets and elevated natural disaster costs hits the insurer.
In its results for the FY22, reported to the Australian Securities Exchange, Suncorp said group net profit after tax was $681 million, down from $1,033 million profit for FY21.
“The prevailing La Nina weather patterns across Australia and New Zealand led to 35 separate weather events and around 130,000 natural hazard claims. This resulted in the group exceeding its natural hazard allowance by $101 million, with significant recoveries made under the Group’s reinsurance program.”
With a possible third La Nina expected to arrive later this year, Suncorp had increased its natural hazard allowance for FY23 to $1,160 million
Not only this, volatile investment markets including rapidly-rising yields and widening credit spreads, drove mark-to-market losses across its $14.9 billion investment portfolios.
“The net loss from investment market volatility was $190 million compared to a profit of $453 million in the prior year.”
The firm would pay a final fully-franked ordinary dividend of 17 cents per share, which represented a 75% payout ratio.
Suncorp Group chief executive, Steve Johnston, confirmed the firm was still in the process of selling its bank arm to ANZ and was expected to complete in 12 months time, subject to regulatory approval.
“The strategic rationale for the sale is compelling. With the ability to focus on our insurance business, Suncorp will become a leading trans-Tasman insurer with a better voice in advocating for greater resilience and mitigation measures to better protect our customers and our community.”
