Suncorp has seen prices increase in the New Zealand commercial market on the back of the Kaikoura earthquake.
The insurer, which released its results yesterday, found that the New Zealand branch of the business had suffered a profit dip but GWP for its insurance business had risen by 6.3% thanks to its home and motor portfolios.
Michael Cameron, CEO and managing director of Suncorp, said that the firm has seen a turn in the market following last year’s earthquake.
“In New Zealand, post-earthquake, there is a significant level of price hardening there,” Cameron told a media briefing.
Price rises in New Zealand have been coupled with similar results in both personal and commercial lines in Australia.
Across the ditch, the insurer has seen home and motor prices rise by 3% to 5%, while commercial premiums have risen 10% to 13% over June renewals “fairly freely”.
As prices increase, Cameron said it will be important for the business to offer more benefits and increased value for customers.
“We actually expect that while there may be price increases coming through on individual product lines, the overall value we can give our customers as a result of improving claims processes and the procurement approach will result in better prices in the hands of the customers,” Cameron said.
“Although the core products, as a result of industry pressure, will observe that increase.”
The firm will invest AU$100 million after tax in its One Suncorp strategy, which will see the business continue its push towards digitalisation.
Cameron stressed that the push towards a single platform for the entire Suncorp entity will not leave brokers out in the cold as they remain “a critical part” of the firms’ distribution strategy.
“The intention is to allow customers to deal with us in any way they like – whether they want to transact with us through an app, a call centre, a store or a broker, and many people will use a combination of those,” Cameron continued.
On its outlook, Suncorp said that in the medium term, they will look to improve underlying net profit after tax with a sustainable ROE of at least 10%, which implies an underlying ITR of at least 12%.
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