Suncorp Group is set to reduce its motor claims workforce, proposing to cut nearly half of the roles from its assessing coordinator team and shifting some responsibilities offshore as part of a broader operational overhaul.
According to Suncorp, the proposed change will affect 30 out of 70 roles in its motor claims coordination unit. A portion of these responsibilities will be transferred overseas, with the aim of streamlining towing coordination processes for motor insurance claims.
The Finance Sector Union (FSU), which represents many of the impacted employees, has initiated a member consultation and plans to formally challenge the proposal.
According to Financial Services Online’s report, union officials have expressed concern over the short consultation timeframe and the job security of affected workers.
Previously, the FSU successfully blocked a similar plan that sought to outsource weekend motor claims functions, a change that might have reduced pay rates for those roles.
Suncorp said redeployment options would be made available to those impacted by the restructure.
“We are currently looking at changes to our motor claims administration and coordination team aimed at improving how we organise towing for our customers,” a spokesperson from Suncorp told Insurance Business.
The spokesperson added that any impacted employees would be offered the opportunity to move into the home claims team to support customers impacted by ex-Tropical Cyclone Alfred.
The move follows Suncorp’s half-year financial report, which noted a substantial 89% increase in net profit to $1.1 billion. The growth was attributed to gains from divesting its banking business, lower catastrophe losses, and favourable investment returns.
At the same time, Suncorp acknowledged rising claims costs within its motor portfolio, attributed to inflation and higher exposure levels. This aligns with the Insurance Council of Australia’s (ICA) latest industry paper which revealed that comprehensive motor insurance premiums have climbed 42% since 2019, now averaging over $1,050 annually.
The ICA’s report tied the increases to a parallel rise in claims costs, which have also grown 42% over five years. Among the key drivers are a 26% spike in vehicle repair costs since 2022, ongoing labour shortages, and increased complexity in automotive technology. Repair bills currently account for about 60% of total claim costs.
Meanwhile, insurance fraud accounted for approximately $560 million in losses in 2023, driven by staged accidents and false claims.
Despite higher premiums, Australian Prudential Regulation Authority (APRA) figures showed a drop in profitability for motor insurance lines, with the claims-to-premium ratio increasing from 89% in mid-2019 to 94% by mid-2024.
