Suncorp Sees Growth Following Strategic Initiatives
Following the company’s May 29 announcement of a program of “strategic simplification,” Suncorp Life Group CEO Patrick Snowball says that the company is seeing positive results, including a 68% increase in after-tax profits for the year ending 30 June.
Suncorp’s after-tax profit was $251 million without adjustment for divested businesses and market volatility. Once those adjustments are taken into account, after-tax profit amounted to $146 million, an annual increase of 11.5% over the previous year’s profit of $131 million.
Total new life insurance business increased 6.7%, to $111 million for the year. According to Snowball, Suncorp will continue to focus on sales through independent financial advisers (IFAs) and on direct sales, decreasing its emphasis on group sales, all as part of its intentional strategic shift.
Sales through IFAs brought in $62 million of new business for the year, an increase of 10.7%, while the direct sales channel accounted for $30 million of new business, a 30.4% increase. Group new sales fell 61.5%, to $5 million, a decline that the company attributed in its presentation of results to “a decision to pursue only business that delivers an acceptable rate of return.”
In New Zealand, new life business rose 17%, to $14 million.
In its results announcement, Suncorp said that it expects growth to continue in both Australia, where direct life products are sold under the Apia, AAMI, GIO and Suncorp brands, and New Zealand, where it is represented by AA Life. It has also changed the name of its Asteron brand to Asteron Life and has launched Asteron Life Complete (ALC) in a move “aimed at building and maintaining a competitive advantage in the IFA market.”
ALC, according to Suncorp, has developed an improved technology platform and enhanced product features. The company has partnered with Colonial First State’s FirstChoice, which Suncorp calls “Australia’s largest investment platform,” in a move designed to better support the practices of advisers engaged in insurance planning in superannuation.
In the midst of these positive developments, Suncorp notes that the economic environment has put pressure on claims and lapses. According to the company, “Close management attention to claims and customer retention initiatives has mitigated some of this impact.” In addition, weakness in the investment markets has caused funds under administration to fall to $7.1 billion, a drop of 7.6%, while new superannuation business has declined 12%.