Vero owner Suncorp New Zealand reports a 17.3% rise in annual gross written premium to $2.8 billion, as net profit doubles to $230 million

Insurance premiums for the New Zealand arm of general insurer Suncorp shot up 17.3% in the 12 months to June, six months after the insurer’s Chief Executive said he was “hopeful” there would be a lower level of premium growth in 2024 compared to 2023.

Suncorp is both Australia and New Zealand’s second largest insurer and holds more than a quarter of Australia's general insurance market. 

The insurer has the Vero Insurance brand and the joint venture AA Insurance business in NZ. It used to also own Asteron Life but announced the sale of the life insurer earlier this year.

Suncorp released its annual results for the 12 months to June 30 on Monday, which showed annual Gross Written Premium (GWP) growth in NZ rose 17.3% to $2.8 billion. In 2023, Suncorp NZ’s annual GWP rose 14.3% to $2.4 billion.

Gross written premium is the total amount of money customers are required to pay for insurance coverage on policies issued by an insurer.

Suncorp NZ’s Chief Executive Jimmy Higgins had said at the insurer’s 2024 half-year results in February that the firm didn’t want to see 2023’s level of gross written premium growth in the rest of its 2024 financial year. 

“I am hopeful we won’t see the level of premium increases our customers experienced in 2023,” he said at the time.

Suncorp NZ said Vero Insurance’s premiums rose 14.5% and AA Insurance’s premiums rose 23.2%.

“Growth reflected the pricing response to higher input costs and claims inflation, along with solid unit growth, largely in the consumer portfolios,” the company said.

Suncorp NZ also reported a net profit after tax of $230 million in the 12 months period – double what it reported in its full 2023 financial results.

“Profit is up on the prior year largely due to a much better year for weather events, investment markets were much stronger this year than last year, we’ve increased our customer base, and while we paid out $1.2 billion in claims, we have started to see some of the claims costs and inflation moderate”, Higgins said on Monday.

Suncorp NZ covers approximately 850,000 households and $590 billion of assets across New Zealand. 

The company said the $1.2 billion it paid out in claims during the 2024 financial year came from approximately $600 million in property losses, and $400 million in vehicle related claims.

Suncorp NZ’s general insurance (GI) profit after tax was up from $65 million in 2023 to $211 million in the 12 months to June 30, a 224.6% increase.

The firm said its GI profit “benefited” from a benign natural hazard claims experience during the 2024 financial period compared to the 2023 financial year which had been impacted by significant weather events like the Auckland Anniversary floods and Cyclone Gabrielle. 

“The General Insurance business also benefited from strong top line growth, a moderation in working claims experience, and improved investment income,” Suncorp NZ said in its results.

Suncorp NZ’s Life Insurance profit after tax came to $19 million which it said was down 26.9%, or $7 million, compared to a year earlier. 

Suncorp said in its group results release on the ASX about its NZ Life Insurance profit that an increase in planned profit margins had been offset by an “unfavourable experience” – but didn’t expand on what that unfavourable experience was.

Suncorp announced in April earlier this year that it had sold its NZ life insurance arm Asteron Life to Resolution Life Australasia for over NZ$400 million – a year after Suncorp NZ denied Asteron Life was up for sale. 

Suncorp said in its results on Monday that approval for the sale had been obtained from the Overseas Investment Office and “no objections” had been raised by the Commerce Commission which operates as NZ’s market watchdog.

The sale is expected to be completed by January 3025 but the general insurer is still waiting for approval from the Reserve Bank.