Suncorp lifts dividend as higher premiums fuel growth

Suncorp Group will lift its dividend by more than 40 per cent after posting sharply higher insurance profits, driven by strong growth in premiums and higher investment returns.

The financial conglomerate that owns brands including AAMI, GIO and Apia delivered its half-year results on Wednesday, reporting 44 per cent rise in net profit after tax to $560 million.

Profits in its biggest division – Australian insurance – jumped 142 per cent to $276 million. This was helped by 9 per cent growth in its revenue from gross written premium, higher yields on its investment portfolio, and the release of provision for claims from businesses harmed by COVID-19 lockdowns.

Despite the higher insurance profits, Suncorp still exceeded its allowance for disaster claims by $99 million after it incurred around 53,000 claims for natural hazards in the half.

As premiums for home and motor insurance increase briskly, Suncorp reiterated that inflationary pressure and high natural hazard costs continued to drive premium rates higher.

The company will pay its shareholders a full-franked interim dividend of 33c a share, up from 23c last year, which is an increase of 43.5 per cent.

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Chief executive Steve Johnston said it was a strong result, and the company was on track to hit its financial targets for the year.

“Suncorp’s priority has been supporting our customers impacted by these severe weather events, while also continuing to work hard to return customers to their homes following the Australian East Coast floods almost one year ago,” Johnston said in a statement.