Suncorp Group (SUN) H1 2025 earnings summary

Executive summary

• Net profit after tax rose 89% year-over-year to $1,100 million, driven by strong underlying insurance performance, benign natural hazard experience, investment returns, and a $252 million gain from the Suncorp Bank sale.

• Cash earnings increased 30% to $860 million, with underlying insurance trading ratio (UITR) at 11.8%.

• Completed the sale of Suncorp Bank and New Zealand Life, returning $4.1 billion to shareholders via capital return and special dividend.

• Interim ordinary dividend of 41 cents per share (fully franked), payout ratio 61% of cash earnings.

• Strong capital position supports further capital management initiatives, including likely on-market buy-backs.

Financial highlights

• General Insurance gross written premium (GWP) grew 8.9% year-over-year to $7.5 billion.

• General Insurance profit after tax up 72% to $875 million year-over-year.

• Natural hazard costs were $277 million below allowance due to benign weather, with claims paid totaling $4.8 billion.

• Operating expense ratio at 13.1%, down 0.8pp year-over-year, with strategic investments driving a 7% increase in GI expenses.

• Strong balance sheet and high-quality investment portfolio, with most fixed income investments rated A or better.

Outlook and guidance

• GWP growth expected in the mid to high single digits for FY25 as pricing moderates with easing inflation.

• UITR expected to remain at the top end of the 10%-12% range.

• FY25 expense ratio forecast to reduce by about 90 basis points year-over-year.

• Capital management to remain disciplined, with payout ratio at mid-point of 60%-80% range and further buy-backs possible.

• Natural hazard allowance set for the full year; reinsurance program fully intact for 2H25.