Suncorp Group (SUN) H1 2025 earnings summary

Executive summary

• Net profit after tax rose 89% year-over-year to $1,100 million, including a $252 million one-off gain from the sale of Suncorp Bank, driven by benign natural hazard experience, strong investment returns, and the non-recurrence of prior year reserve strengthening.

• Cash earnings increased 30.3% to $860 million, with underlying general insurance trading ratio (UITR) at 11.8%.

• Completed the sale of Suncorp Bank and New Zealand Life (Asteron Life), positioning as a pure-play insurer focused on Australia and New Zealand.

• Announced a fully franked interim ordinary dividend of 41 cents per share (payout ratio 60.6% of cash earnings), a $3.00/share capital return, and a 22c/share special dividend from the bank sale.

• 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, with underlying GI profit up 33%.

• Net investment income was $374 million, supported by high yields and strong equity markets.

• Natural hazard costs were $503 million, $277 million below allowance due to benign weather.

• Operating expense ratio in General Insurance at 13.1%, with strategic investments driving a 7.4% increase in expenses.

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

Outlook and guidance

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

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

• FY25 expense ratio forecast to improve by about 90 basis points below prior year.

• Further capital management initiatives likely after completion of the bank capital return, including potential on-market buy-backs.

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