Suncorp is implementing an optimisation program for its Australian life insurance business in a bid to improve competitiveness and achieve better customer outcomes.
Announcing its half-year results today, Suncorp said it was rolling out the optimisation program following a portfolio review. It is also exploring strategic alternatives for the life business "to better meet customer needs and maximise shareholder value."
Suncorp's life business saw net profit after tax of $11 milllion in the first half of FY17. It was impacted by industry deterioration in lapse and claims trends; however the diversified wealth group said its "conservative approach to setting assumptions has resulted in minimal impacts to [lapse and claims] experience."
In an analyst briefing this morning Suncorp said life business retention is stable and winning new business remains challenging. Overall Suncorp's Australian insurance arm recorded a $369 million profit due to top line growth, lower claims costs and disciplined expense management.
Suncorp chief executive and managing director Michael Cameron said the business' outlook is for margin growth.
"Insurance's gross written premium growth, remediation of working claims and strong focus on claims management is expected to deliver an improvement in the underlying ITR (currently about 11%) in the second half," Cameron said.
"Life planned margins are expected to remain stable, however lapse and expense claims experience will continue to be impacted by volatile industry trends."
Suncorp's banking and wealth division delivered a $208 million profit which reflected improved operating expenses and strong credit quality. Overall the business recorded net profit after tax of $537 million for the half.