Overview
Suncorp Group's latest half-year results showed a steep earnings decline as the insurer absorbed substantial natural hazard losses and mark-to-market investment setbacks. For the six months ending Dec. 31, the Sydney-listed company reported net profit after tax of A$263 million, down from A$1.1 billion in the prior year. The company said the combination of elevated claims from declared weather events and investment valuation movements materially reduced profitability.
Market reaction
Shares of the company traded lower following the update, sliding nearly 5% to A$15.225 by 02:27 GMT and touching their lowest level since March 2024. The fall left the stock near two-year lows as investors digested the scale of insured losses and weaker investment returns.
Claims and underlying earnings
Suncorp recorded nine declared weather events during the half, which generated more than 71,000 claims at a net cost of about A$1.3 billion. Severe thunderstorms and hailstorms across eastern Australia were cited among the costliest events. Net incurred claims for the period rose by 23% to A$5.48 billion.
On a cash earnings basis, the insurer reported A$270 million, down from A$828 million a year earlier. The company said mark-to-market investment losses also weighed on the reported profit result.
Business resilience and capital return
Despite the earnings hit, Suncorp said its underlying insurance margins remained resilient. The insurer's insurance trading ratio stood at 11.7%, which the company described as near the top of its target range, supported by premium increases and growth in its consumer portfolio.
Suncorp declared a fully franked interim dividend of 17 Australian cents per share. The company also reiterated its guidance for gross written premium growth to land at the lower end of the mid-single-digit range for fiscal 2026.
Implications
The results underline the direct impact of weather-related claims and investment mark-to-market volatility on insurers' near-term profitability, with shareholders reacting to the scale of the loss events and the weaker reported earnings.
Note - All figures and statements in this article are drawn from the company's disclosed half-year results for the six months to Dec. 31.