Suncorp Group reported a significant deterioration in first-half cash earnings, driven principally by an escalation in natural hazard costs and a drop in investment income. For the six months to December, the general insurer booked A$1.32 billion in natural hazard expenses, a figure substantially above the A$866 million allowance it had set for the period and more than twice the A$503 million recorded in the same period a year earlier.
The company said the high natural hazard charge reflected nine major events in Australia and New Zealand during the half, which included severe thunderstorms, coastal lows, windstorms, and floods. Those claims were a primary contributor to the decline in the insurer’s underlying profitability.
Investment income also weakened, falling by 31% to A$259 million. The combination of elevated claims from natural hazards and softer investment returns left Suncorp’s first-half cash earnings at A$270 million - a steep reduction from A$828 million a year earlier and below the Visible Alpha consensus of A$311.2 million.
In line with the weaker result, Suncorp declared an interim dividend of 17 Australian cents per share, down from 41 Australian cents in the prior year. The company has been operating as a pure-play general insurer since selling its banking division to ANZ Group in 2024.
The results underline the immediate financial impact of concentrated severe weather activity and illustrate how movement in investment returns can amplify earnings volatility for insurers that retain market exposures.
Currency disclosure included in the report notes that $1 equals 1.4120 Australian dollars.
Additional context provided by the company
Suncorp’s natural hazard expense for the half-year was driven by multiple, geographically concentrated events across its operating footprint. The insurer’s reported allowance for natural hazards was notably exceeded, which translated directly into higher claims charges and lower cash profitability for the reporting period.
Management reduced the interim shareholder payout in response to the earnings outcome. The combination of elevated catastrophe payouts and diminished investment income explains the material fall in cash earnings compared with the prior year.