Suncorp premium rises a ‘perfect storm’ riling customers
Skyrocketing insurance premiums are beginning to test the limits of consumers, after insurer Suncorp jacked up the cost of home and car policies by more than 10 per cent.
Suncorp’s results showed that average premiums for home cover are up 12 per cent annually. That was only surpassed by a 12.2 per cent rise in 2013, following massive south-east Queensland flooding. For motor cover, premiums soared 13.5 per cent.
Suncorp’s Steve Johnston presenting results on Wednesday. Louie Douvis
Steeper home and car cover attributed to higher costs for disasters is helping fuel a drop in a key customer satisfaction measure at Suncorp, one of Australia’s two biggest insurers behind brands such as AAMI.
Policyholders are also increasingly toying with their excess levels – adjusting how much they have to contribute in the event of a claim – to mitigate such increases. Despite this, Suncorp argued its overall retention of customers was within expectations.
“We’ve had to put prices up and we don’t like doing it and we understand that that’s creating affordability challenges for customers,” Suncorp chief executive Steve Johnston told The Australian Financial Review. “But it’s not all been a one-way traffic, we have made our business more efficient.”
The insurance and banking giant’s full-year cash profit hit $1.254 billion, up from $673 million on the previous year. A chunk of this gain was linked to the absence of mark-to-market losses on investments which hit the bottom line a year earlier.
Its final dividend of 27¢ meant the full-year payout ratio was 60 per cent of cash earnings, at the bottom end of guidance issued to investors.
Brisbane-based Suncorp partly blamed the meeker-than-expected payout on the delayed sale of its banking
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