Insurer Suncorp’s first-half cash earnings tumbles as natural hazard costs surge

Feb 18 (Reuters) – Australian general insurer Suncorp Group posted a worse-than-expected drop in first-half cash earnings on Wednesday, hit by a surge in costs related to multiple severe weather events on the east coast and lower investment income.

Suncorp downgraded its annual gross written premium (GWP) growth forecast, citing soft market conditions and intense competition, which slowed GWP growth across divisions during the six months to December, with New Zealand clocking a decline.

The Brisbane-based insurer incurred A$1.32 billion ($935 million) natural hazard expenses in the six months to December, largely due to nine major events across Australia and New Zealand, including severe thunderstorms, coastal lows, windstorms, and floods.

That was far above its A$866 million allowance for the six-month period, and more than double the A$503 million it incurred last year. Its investment income also slipped 31% to A$259 million.

As a result, the general insurer’s first-half cash earnings sharply fell to A$270 million, missing the Visible Alpha consensus of A$311.2 million by a wide margin, and a steep drop from last year’s A$828 million.

“Suncorp’s 1H26 reported profits and shareholder returns have been challenged by an elevated level of natural hazard costs and lower investment returns over the half,” Chief Executive Officer Steve Johnston said.

Gross written premium for the six months to December rose 2.7% to A$7.69 billion, but missed the market consensus of A$7.78 billion. While growth slowed for most operations from last year, New Zealand GWP slipped 5.6% during the half.

It downgraded its full-year 2026 GWP growth outlook to around the bottom of the mid-single-digit range, from the prior view of mid-single-digit range growth. That compares with the consensus view of 4.2% growth.

Suncorp, which became a pure-play general insurer after selling its banking division to ANZ Group in 2024, declared an interim dividend of 17 Australian cents per share, compared with last year’s 41 Australian cents.

($1 = 1.4120 Australian dollars)

(Reporting by Sameer Manekar and Nichiket Sunil in Bengaluru; Editing by Maju Samuel)