Slide 1: FY21 Results Presentation
SUNCORP ( ) Financial results for the full year ended 30 June 2021 | AE SUNCORP | 4 = 4 4 , FY21 Results Presentation
Slide 2: Welcome and acknowledgement
FY21 RESULTS PRESENTATION Good morning and welcome. Let me begin by acknowledging the Yugera, Turrbal and Gadigal people, who are the traditional owners of the lands on which we meet today, and pay our respects to all Elders, past, present and emerging. Taking into account the current COVID restrict
Slide 3: Presenters and participants
FY21 RESULTS PRESENTATION I am joining you from Brisbane, while Jeremy Robson, our CFO, is in the Sydney office. Jimmy Higgins, the CEO of Suncorp New Zealand, is joining from our offices in Auckland. Reflecting the current lockdowns and restrictions, the other Australian based members of the leader
Slide 4: Group cash earnings up 42.1%
FY21 RESULTS PRESENTATION Turning to the result, and this slide presents the high-level P&L for the year. The Group’s cash earnings are up 42.1%, with strong underlying performance in each of the three businesses. The improving performance of the Australian GI business has been supported by mark to
Slide 5: Key financial highlights and momentum into FY22
FY21 RESULTS PRESENTATION On this slide I have called out some of the key financial highlights embedded in the result, and most importantly the momentum we have as we move into FY22. Our Australian Insurance business has delivered headline premium growth of 5.5% for the full year, the best full year
Slide 6: Capital management initiatives
FY21 RESULTS PRESENTATION Now to the capital management initiatives we have announced. As you know, Suncorp has a long-held commitment to return to shareholders any capital that is surplus to the needs of the business. We entered COVID with a strong balance sheet, giving us confidence and flexibilit
Slide 7: Three year plan and key milestones
FY21 RESULTS PRESENTATION Before handing over to Jeremy, I would like to make the point that today’s result should be seen in the context of the Group’s three year plan which we first outlined to the market in February and stepped through in detail during the investor series in May. The plan builds
Slide 8: Handover to CFO
FY21 RESULTS PRESENTATION The initiatives we have are clear and simple and we believe the results we are presenting today confirm the good progress we are making. I’ll return to this later in the presentation, but first let me hand over to Jeremy to run through the financials in more detail. 8
Slide 9: FY21 Results Presentation
FY21 RESULTS PRESENTATION SUNCORP |) e m) ed SUNCORP ©) 9
Slide 10: CFO welcome and result quality
FY21 RESULTS PRESENTATION Thanks Steve. Good morning everyone and welcome, and I do acknowledge it’s a pity we can’t be doing this in person this morning. I’d like to start by reinforcing Steve’s comments about the quality of the result we’re presenting today. We’re pleased with the performance of t
Slide 11: Insurance Australia result
FY21 RESULTS PRESENTATION I’ll now run through the result in more detail, starting with the Insurance Australia business. GWP finished the year up 5.5% on a headline basis with strong growth across most of our portfolios. As you’d be aware, headline GWP growth has been impacted by a number of factor
Slide 12: Claims waterfall
FY21 RESULTS PRESENTATION Turning next to claims and I’ve included the usual undiscounted claims waterfall on the slide. In Consumer, Motor claim costs reflect both growth in the portfolio and underlying inflation. While Suncorp continues to benefit from its preferred repairer network, cost increase
Slide 13: Investment performance
FY21 RESULTS PRESENTATION Moving now to investment performance. Our portfolio delivered strong returns, supported by the rebound in breakeven inflation and equities. I remind you that we have approximately 21% (or $2.2bn) of our technical reserves in ILB’s, designed to provide some hedge against inf
Slide 14: New Zealand result
FY21 RESULTS PRESENTATION Turning now to New Zealand. After consistently strong results over the past few years and strong top-line growth this year, profit has been impacted by higher natural hazard costs and lower investment income. GWP grew over 9.0%, led by the direct AA insurance channel, with
Slide 15: Natural hazards and reinsurance program
FY21 RESULTS PRESENTATION Natural hazard costs for the year exceeded our allowance by $60 million. While disappointing, this is in the context of the La Nina weather pattern, with a significant number of smaller events. Only one event resulted in a modest reinsurance recovery this year. We announced
Slide 16: Group underlying ITR
FY21 RESULTS PRESENTATION Now to the Group underlying ITR. As you know we seek to neutralise volatility of natural hazards, investment markets and reserve releases from this metric to provide a sense of the underlying performance of the business over time. I note, however, that some inherent volatil
Slide 17: Outlook
FY21 RESULTS PRESENTATION In this outlook we haven’t included the impact of the recent lockdowns on motor frequency given the level of uncertainty around this. 17
Slide 18: Banking result
FY21 RESULTS PRESENTATION Now to Banking, which delivered a profit of $419 million, reflecting a strong net interest margin and the release of some of our collective provision balance. Profit before impairments increased 4.6% to $550 million, reflecting improved net interest income and a stable cost
Slide 19: Bank lending portfolio credit quality
FY21 RESULTS PRESENTATION The credit quality of the bank’s lending portfolio remains strong, with 80% of the book in residential mortgages with a dynamic LVR of 61%. Past due loans have reduced over the year, but with an increase during the second half. The movement reflects typical seasonality from
Slide 20: Group expenses
FY21 RESULTS PRESENTATION Now to Group expenses which were $2.80 billion for the year, consistent with what we flagged at the recent investor series. Project costs have increased over the year, primarily due to the temporary step up in spending on strategic initiatives. The majority of spending this
Slide 21: Capital and CET1 movement
FY21 RESULTS PRESENTATION Finally, moving onto capital – and I’ve shown in this chart the movement in CET1 held at Group over the half. Steve has already talked to the key elements of capital management we are undertaking. In total, the Group will have declared almost $1.2 billion in capital returns
Slide 22: FY21 RESULTS PRESENTATION
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Slide 23: Proof points against the plan
FY21 RESULTS PRESENTATION Thanks Jeremy, I would like to take a moment now to highlight some of the key proof points that demonstrate our progress against the plan and the 12 key initiatives. In the Australian Insurance business, our activities to reinvigorate our brands, refine our customer value p
Slide 24: Purpose and value creation framework
FY21 RESULTS PRESENTATION However, achieving the financial outcomes embedded in the Plan relies on everyone at Suncorp understanding and living our purpose, and, in turn delivering for our customers and the communities we live and work in. This slide, which we first shared with the market at our inv
Slide 25: Natural hazard response and resilience
FY21 RESULTS PRESENTATION Nowhere has that Purpose been more apparent than in our response to the multiple natural hazard events we have managed over the last couple of years. In FY21 we dealt with 23 separate events, around 50,000 event claims and over $1 billion in natural hazard claims costs. On
Slide 26: Conclusion
FY21 RESULTS PRESENTATION So, in conclusion We are pleased with the results we have reported today They reflect the hard work and dedication of all Suncorp people. Collectively, they have rallied around our Purpose and focused on our customers. While the uncertainty from COVID is far from over, we h
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Slide 28: Closing remarks on vaccines
FY21 RESULTS PRESENTATION There being no further questions, let me briefly mention vaccines before we go. All members of the Board and the Australian based members of the ELT are either fully vaccinated or are awaiting their second dose. Jimmy is in the queue in New Zealand. I received my second dos
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