Slide 1: Financial results for the full year ended 30 June 2016
SUNCORP GROUP LIMITED ABN 66 145 290 124 DATA PA C K R E L E A S E DAT E 4 AU G U S T 2 01 6 For personal use only Financial results for the full year ended 30 June 2016 Create a better today
Slide 2: Highlights
Highlights For personal use only 1. Strategy reset to deliver value to customers 2. Operating model aligned to new strategy 3. Improvements in working claims to benefit UITR 4. Positive top line momentum 5. Building a more resilient business 2
Slide 3: Result Overview
Result Overview Diversified business model provides earnings stability For personal use only FY16 FY15 ($m) ($m) General Insurance 624 756 Bank 393 354 Suncorp Life 142 125 Business Lines NPAT 1,159 1,235 Other(1) (70) (44) Cash earnings 1,089 1,191 Acquisition amortisation (51) (58) Reported NPAT 1
Slide 4: FY16 Result Overview
FY16 Result Overview For personal use only FY16 FY15 ($m) ($m) 1,047 1,146 Natural Hazards (after tax) (511) (748) Investment Earnings (after tax) 298 436 Reserve Releases (after tax) 243 299 Restructure Provision (after tax) (39) - Reported NPAT 1,038 1,133 4
Slide 5: Strategy reset to deliver value to customers
1. Strategy reset to deliver value to customers For personal use only Create a better today Purpose ‘One Suncorp’ Business model Customer Strategy Capital Cost Culture Resilience Priority 5
Slide 6: The Suncorp Marketplace
The Suncorp Marketplace Needs Access For personal use only Contact Self Mobility Stores Centres Property Money Digital Brokers Enablers Solutions Banking Technology People Insurance & Wealth Third New Analytics Brands Parties Alternatives 6
Slide 7: Progress on Customer Strategy
Progress on Customer Strategy For personal use only • 1/3 of Suncorp’s customers are Connected Customers • Connected Customers have two or more need groups met • The retention rate for Connected Customers is 96% • Trov-Protect launched in April 2016 Trov-Protect AAMI Health New sources of value • Ne
Slide 8: Operating model aligned to New Strategy
2. Operating model aligned to New Strategy For personal use only 8
Slide 9: Improvements in Working Claims to benefit UITR
3. Improvements in Working Claims to benefit UITR For personal use only Home active claim volumes (‘000) Average home claim size $4,600 80 $4,500 60 $4,400 40 $4,300 $4,200 20 $4,100 $4,000 Jul 15 Sep 15 Nov 15 Jan 16 Mar 16 May 16 Jul 16 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Worki
Slide 10: Positive Top Line Momentum of 2.9%
4. Positive Top Line Momentum of 2.9% Growth remains solid across all business lines ($m) For personal use only Short Tail GWP Long Tail GWP +2.0% +1.2% 6,966 2,041 2,065 6,831 2,003 6,678 6,867 1,911 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Bank Lending Life In-Force Annual Premium +4.5% +6.4% 54,28
Slide 11: Building a more resilient business
5. Building a more resilient business New Natural Hazard Aggregate Cover in place for FY17 For personal use only • $300 million cover for natural hazards events greater than $5 million in size, once the total retained cost of these events reaches $460 million • Additional protection results in FY17
Slide 12: General Insurance
General Insurance Positive underwriting result, impacted by volatility in investment markets FY16 FY15 Change For personal use only ($m) ($m) (%) Key highlights GWP 9,031 8,872 1.8 • GWP growth across all Net earned premium 7,938 7,865 0.9 business units resulting in solid underlying growth Net incu
Slide 13: Gross Written Premium
Gross Written Premium Solid growth across all major classes FY16 Change For personal use only Products ($m) (%) Low single digit premium increases with stable Motor 2,858 2.9 retention Direct channel growth of 3.7% offset by a Home 2,585 1.8 reduction in intermediated channels 1.7% growth in Austral
Slide 14: Australian Personal Insurance GWP growth
Australian Personal Insurance GWP growth A turnaround achieved, driven by retention and targeted premium increases For personal use only 4.0% 2.6% 1.0% 0.6% (1.9%) (2.3%) (2.8%) 2H13 1H14 2H14 1H15 2H15 1H16 2H16 14
Slide 15: Gross Written Premium
Gross Written Premium Solid growth across all major classes FY16 Change For personal use only Products ($m) (%) Low single digit premium increases with stable Motor 2,858 2.9 retention Direct channel growth of 3.7% offset by a Home 2,585 1.8 reduction in intermediated channels 1.7% growth in Austral
Slide 16: Investment Assets
Investment Assets Total investment income of $355 million For personal use only Insurance Funds $9.8 billion Shareholder Funds $2.9 billion • Investment income of $254 million • Investment income of $101 million (FY15: $399 million) (FY15: $163 million) • $228 million MTM gain from a decrease in ris
Slide 17: Suncorp Bank
Suncorp Bank Another period of strong profitability For personal use only FY16 FY15 Change ($m) ($m) (%) Key highlights Net interest income 1,129 1,103 2.4 • 4.5% total lending growth Net non-interest income 88 107 (17.8) • NIM increased to 1.86% Total income 1,217 1,210 0.6 Total operating expenses
Slide 18: Evolution of the lending portfolio
Suncorp Bank Evolution of the lending portfolio For personal use only FY09 lending portfolio FY16 lending portfolio $54.4 billion $54.3 billion 2% 1% FY09 FY16 8% Exposures 121 1 10% over $50m 30% Margin 1.68% 1.86% 52% Impaired 81% $1,474m $150m assets 6% 10% Impairment $710m $16m losses Housing
Slide 19: Suncorp Life
Suncorp Life Improvement due to $21 million of positive claims and lapse experience For personal use only FY16 FY15 Change ($m) ($m) (%) Key highlights Planned profit margin release 45 38 18.4 • In-force premium growth Claims experience 6 8 (25.0) and benefits of repricing Lapse experience 15 7 114.
Slide 20: Capital Position
Capital Position Strong Bank and General Insurance capital ratios compared to targets and peers For personal use only Bank capital ratios General Insurance capital ratios 14.02% 14.08% 1.80x 13.53% 13.68% 1.72x 13.25% 1.67x 12.45% 12.66% CET1 Target CET1 (8.5% - Target 9.0% (0.95 - RWA) 1.15x PCA) 1
Slide 21: Medium Term Targets
Medium Term Targets For personal use only • Broadening of customer relationships • Cost base flat in FY17 and FY18 • Improving underlying NPAT • Sustainable ROE of at least 10%, which implies an underlying ITR of at least 12% • Maintaining a dividend payout ratio of 60% to 80% of cash earnings 21
Slide 22: Outlook
Outlook For personal use only ‘Create a better today’ • Australian economy still in transition • Global economy impacted by volatility • Suncorp is well positioned to drive growth and increase resilience • A ‘One Suncorp’ approach • Creating value for Connected Customers 22
Slide 23: Key Customer Initiatives for 2017
Key Customer Initiatives for 2017 Strengthening core business For personal use only • Customer Pathways Right • Pain point elimination • Efficiency Stretching core business Better • New customer access points • New propositions • New sources of revenue Strategic response Different • Individuals (not
Slide 24: Highlights
Highlights For personal use only 1. Strategy reset to deliver value to customers 2. Operating model aligned to new strategy 3. Improvements in working claims to benefit UITR 4. Positive top line momentum 5. Building a more resilient business 24
Slide 25: Data Pack
SUNCORP GROUP LIMITED ABN 66 145 290 124 DATA PA C K R E L E A S E DAT E 4 AU G U S T 2 01 6 For personal use only Financial results for the full year ended 30 June 2016 Create a better today Data Pack
Slide 26: Suncorp Group
Suncorp Group Leading financial services brands in Australia and New Zealand For personal use only Top 20 ASX listed company $16 billion market capitalisation at 30 June 2016 $96 billion in group assets 13,500 employees in Australia and New Zealand Approximately 9 million customers End-to-end owners
Slide 27: Suncorp's shareholder promise
Suncorp’s shareholder promise Simplified, de-risked financial services group For personal use only Yield Growth • Dividend payout ratio of 60% to • Efficiency-led profit growth 80% • Multi-brand, multi-channel • Strategy focused exclusively in approach providing greater value Australia and New Zeala
Slide 28: Suncorp's strategy
Suncorp’s strategy For personal use only Create a better today Purpose ‘One Suncorp’ Business model Customer Strategy Capital Cost Culture Resilience Priority 28
Slide 29: Create a better today
Create a better today For personal use only For our Customers For our Shareholders For our People For our Communities For our Industry For our Economy Customers with solutions A resilient business that Our people are inspired We are an integral part of Our clear focus on providing A stable company t
Slide 30: Suncorp's strategic assets
Suncorp’s strategic assets Our focus For personal use only • Creating value for our customers Customer • Broadening the connection with the Group’s nine million customers by deepening their relationships with the Group’s brands • Demonstrating a diversification benefit through Group Risk Based Capit
Slide 31: Suncorp's operating model
Suncorp’s operating model A management structure to deliver a ‘One Suncorp’ approach For personal use only 31
Slide 32: Suncorp's marketplace approach
Suncorp’s marketplace approach For personal use only + • Engaging customers through omni-channel • Curating solutions that customers care about + + Needs • Enabling customers to navigate and make informed decisions + 32
Slide 33: Connected Customers
Connected Customers For personal use only Broadening and deepening Increasing frequency customer relationships of interactions + + Property Meeting more needs Mobility & + + Self Money 33
Slide 34: Our strategy to grow Connected Customers
Our strategy to grow Connected Customers For personal use only Customer Marketplace Experience Brands Deep insights Curate solutions Seamless experience Reposition master brand Priority segments Omni-channel Simplified journeys Distinct and complementary New propositions Customer navigation Personal
Slide 35: Dividends
Dividends 68 cent total dividend, cash earnings payout ratio of 80% For personal use only 105 88 30 75 12 68 55 20 40 38 15 38 35 35 30 20 20 20 35 38 25 30 15 15 20 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Interim Final Special 35
Slide 36: Suncorp Group business line NPAT
Suncorp Group business line NPAT ($m) Diversification of earnings For personal use only 600 834 84 1,235 120 1,159 770 228 113 289 124 146 354 393 289 1,010 883 756 493 624 105 8 12 18 (263) (60) (496) (632) FY12 FY13 FY14 FY15 FY16 ■ General Insurance ■ Non-core Bank / Life write ■ Life underlying
Slide 37: Shareholder metrics
Shareholder metrics For personal use only FY13 FY14 FY15 FY16 EPS (basic) $0.89 $0.81 Numerator ($m) $0.57 Earnings (EPS basic) 491 730 1,133 1,038 $0.38 Interest expense on CPS - - 45 43 (net of tax) FY13 FY14 FY15 FY16 Earnings (EPS diluted) 491 730 1,178 1,081 Denominator (m) EPS (diluted) $0.87
Slide 38: Shareholder metrics
Shareholder metrics For personal use only FY13 FY14 FY15 FY16 Cash EPS (basic) Numerator ($m) $1.02 $0.93 $0.85 Earnings (EPS basic) 576 1,304 1,191 1,089 $0.45 Interest expense on CPS - 31 45 43 (net of tax) FY13 FY14 FY15 FY16 Earnings (EPS diluted) 576 1,335 1,236 1,132 Denominator (m) Cash EPS (
Slide 39: Shareholder metrics
Shareholder metrics For personal use only FY13 FY14 FY15 FY16 ROE ROE 8.5% 7.8% 5.3% Earnings ($m) 491 730 1,133 1,038 3.5% Average shareholders’ equity ($m) 14,118 13,868 13,345 13,282 FY13 FY14 FY15 FY16 Cash ROE Cash ROE 9.4% 8.9% 8.2% Cash Earnings ($m) 576 1,304 1,191 1,089 4.1% Average shareho
Slide 40: Suncorp's shareholder overview
Suncorp’s shareholder overview For personal use only SUN shareholders by type SUN shareholders by geography Australia 73% Domestic (Institutions & Retail) Institutions 37% United States 12% Retail United Kingdom 6% Investors 36% Hong Kong 3% International Japan 1% Institutions 27% Europe (ex UK) 4%
Slide 41: Positive top line momentum of 2.9%
Positive top line momentum of 2.9% FY16 Change For personal use only Personal Insurance GWP Insurance ($m) (%) by direct channels ($m) Motor GWP 2,858 2.9 Home GWP 2,585 1.8 4,408 Commercial GWP 2,079 0.0 CTP GWP 1,215 9.2 +2.8% Workers Compensation and other GWP 294 (19.0) Total GWP 9,031 1.8 Austr
Slide 42: Operating expenses
Operating expenses ($m) Stable over time For personal use only 1,354 1,349 1,366 1,344 1,360 1,309 150 153 142 139 142 139 305 319 322 324 326 313 899 877 902 881 892 857 1H14 2H14 1H15 2H15 1H16 2H16 General Insurance Bank Life 42
Slide 43: Capital position
Capital position SGL, Corp FY16 FY15 For personal use only GI (2) Bank (2) Life Services & Consol Total Total CET1 2,827 2,896 467 148 6,338 6,629 CET1 Target 2,445 2,753 357 (3) 5,552 5,416 Excess to CET1 Target (pre div) 382 143 110 151 786 1,213 Group Dividend (3) (440) (643) Group Excess to CET1
Slide 44: CET1 Capital Base - FY16 movements
CET1 Capital Base - FY16 movements ($m) For personal use only 1,038 163 146 74 128 73 826 98 100 570 346 Excess CET1 FY16 NPAT GI excess GI PCA Bank growth Life policy Bank Project SGL Target Other FY16 Excess CET1 FY15 technical (Insurance liability Ignite change including Dividends FY16 provisions
Slide 45: Group Risk Based Capital
Group Risk Based Capital Capital volatility by key risk type For personal use only Suncorp Group GI Bank 3% 3% 11% 27% 3% 21% 65% 73% 8% 24% Life Corporate 62% 7% 14% 36% 57% 86% ■ Insurance Risk ■ Operational Risk ■ Market Risk ■ Counterparty Credit Risk 45
Slide 46: Capital instruments
Capital instruments Outstanding at 30 June 2016 For personal use only 30 JUNE 2016 Total Regulatory Semi-annual coupon rate / Optional Call / Balance Capital Issue Date GI Bank Life SGL margin above 90 day BBSW Exchange Date $M $M $M $M $M $M AAIL Subordinated Debt* 330 bps Nov 2020 Nov 2015 225 - -
Slide 47: Suncorp projects key milestones
Suncorp projects key milestones On track and delivering For personal use only Project 2H16 FY17 RepairLink rationalisation • 5 new SMART repair centres Motor claims 1 new SMART site • 168,000 repairs via SMART network 4 SMARTPlus sites • Repair network rationalised New platform in and operat
Slide 48: General Insurance
SUNCORP GROUP LIMITED ABN 66 145 290 124 DATA PA C K R E L E A S E DAT E 4 AU G U S T 2 01 6 For personal use only Financial results for the full year ended 30 June 2016 Create a better today General Insurance
Slide 49: General Insurance P&L
General Insurance P&L FY16 FY15 Change For personal use only ($m) ($m) (%) Key highlights GWP 9,031 8,872 1.8 • GWP growth across all Net earned premium 7,938 7,865 0.9 business units resulting in solid underlying growth Net incurred claims (5,661) (5,587) 1.3 • Underlying ITR of 10.6% Operating exp
Slide 50: General Insurance underlying and reported ITR
General Insurance underlying and reported ITR Impacted by claims inflation and lower investment yields For personal use only 18.6% 17.0% 14.0% 14.8% 14.6% 13.1% 13.4% 13.6% 13.9% 14.7% 11.0% 12% 12.8% 10.1% 11.1% 11.1% 9.9% 10.3% 9.4% 7.8% 3.8% 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 Repor
Slide 51: General Insurance Key ratios
General Insurance Key ratios For personal use only Loss ratio Total operating expenses ratio 71.0% 71.3% 24.0% 23.0% 22.6% 67.8% 22.0% 67.4% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Acquisition expenses ratio Other underwriting expenses ratio 14.3% 14.4% 11.2% 13.8% 9.2% 8.3% 12.8% 7.6% FY13 FY14 FY1
Slide 52: Total GWP of $9.0 billion - by product
General Insurance Total GWP of $9.0 billion - by product For personal use only Total GI portfolio Australia New Zealand 3% $7.8 billion $1.2 billion 3% 3% 13% 16% 24% 32% 33% 41% 20% 23% 32% 28% ■ Motor ■ CTP 29% ■ Home ■ Workers compensation & other ■ Commercial 52
Slide 53: Total GWP of $9.0 billion - by geography
General Insurance Total GWP of $9.0 billion - by geography For personal use only 3% 13% 2% 25% QLD 3% WA $2.2b 6% up 0.5% $0.6b SA down 12.2% $0.3b up 1.2% NSW 19% 29% $2.6b up 1.8% VIC $1.2b $1.7b up 1.9% NZ ■ Queensland ■ South Australia ACT & OTHER up 6.5% ■ New South Wales ■ Tasmania $0.2b ■ Vic
Slide 54: General Insurance reserve releases
General Insurance reserve releases Conservative assumptions and proactive long-tail claims management For personal use only $427m 5.4% $347m 4.4% $166m Long-term assumption of 1.5% of NEP 2.4% $105m $109m 1.4% 1.4% FY12 FY13 FY14 FY15 FY16 54
Slide 55: General Insurance reserve releases - continued releases
General Insurance reserve releases Continued releases For personal use only Management Benign wage Building Blocks Simplification have reduced and delivered one reduced legal superimposed settlements and claims system costs inflation duration Optimised claims processes Reserve releases well above 1.
Slide 56: FY16 natural hazards
General Insurance FY16 natural hazards Date Event Net costs ($m) For personal use only Aug 2015 South Coast NSW and Sydney Storms 29 Sep 2015 NSW Central Coast Hail 21 Oct 2015 Fernvale Chinchilla Hail 41 Nov 2015 Sunnybank Hail 15 Nov 2015 Darling Downs Storms 23 Dec 2015 Kurnell Tornado 57 Dec 201
Slide 57: Year history of major weather events
General Insurance 50 year history of major weather events For personal use only Christchurch earthquakes, Brisbane floods, Cyclone 6,000 AUS NZ Long run average Yasi, Melbourne Hailstorm 5,000 Cyclone Marcia and Hunter Valley NSW Low storm Storms 4,000 Brisbane flood, Cyclone Tracy Newcastle Melbour
Slide 58: General Insurance FY17 reinsurance program
General Insurance FY17 reinsurance program Conservative balance sheet and P&L protection For personal use only 6.9b 6.1b 2.5b 500m Original cover Reinstatement Reinstatement Reinstatement 250m 200m Dropdown aggregate Dropdown aggregate 50m Retention Natural hazard protection 58
Slide 59: General Insurance FY17 reinsurance program
General Insurance FY17 reinsurance program Drop-down aggregate program fully placed and $300 million of natural hazard protection For personal use only 250m 50m xs 200m xs 50m 200m 100m xs 100m xs 150m xs 200m 150m xs 300m 150m 100m xs 100m xs 50m xs 200m 50m xs 300m 50m Natural hazard protection Re
Slide 60: General Insurance investment asset allocation
General Insurance investment asset allocation Insurance funds Shareholders’ funds For personal use only $9.8 billion $2.9 billion 3% <1% 4% 1% 4% 8% 7% 8% 1% 14% 17% 16% 15% 17% 18% 2% 6% 24% 10% 18% 81% 74% 70% 67% 56% 59% FY14 FY15 FY16 FY14 FY15 FY16 ■ Corporate bonds ■ Cash and short-term deposi
Slide 61: General Insurance investment asset credit quality
General Insurance investment asset credit quality Fixed income holdings in Insurance and Shareholders’ funds For personal use only 3.1% 5.3% 7.4% 18.2% 25.6% 28.8% 29.1% 29.8% 28.0% 49.6% 39.3% 35.8% FY14 FY15 FY16 AAA AA A BBB 61
Slide 62: General Insurance capital
General Insurance capital Total capital Prescribed Capital Amount Capital ratios vs Peers For personal use only (PCA) 1.80x 3,890 1.67x 1.72x 1.67x PCA 553 510 2,328 CET1 Target 298 (0.95 - 1.15x PCA) 782 250 1.21x 1.23x 1.22x 2,827 556 917 (475) SUN Peer 1 Peer 2 ■ Common Equity Tier 1 ■ Outstandin
Slide 63: Personal Insurance
For personal use only Personal Insurance
Slide 64: Personal Insurance P&L
Personal Insurance P&L For personal use only FY16 FY15 Change ($m) ($m) (%) Key highlights GWP 4,787 4,713 1.6 • 1.6% GWP growth Net earned premium 4,242 4,275 (0.8) in a competitive market Net incurred claims (3,219) (3,253) (1.0) • Direct channels achieved premium increases with flat Acquisition e
Slide 65: Personal Insurance $4.8 billion total GWP
Personal Insurance $4.8 billion total GWP For personal use only Portfolio by geography Portfolio by product 2% 2% <1% 4% 6% 26% 46% 28% 54% 32% ■ Queensland ■ South Australia ■ Motor ■ Other ■ New South Wales ■ Tasmania ■ Home ■ Victoria ■ Other ■ Western Australia 65
Slide 66: Personal Insurance Key ratios
Personal Insurance Key ratios For personal use only Loss ratio Total operating expenses ratio 76.1% 75.9% 21.4% 19.8% 68.2% 66.9% 18.8% 18.1% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Acquisition expenses ratio Other underwriting expenses ratio 11.4% 11.5% 10.4% 11.2% 11.0% 8.4% 7.6% 6.6% FY13 FY14 FY
Slide 67: Personal Insurance Market share
Personal Insurance Market share For personal use only NT 23% 17% QLD WA 33% 34% 16% 13% SA 15% 16% 28% 26% NSW VIC 37% 32% ■ Motor ■ Home 41% 41% Source: Roy Morgan TAS 67 data as at May 2016
Slide 68: Personal Insurance Market share
Personal Insurance Market share For personal use only Total portfolio Home Motor $17.0 billion $8.2 billion $8.9 billion 26% 27% 27% 26% 23% 29% 5% 4% 3% 4% 3% 7% 27% 2% 7% 31% 3% 6% 5% 6% 29% ■ Suncorp ■ Peer 4 ■ Peer 1 ■ Peer 5 ■ Peer 2 ■ Others ■ Peer 3 Source: Roy Morgan 68 data as at May 2016
Slide 69: Personal Insurance New business by distribution channel
Personal Insurance New business by distribution channel For personal use only 6% 94% ■ Direct ■ Intermediaries 69
Slide 70: Commercial Insurance
For personal use only Commercial Insurance
Slide 71: Commercial Insurance P&L
Commercial Insurance P&L For personal use only FY16 FY15 Change ($m) ($m) (%) Key highlights GWP 3,016 2,954 2.1 • 2.1% GWP growth due to Net earned premium 2,651 2,620 1.2 disciplined growth in selected product lines Net incurred claims (1,880) (1,810) 3.9 • CTP delivered strong Acquisition expense
Slide 72: Commercial Insurance $3.0 billion total GWP
Commercial Insurance $3.0 billion total GWP For personal use only Portfolio by geography Non-statutory portfolio Statutory portfolio $1.6 billion $1.4 billion 2% 2% 6% 16% 9% 30% 32% 4% 41% 40% 12% 40% 29% 37% ■ Queensland ■ South Australia ■ Commercial (SME & mid-market) ■ QLD CTP ■ New South Wales
Slide 73: Commercial Insurance Key ratios
Commercial Insurance Key ratios For personal use only Loss ratio Total operating expenses ratio 73.0% 25.3% 70.9% 24.8% 24.9% 69.3% 69.1% 24.4% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Acquisition expenses ratio Other underwriting expenses ratio 13.1% 15.8% 15.8% 14.4% 10.4% 9.1% 8.6% 12.2% FY13 FY14
Slide 74: Commercial Insurance Market share
Commercial Insurance Market share For personal use only Total portfolio Non-statutory Statutory $18.2 billion $12.9 billion $5.3 billion 17% 4% 12% 9% 24% 30% 28% 18% 18% 18% 7% 6% 18% 20% 23% 13% 14% 21% ■ Suncorp ■ Peer 3 ■ Peer 1 ■ Peer 4 ■ Peer 2 ■ Others Source: Latest Suncorp estimates 74
Slide 75: Market share - statutory products
Commercial Insurance Market share - statutory products For personal use only CTP Workers compensation $3.6 billion $1.7 billion 3% 5% 18% 18% 32% 20% 6% 21% 15% 23% 17% 22% ■ Suncorp ■ Peer 3 ■ Peer 1 ■ Peer 4 ■ Peer 2 ■ Others Source: Latest Suncorp estimates 75
Slide 76: Market share - CTP
Commercial Insurance Market share - CTP For personal use only QLD NSW ACT $1.2 billion* $2.3 billion* $170 million** 8% 4% 23% 16% 22% 40% 49% 60% 18% 27% 33% ■ Suncorp ■ Peer 3 Source: State Scheme Regulators ■ Peer 1 ■ Peer 4 *data as at March 2016 ■ Peer 2 ■ Peer 5 76 **data as at June 2016
Slide 77: New business by distribution channel - non-statutory portfolio
Commercial Insurance New business by distribution channel - non-statutory portfolio For personal use only 4% 12% 84% ■ Direct ■ Resilium ■ Intermediaries Data not adjusted for unclosed business 77
Slide 78: New Zealand Insurance
For personal use only New Zealand Insurance
Slide 79: New Zealand Insurance P&L
New Zealand Insurance P&L For personal use only FY16 FY15 Change ($m) ($m) (%) Key highlights GWP 1,228 1,205 1.9 • 1.9% GWP increase as a Net earned premium 1,045 970 7.7 result of strong growth across both direct and Net incurred claims (562) (524) 7.3 intermediated channels Acquisition expenses (
Slide 80: New Zealand Insurance $1.2 billion total GWP
New Zealand Insurance $1.2 billion total GWP For personal use only Portfolio by product Portfolio by channel 3% 19% 24% 41% 49% 32% 32% ■ Motor ■ Commercial ■ Direct ■ Strategic partners & ■ Home ■ Other ■ Brokers financial intermediaries 80
Slide 81: New Zealand Insurance Key ratios
New Zealand Insurance Key ratios For personal use only Loss ratio Total operating expenses ratio 57.6% 55.8% 35.3% 54.0% 53.8% 33.4% 33.4% 32.4% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Acquisition expenses ratio Other underwriting expenses ratio 26.0% 23.5% 24.0% 9.9% 23.0% 9.3% 9.4% 9.4% FY13 FY14
Slide 82: New Zealand Insurance Market share
New Zealand Insurance Market share Total portfolio For personal use only NZ$5.2 billion 18% 20% 5% 5% 7% 45% ■ Peer 1 ■ Vero (SUN) ■ Peer 2 Source: Insurance Council New Zealand ■ AAI (SUN) ■ Peer 3 data as at March 2016 ■ Others 82
Slide 83: Suncorp Bank
SUNCORP GROUP LIMITED ABN 66 145 290 124 DATA PA C K R E L E A S E DAT E 4 AU G U S T 2 01 6 For personal use only Financial results for the full year ended 30 June 2016 Create a better today Suncorp Bank
Slide 84: Suncorp Bank P&L
Suncorp Bank P&L For personal use only FY16 FY15 Change ($m) ($m) (%) Key highlights Net interest income 1,129 1,103 2.4 • 4.5% total lending growth Net non-interest income 88 107 (17.8) • NIM increased to 1.86% Total income 1,217 1,210 0.6 • Cost to income ratio reduced to 52.5% Total operating exp
Slide 85: Total lending assets $54.3 billion
Suncorp Bank Total lending assets $54.3 billion For personal use only Lending assets by portfolio Lending assets by geography 1% 8% 4% 7% 10% 10% 54% 81% 25% ■ Queensland ■ Western Australia ■ Housing ■ Agribusiness ■ New South Wales ■ Other ■ Commercial (SME) ■ Consumer ■ Victoria 85
Slide 86: Suncorp Bank Key ratios
Suncorp Bank Key ratios Lending growth (annualised) Net interest margin Cost to income ratio For personal use only (interest-earning assets) 4.55% 59.20% 3.93% 1.85% 1.86% 3.65% 57.40% 1.72% 1.64% 53.39% 52.51% 0.77% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Impairment losses to gr
Slide 87: Home lending assets $44.3 billion
Suncorp Bank Home lending assets $44.3 billion For personal use only Portfolio by borrower type Portfolio by geography Portfolio by channel 3% 8% 30% 11% 35% 50% 65% 70% 28% ■ Owner occupied ■ Investor ■ Queensland ■ Victoria ■ Direct ■ Intermediaries ■ New South Wales ■ Western Australia & ACT ■ Ot
Slide 88: Commercial (SME) assets $5.4 billion
Suncorp Bank Commercial (SME) assets $5.4 billion For personal use only Portfolio by industry Portfolio by geography Portfolio by exposure size 12% 11% 11% 5% 35% 14% 7% 20% 53% 18% 75% 16% 15% 8% ■ Property investment ■ Retail ■ Queensland ■ < $5 million ■ $10-$25 million ■ Hospitality & accommodat
Slide 89: Agribusiness assets $4.4 billion
Suncorp Bank Agribusiness assets $4.4 billion For personal use only Portfolio by industry Portfolio by geography Portfolio by exposure size 10% 6% 16% 3% 29% 3% 25% 29% 49% 8% 61% 10% 20% 31% ■ Beef ■ Sugar ■ Queensland ■ < $5 million ■ $10-$25 million ■ Grain & mixed farming ■ Fruit ■ New South Wal
Slide 90: Credit quality - gross impaired and past due loans
Suncorp Bank Credit quality – gross impaired and past due loans For personal use only Gross impaired loans by segment ($m) Past due home loans (% gross home loans) 333 0.98% 99 0.93% 218 0.78% 0.79% 206 0.74% 0.69% 62 62 208 125 117 0.05% 26 31 27 0.03% FY14 FY15 FY16 1H14 2H14 1H15 2H15 1H16 2H16 ■
Slide 91: Home lending assets by LVR
Suncorp Bank Home lending assets $44.3 billion For personal use only Home lending assets by LVR Home lending new business by LVR 9% 7% 5% 3% 2% 1% 17% 15% 12% 12% 17% 10% 10% 13% 26% 12% 22% 22% 23% 24% 22% 12% 22% 8% 83% 87% 88% 86% 64% 66% 69% 71% 66% 71% 61% 62% 1H14 2H14 1H15 2H15 1H16 2H16 1H14
Slide 92: Credit quality - impairments
Suncorp Bank Credit quality - impairments For personal use only Impairment losses to gross loans Net impaired loans to gross loans 0.43% 0.32% 0.29% 0.30% 0.29% 0.21% 0.28% 0.26% 0.17% 0.17% 0.14% 0.20% 0.09% 0.03% SUN Regional Regional Major 1 Major 2 Major 3 Major 4 SUN Regional Regional Major 1 M
Slide 93: Asset growth and credit quality
Suncorp Bank Asset growth and credit quality For personal use only Commercial (SME) portfolio Agribusiness portfolio 5,772 12.00% 4,624 12.00% 5,531 5,353 5,356 4,400 4,360 10.00% 4,311 10.00% 8.00% 8.00% 4.50% 3.22% 2.83% 6.00% 6.00% 2.68% 1.16% 1.16% 0.92% 0.88% 4.00% 4.00% 2.00% 2.00% 0.00% 0.00%
Slide 94: Long-term funding profile
For personal use only 200 400 600 800 1,000 1,200 1,400 0 Aug 16 Oct 16 Dec 16 Feb 17 Apr 17 Jun 17 Suncorp Bank Aug 17 Covered bond Oct 17 Dec 17 Feb 18 Long-term funding profile ($m) Apr 18 Jun 18 Aug 18 Oct 18 Dec 18 Feb 19 Apr 19 Jun 19 Domestic senior unsecured Aug 19 Oct 19 Dec 19 Feb 20 Apr 2
Slide 95: Market share by product
Suncorp Bank Market share by product For personal use only Total deposits Retail deposits Business deposits Business lending 2.0% 2.5% 1.7% 1.3% Mortgage lending Mortgage lending Mortgage lending Consumer lending (Owner occupied) (Investor) 2.9% 3.0% 2.3% 0.3% Source: APRA 95 data as at June 2016
Slide 96: Retail banking market share
Suncorp Bank Retail banking market share For personal use only NT QLD 0.2% 15 WA 122 9 9.1% 9 0.5% 1 SA 512 1 135 0.2% 1 40 NSW & 133 0.9% ACT 2 Branch 331 Business centre VIC ATM 9 0.5% 1 1 0.3% TAS 473 Market share data source: Roy Morgan 41 96 all data as at June 2016
Slide 97: Suncorp Bank capital
Suncorp Bank capital Total capital Risk weighted assets Capital ratios vs Peers For personal use only 4,255 31,459 14.02% 14.08% 13.68% 13.53% 13.25% 13.53% 12.45% 12.66% 3,351 909 RWA 108 CET1 450 Target 9.21% (8.5% - 9.0% RWA RWA) 28,000 10.47% 10.24% 9.81% 2,896 9.69% 9.21% 8.80% 8.24% 2H16 2H16
Slide 98: Suncorp Life
SUNCORP GROUP LIMITED ABN 66 145 290 124 DATA PA C K R E L E A S E DAT E 4 AU G U S T 2 01 6 For personal use only Financial results for the full year ended 30 June 2016 Create a better today Suncorp Life
Slide 99: Suncorp Life P&L
Suncorp Life P&L For personal use only FY16 FY15 Change ($m) ($m) (%) Key highlights Planned profit margin release 45 38 18.4 • In-force premium growth Claims experience 6 8 (25.0) and benefits of repricing Lapse experience 15 7 114.3 • Sustainable growth as in- force premiums increased Other experi
Slide 100: In-force portfolio - $1 billion
Suncorp Life In-force portfolio - $1 billion For personal use only Portfolio by product Portfolio by geography Portfolio by channel 7% 10% 3% 21% 28% 47% 21% 25% 7% 10% 63% 6% 20% 18% 14% ■ Term & TPD ■ Other ■ Queensland ■ Other ■ Direct via GI ■ New Zealand ■ Trauma ■ Group ■ New South Wales ■ New
Slide 101: New business - $97 million
Suncorp Life New business - $97 million For personal use only Portfolio by product Portfolio by geography Portfolio by channel 8% 7% 24% 24% 20% 24% 4% 52% 57% 9% 21% 15% 17% 18% ■ Term & TPD ■ Disability income ■ Queensland ■ Other ■ Direct via GI ■ New Zealand ■ Trauma ■ Other ■ New South Wales ■
Slide 102: Suncorp Life Key metrics
Suncorp Life Key metrics ($m) For personal use only Planned margins Claims and lapse experience 99 15 21 69 38 45 -47 -50 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Total operating expenses Value of One Year’s Sales 303 43 291 25 25 281 281 11 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 102
Slide 103: Market share - Individual risk (Australia)
Suncorp Life Market share - Individual risk (Australia) For personal use only In-force portfolio Annual new business $9.3 billion $1.1 billion 21% 15% 14% 14% 14% 14% 14% 13% 11% 11% 10% 9% 8% 8% 7% 7% 5% 5% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 SUN Peer 7 Others Peer 1 Peer 2 Peer 3 Peer 4 Peer
Slide 104: Market share by distribution channel
Suncorp Life Market share by distribution channel For personal use only Direct Bank 36% 33% $1.0 billion $2.4 billion 32% 20% 18% 18% 8% 6% 5% 4% 3% 3% 2% 3% 2% 3% 2% 2% Peer 1 Peer 2 SUN Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Others Peer 1 Peer 2 Peer 3 Peer 4 SUN Peer 5 Peer 6 Peer 7 Others Source: NM
Slide 105: Market share by distribution channel
Suncorp Life Market share by distribution channel For personal use only IFA Group $5.9 billion $6.6 billion 25% 25% 21% 15% 12% 13% 11% 10% 10% 9% 8% 8% 8% 8% 7% 5% 4% 1% Peer 1 Peer 2 Peer 3 Peer 4 SUN Peer 5 Peer 6 Peer 7 Others Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 SUN Others Source: N
Slide 106: Suncorp Life capital
Suncorp Life capital Total capital For personal use only Prescribed Capital Amount (PCA) 567 2.18x PCA 100 260 19 467 41 37 119 59 2H16 (15) ■ Common Equity Tier 1 ■ Insurance risk ■ Combined stress ■ Tier 2 ■ Asset risk 2H16 scenario adjustment ■ Operational risk ■ Other regulatory ■ Aggregation be
Slide 107: Economy
SUNCORP GROUP LIMITED ABN 66 145 290 124 DATA PA C K R E L E A S E DAT E 4 AU G U S T 2 01 6 For personal use only Financial results for the full year ended 30 June 2016 Create a better today Economy
Slide 108: Favourable economic fundamentals
Favourable economic fundamentals Australian economic growth Other supportive key metrics For personal use only 4.0 Australia Queensland Data as at: Annual % change Source: Consensus Economics 3.5 3.0 Population Growth (pa) 1.4% 1.3% Dec 15 2.5 Unemployment Rate 5.8% 6.5% Jun 16 2.0 1.5 Inflation 1.3
Slide 109: Monetary policy is supporting activity
Monetary policy is supporting activity Inflation & interest rates Lending growth For personal use only 8 11 Annual % change % Source: ABS, RBA, Bloomberg 7 9 6 7 5 5 4 3 3 Inflation target range 1 2 -1 Source: RBA 1 -3 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 Feb
Slide 110: Residential building and the labour market
Residential building and the labour market Building approvals Labour market For personal use only 240 Source: ABS, Bloomberg, Suncorp 12 80 6.4 Annual approvals per '000 Change per month ('000) 220 of population (RHS) 11 60 6.1 200 Annual Approvals 10 40 (‘000) (LHS) 5.8 180 9 20 5.5 160 8 0 5.2 140
Slide 111: Economic confidence and exports
Economic confidence and exports Confidence indicators Shifting export trends For personal use only 115 Business conditions (RHS) 15 6,000 $m 17,000 Index $m Consumer sentiment (LHS) 110 10 5,750 Service Exports 16,000 Metal and Mining Exports (RHS) 5,500 (LHS) 15,000 105 5 5,250 14,000 100 0 5,000 1
Slide 112: Household financial conditions
Household financial conditions Debt and debt servicing House prices For personal use only 200 14 900 % % Median House Price ($ '000) 190 12 800 180 10 700 170 8 600 160 6 500 150 4 400 140 2 130 0 300 Source: Bloomberg, ABS Source: RBA 120 -2 200 Mar 01 Mar 06 Mar 11 Mar 16 Mar 06 Mar 08 Mar 10 Mar
Slide 113: Queensland prospects
Queensland prospects State economic growth Queensland building approvals For personal use only 60,000 18 Source: ABS, Bloomberg, Suncorp 55,000 16 Annual 50,000 approvals (LHS) 14 45,000 3.9% 12 2.3% 40,000 10 0.8% 35,000 2.1% 8 30,000 25,000 6 Annual approvals per '000 2.6% of population (RHS) Gros
Slide 114: Glossary
SUNCORP GROUP LIMITED ABN 66 145 290 124 DATA PA C K R E L E A S E DAT E 4 AU G U S T 2 01 6 For personal use only Financial results for the full year ended 30 June 2016 Create a better today Glossary
Slide 115: Glossary
Glossary Acquisition expense ratio Acquisition expenses expressed as a percentage of net earned premium For personal use only APRA Australian Prudential Regulation Authority Cash earnings Net profit after tax adjusted for the amortisation of acquisition intangible assets, the profit or loss on dives
Slide 116: Glossary
Glossary Deposit to loan ratio Total retail deposits divided by total loans and advances, excluding other receivables For personal use only Diluted shares Diluted shares is based on the weighted average number of ordinary shares outstanding during the period adjusted for potential ordinary shares th
Slide 117: Glossary
Glossary Net profit after tax Net profit after tax attributable to owners of the Company derived in accordance with Australian Accounting Standards For personal use only Other underwriting expenses ratio Other underwriting expenses expressed as a percentage of net earned premium Past due loans Loans
Slide 118: Important disclaimer
Important disclaimer For personal use only This report contains general information which is current as at 4 August 2016. It is information given in summary form and does not purport to be complete. It is not a recommendation or advice in relation to the Group or any product or service offered by Su
Slide 119: Contact and investor relations details
For personal use only TO S E E M O R E , G O O N L I N E suncorpgroup.com.au R E G I ST E R E D O F F I C E Level 28, 266 George Street Brisbane, Qld Australia 4000 +61 7 3362 1222 I N V E STO R R E L AT I O N S C O N TAC T S Mark Ley Ph: 02 8121 1221 Andrew Dempster Ph: 02 8121 9206 Amanda Caucino