Slide 1: Welcome to Suncorp FY16 results
For personal use only Good morning and welcome to Suncorp’s financial results for the full year ended 30 June 2016. I’d like to acknowledge the traditional owners of the land that we meet on here today, the Gadigal (Gadi‐gall) people, and pay my respects to Aboriginal and Torres Strait Islander peop
Slide 2: CEO introduction
For personal use only • Thank you Mark. • Good morning everyone, and thank you for joining us today. • In the last six months, – we reset our strategy to deliver value to our customers – aligned the operating model to the new strategy, and – worked hard to achieve improvements in working claims as w
Slide 3: Group NPAT result and dividends
For personal use only • The NPAT result of $1,038 million reflects lower returns from investment markets and a reduction in reserve releases. • Our Bank delivered 11% growth in NPAT and the Life business 14% growth, highlighting the quality of these businesses and the benefits of diversification. •
Slide 4: Major items in the result
For personal use only • Included in the Result are a number of major items: – On an after tax basis, the impact of natural hazards was $237 million lower than the prior year, and – Investment earnings in General Insurance and Life were $138 million lower and – While Reserve releases were still well
Slide 5: Suncorp strategy
For personal use only • Suncorp’s strategy is now well understood externally and internally. • Our Marketplace approach will connect more customers to Suncorp by providing access to all products, all services and all brands through any channel. • Elevating the customer, and aligning our cost base wi
Slide 6: Marketplace strategy
For personal use only • The Marketplace strategy breaks customer’s Needs into four Groups: — Self – health and wellbeing — Mobility – buying and protecting your car — Property – buying and protecting property assets — Money – liquidity, longevity and transactions • We provide Access for our customer
Slide 7: New solutions and propositions
For personal use only • Since our last update, we’ve made good progress in introducing new solutions and propositions into our target markets. • We launched Trov in April, launched the Shannons Club app in June, and will shortly be announcing an exciting new health offer. • Also new, will be the 9Sp
Slide 8: One Suncorp operating model
For personal use only • Our new organisational structure was completed on 4 July. • It’s more than just a new structure, ‘One Suncorp’ is an operating model to drive the customer strategy. • By creating a single Customer Experience function and one Customer Platform function for the Group, we have p
Slide 9: Restoring underlying insurance trading ratio
For personal use only • We are working intensely towards returning UITR to 12%. • Home claims volumes and average claim costs have reduced since December 2015. • In motor, active claims volumes have also reduced with an increase in the number of vehicles repaired in the SMART shops each month. We no
Slide 10: Top line growth across the Group
For personal use only • We have delivered growth of 2.9% across the Group despite a period of significant change. • I’m pleased with the positive top line momentum, particularly in motor at 2.9% and home at 1.8%. • Bank lending growth was 4.5% while maintaining credit quality and margin, and • The L
Slide 11: Reinsurance aggregate cover
For personal use only • Reinsurance has traditionally protected our capital position but still allowed volatility in earnings, particularly from the accumulation of medium sized events. • A new aggregate cover for $300 million for events greater than $5 million is now in place. It applies after the
Slide 12: General Insurance result
For personal use only • Thanks Michael and good morning everyone. • Today I’ll start with our General Insurance business and Michael has touched on some of the progress we are making in remediating the claims issues. At the top line, we have spoken about a stabilisation in key markets and we are ple
Slide 13: Gross written premium trends
For personal use only • Looking specifically at the premium trends and this slide shows written premium of just over $9 billion, an increase of 1.8% on the prior year. I’ll return to this slide in a moment, but… 13
Slide 14: Personal lines premium turnaround
For personal use only • First. I did want to call out the premium movements in personal lines as this has been a hot topic at our previous result presentations. I’ve included this slide which graphically displays the turnaround as the portfolio returns to growth. In my view, this indicates that not
Slide 15: Personal Insurance and Commercial portfolios
For personal use only • Breaking out the PI portfolio and in Motor, single digit price increases have been achieved while retention rates have remained stable. Product enhancement continues particularly in the mass market brands, while growth in the specialist brands has again been strong. • In Home
Slide 16: Investment markets impact on General Insurance
For personal use only • Obviously one key factor in both the reduced headline and the underlying General Insurance result has been the impact of investment markets, which have had another volatile year. • Income on the Insurance Funds was $254 million, with losses from widening credit spreads and th
Slide 17: Bank result
For personal use only • Turning now to the Bank, where net profit after tax was $393 million, up 11% on FY15. • Total lending assets grew by 4.5%, with retail lending increasing in line with system at 5.7%. • The business lending portfolio returned to growth in the second half, reflecting our recent
Slide 18: Bank credit quality
For personal use only • Those of us who were in this room seven years ago would never have envisaged such a credit outcome. This is a slide I have used before but today it is even more relevant given the Bank balance sheet is now equivalent in size to that pre‐GFC. While economic and credit cycles h
Slide 19: Suncorp Life result
For personal use only • Moving now to Suncorp Life and the business has delivered a 9.7% improvement in underlying profit. This included positive lapse and claims experience of $21 million. • Suncorp Life continues to drive sustainable growth across the portfolio with a focus on value over volume. T
Slide 20: Capital position
For personal use only • To capital now, and Suncorp continues to remain well capitalised against Common Equity Tier 1 and Tier 2 capital requirements for both the Bank and General Insurance businesses. • The Bank’s CET1 ratio at 9.21% was above its target operating range of 8.5% to 9.0% and the Gene
Slide 21: Medium-term financial targets
For personal use only • Finally, I’d like to reiterate the medium‐term financial targets, which we announced at our investor day in May. • As Michael has stated, our strategy is focused on broadening our relationships with customers. This will be measured by the increasing number of connected custom
Slide 22: Outlook
For personal use only • Turning to the outlook, Suncorp is well placed to deal with the change and volatility in the Australian and global economies. • First, our investment strategy is being fine‐tuned to meet the challenges. This is being led by our new Chief Investment Officer, Patrick Farrell. •
Slide 23: Customer priorities: Right, Better, Differently
For personal use only • As you know, customers are at the heart of our strategy for growth. • We have structured and balanced our near term customer priorities. • Doing it Right by strengthening our core business. We intend to do this through — having holistic conversations to create customer pathwa
Slide 24: Summary and conclusion
For personal use only • To conclude, and as a backdrop to your questions, let me summarise our presentation today. • In the last six months, — we reset our strategy — aligned the operating model, and — worked hard to achieve improvements in working claims. • In a very competitive market, we’ve deliv
Slide 25: Questions
For personal use only Thanks Michael. Reminder to please wait for the microphone before asking questions. 25
Slide 26: Important disclaimer
Important disclaimer ase 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 Suncorp or any of it