Slide 1: Financial Results
Financial Results For the year ended 30 June 2023 9 August 2023 SUNCORP GROUP LIMITED | ABN 66 145 290 124
Slide 2: FY23 Overview
FY23 Financial Results 2 FY23 Overview Steve Johnston Group Chief Executive Officer
Slide 3: Purpose driven, delivering strong outcomes for the long term
FY23 Financial Results 3 Purpose driven, delivering strong outcomes for the long term
Slide 4: Group result
FY23 Financial Results 4 Group result Strong revenue growth and margin Profit after tax from Functions expansion Suncorp Bank $470m ( 27.7%) Insurance (Australia) $755m ( 333.9%) ― Strong top-line growth across the Group ― Improved underlying margins and returns ― Significant turnaround in investm
Slide 5: Result highlights
FY23 Financial Results | 5 Result highlights Strong top-line growth and underlying momentum across the Group Insurance Insurance Suncorp General (Australia) (Australia) New Zealand Insurance Suncorp Bank Suncorp Bank Group Gross written Gross written Gross written Underlying Home lending Cost-to-inc
Slide 6: FY23 Plan – strategic initiatives and targets
FY23 Financial Results 6 FY23 Plan – strategic initiatives and targets Insurance Australia Suncorp New Zealand Suncorp Bank Win in Home Revitalise growth Grow brands and strategic Strategic partnerships Seamless everyday banking Optimise pricing and risk selection Initiatives Digital first customer
Slide 7: FY23 Plan completed successfully
FY23 Financial Results 7 FY23 Plan completed successfully UNDERLYING INSURANCE TRADING RATIO GROSS WRITTEN PREMIUM BANK COST-TO-INCOME RATIO (excluding COVID-19 impacts) Insurance (Australia)1 ($m) FY20 to FY23 CAGR +8.4%2 10.9% 59.0% 10,164 57.1% 9.0% 9,254 51.8% 7.2% 8,627 FY21 FY22 FY23 FY21 FY22
Slide 8: Pathway to Bank completion and transition
FY23 Financial Results 8 Pathway to Bank completion and transition 4 August 2023 ~Q1 2024 mid-2024 Calendar Year NOTES ACCC Tribunal ― On 4 August 2023, the Australian Outcome Competition and Consumer Decision Commission (ACCC) did not approve merger authorisation Tribunal Process application Transa
Slide 9: FY23 Financial Results
FY23 Financial Results 9 FY23 Financial Results Jeremy Robson Group Chief Financial Officer
Slide 10: Group result overview
FY23 Financial Results 10 Group result overview Continued margin expansion and strong top-line growth FY23 FY22 Change KEY MESSAGES ($m) ($m) (%) ― Strong top-line growth and improved underlying margins Insurance (Australia) 755 174 333.9 ― Inflationary pressures and increased reinsurance costs Sunc
Slide 11: Insurance (Australia) – gross written premium
FY23 Financial Results 11 Insurance (Australia) – gross written premium GROSS WRITTEN PREMIUM BY PORTFOLIO HOME AND MOTOR PORTFOLIO GROWTH (excluding ESL; $m) (versus pcp; normalised for portfolio exits) 50 8 (66) 7 (4) 161 13.5% 12.0% 286 10.7% 9.9% 468 9.8%1 10,164 9.1% 8.9% 9,254 7.5% 7.1% 5.4% F
Slide 12: Insurance (Australia) – net loss ratio
FY23 Financial Results 12 Insurance (Australia) – net loss ratio NET LOSS RATIO BY PORTFOLIO NOTES ― Prior year reserve releases lower as previously indicated Working claims excl. COVID 1.8% ― The negative impact of natural hazards costs was largely due to the prior year benefiting from reinsurance
Slide 13: Insurance (Australia) – investment market impacts
FY23 Financial Results 13 Insurance (Australia) – investment market impacts UNDERLYING YIELD ON INSURANCE FUNDS PORTFOLIO ASSET ALLOCATION 5.13% (% of total investment assets) 0.28% 9% 5% 6% 6% 0.98% 14% 14% 0.74% FY22 FY23 $13.7b $14.8b 74% 71% 1.59% 0.27% 3.13% 0.40% Cash Fixed Income Inflation-li
Slide 14: Suncorp New Zealand
FY23 Financial Results 14 Suncorp New Zealand PROFIT AFTER TAX GROSS WRITTEN PREMIUM NET INCURRED CLAIMS NOTES (NZ$m) (NZ$m) (NZ$m) ― Strong GWP growth with pricing Net loss reflecting inflationary pressures and 58% 67% ratio increased reinsurance costs 14.3% 165 2,437 1,232 ― General Insurance busi
Slide 15: Group underlying ITR
FY23 Financial Results 15 Group underlying ITR FUNDAMENTAL UITR DRIVER ANALYSIS NOTES ― FY23 target of 10% - 12% met (FY23: 10.9%; 2H23: 11.7%) FY22 vs FY23 FY24 Outlook ― Underlying ITR was impacted by an increase in natural hazard and reinsurance FY22 UITR1 9.0% costs, as well as working claims, e
Slide 16: Natural hazards & reinsurance
FY23 Financial Results 16 Natural hazards & reinsurance FY23 NATURAL HAZARDS VS ALLOWANCE1 FY24 REINSURANCE PROGRAM ($m) ($m) +97 1,360 6,400 1,257 100 $m New Zealand buydowns AUD350 1,160 174 52% placed 75 1,260 NZD100 1,085 1,083 Main Catastrophe Cover Event 1st NZ 2nd NZ 500 FY23 Allowance FY23 E
Slide 17: Suncorp Bank
FY23 Financial Results 17 Suncorp Bank NET INTEREST MARGIN FY23 FY22 Change ($m) ($m) (%) Net interest income 1,408 1,245 13.1 Other operating income 17 3 466.7 (0.31%) 0.35% Operating expenses (737) (736) (0.1) 1.93% 1.96% Operating profit 688 512 34.4 0.04% (0.05%) Impairment release / (expense) (
Slide 18: Suncorp Bank – credit quality
FY23 Financial Results 18 Suncorp Bank – credit quality HOME LENDING ORIGINATIONS: DEBT-TO-INCOME > 6x HOME LENDING: LOAN-TO-VALUE > 80% 23% 23% 21% 17% 17% 18% 16% 14% 14% 11% 13% 10% 11% 8% FY22 FY23 4% n/a1 7% 1% 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 FY21 FY22 FY23 Industry1 Suncorp Portfolio Origination
Slide 19: Group operating expenses
FY23 Financial Results 19 Group operating expenses GROUP OPERATING EXPENSES NOTES (excluding ESL and TEPL; $m) ― Project spend reduced as expected 2,872 across regulatory and maintenance ― Economy-wide inflationary pressures 57 ReOrg costs continued to impact the expense base ― Strategic and operati
Slide 20: Group capital
FY23 Financial Results | 20 Group capital COMMON EQUITY TIER 1 CAPITAL HELD AT GROUP NOTES ($m) ― CET1 held at Group remained broadly flat at $274m ― Organic usage largely from business growth Organic generation 270 ― Capital impacted by FY24 reinsurance renewal of ~$440m partially offset by diversi
Slide 21: AASB 17 implementation
FY23 Financial Results | 21 AASB 17 implementation AASB 17 application date meaning FY23 Results released under Investor update with 1H24 Results financial statements prepared AASB 1023 with AASB 17 greater detail on released reported under AASB 17 from FY24 transitional impact note disclosure AASB
Slide 22: Strategy & Outlook
FY23 Financial Results 22 Strategy & Outlook Steve Johnston Group Chief Executive Officer
Slide 23: FY24 priorities
FY23 Financial Results 23 FY24 priorities Purpose | Risk Appetite | Financial Settings | Reinsurance Strategy | ESG PORTFOLIOS Motor Home Commercial Statutory classes New Zealand Bank Grow and diversify Strengthen our Grow market share Win in Home, Strengthen our Develop a more Commercial leading po
Slide 24: Organisational changes
FY23 Financial Results 24 Organisational changes – Operating model changes to further embed customer-centricity and enhance the efficiency of the business – Three core insurance functions with end-to-end accountabilities to enable greater focus on customer and financial outcomes: Consumer Commercial
Slide 25: FY24 Outlook
FY23 Financial Results | 25 FY24 Outlook ― Insurance: • GWP growth of around 10% driven by premium increases, as business responds to increased input costs • Underlying ITR supported by strong premium momentum and elevated yields, offsetting higher reinsurance and natural hazard costs, and claims in
Slide 26: Questions
FY23 Financial Results 26 Questions
Slide 27: Important disclaimer
FY23 Financial Results 27 Important disclaimer This presentation contains general information which is current as at 9 August 2023. It is information given in summary form and does not purport to be complete. It is not a recommendation or advice in relation to Suncorp Group Limited (Suncorp) or any