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UPDATE 1-Australia's Suncorp says HY net profit falls as claim payouts jump

Published 15/02/2018, 09:08 am
© Reuters.  UPDATE 1-Australia's Suncorp says HY net profit falls as claim payouts jump
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(Adds outlook, background on claims)

Feb 15 (Reuters) - Australia's biggest general insurer Suncorp Group Ltd SUN.AX reported a 16 percent fall in half year net profit on Thursday, as it experienced a spike in claims following a hailstorm in Victoria in December and higher compliance costs.

Net profit came in at A$452 million ($358.48 million) for the six months to Dec. 31, falling short of the average analyst forecast of about A$486 million, according to Thomson Reuters I/B/E/S.

The Brisbane-headquartered company maintained its interim dividend at 33 Australian cents per share.

Suncorp said results were hit by natural hazard claims costs of A$395 million for the first half, about 20 percent higher than the provision for the period.

Last month, the company warned of a hit of between A$160 million and A$170 million due to the hailstorm in Victoria, for which it expected more than 21,000 claims at the time across its insurance brands. life insurers have faced rising claims rates and more policy cancellations since local media in 2016 revealed the use of discredited methods to refuse legitimate claims for payouts.

That scandal, among others, led the federal government to hold a powerful royal commission into the finance sector which began this month. profit, which strips out gains or losses caused by non-cash accounting items, fell about 19 percent in the six-month period.

"The Board expects to maintain a dividend payout ratio of 60 percent to 80 percent of cash earnings and return surplus capital to shareholders," the firm said in a statement.

It added that it is targeting group revenue growth of three percent to five percent in the fiscal year 2019.

($1 = 1.2609 Australian dollars)

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