Suncorp calls for national response to climate change as profit dips

Suncorp says governments can no longer keep placing climate change in the “too-hard basket”, warning extreme natural disasters will hurt businesses already grappling with the effects of COVID-19.

Releasing its results for the 2020 financial year, the Queensland-based company said the flurry of bushfires that swept across Australia last summer and the onset of the global coronavirus pandemic had cut its banking and insurance profits by more than 30 per cent.

Suncorp posted a cash profit of $749 million, a 33 per cent slump compared with the previous year, noting the 12 months to June 30 had been “challenging”.

The group’s statutory net profit was $913 million, a rise of $175 million on the prior year, driven by proceeds from the sale of its Capital SMART and ACM Parts businesses and a non-cash impairment charge of $89 million related to its core banking platform technology.

Insurance profit for the period was down 33.9 per cent to $384 million, while banking profits tumbled 33.5 per cent to $242 million.

Suncorp chief executive Steve Johnston said while governments rightly respond to the initial impact of the pandemic, climate change remains an ongoing risk for communities and the economy.

“This can no longer remain in the too-hard basket,” he said,

“Suncorp has long argued for a national co-ordinated response to disaster mitigation and natural hazard resilience to deal with the impacts of climate change.”

Mr Johnston said a nation-building program to mitigate climate risks would be beneficial to communities and provide much-needed economic stimulus.

Natural hazard costs remained in line with its allowance of $820 million despite significant bushfire, flooding, hail and storm events during financial year 2020.

It has also issued a dividend payout to its shareholders of 10 cents per share.

Suncorp blamed COVID-19 for a $140 million negative impact on its financial result due to lower new business volumes for insurance, reduced claims and banking impairment losses caused by a greater need of provisioning capital.

The banking and insurance group said repayments on 9800 customer loans were suspended through COVID-19 hardship measures.

Approximately 31,000 motor and home insurance customers had received three-month premium waivers or discounts at the end of June, while 26,000 doctors, nurses, hospital staff and first responders received free AAMI roadside assistance.

“While our financial performance, particularly in the second half, has not been immune from the negative impacts of COVID-19, there were a number of highlights which demonstrate the group has solid foundations,” Mr Johnston said.

“Digital channels helped drive favourable growth in our Australian motor and home insurance portfolios, and natural hazard costs remained in line with allowance as a result of our strengthened reinsurance program.”

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