Suncorp has announced it will be starting an optimisation program for its Australian life insurance business as a means of improving competitiveness and achieving better customer outcomes.
In an announcement of its half-yearly results to the ASX, Suncorp said alongside the program, it is exploring strategic alternatives in order for the business to better meet customer needs and maximise shareholder value.
“Australian life insurance was impacted by an industry deterioration in lapse and claims trends, however Suncorp’s conservative approach to setting assumptions has resulted in minimal impacts to experience,” Suncorp said in a statement.
“Offering customers a broad range of life insurance solutions through direct and intermediary channels is core to Suncorp’s financial services marketplace strategy.”
Suncorp announced an increase in underlying profit in its life insurance business, across Australia and New Zealand, of 14 per cent to $48 million.
However, it noted that its Australian life business was impacted by an industry deterioration in lapse and claims trends, and its conservative approach to setting assumptions resulted in negative experience of $2 million.
Suncorp’s New Zealand life business returned $17 million, with a 44 per cent increase in underlying profit to $23 million offset by negative market adjustment due to increasing discount rates.
Suncorp chief executive Michael Cameron said the group has a positive margin outlook across its businesses.
“Insurance’s GWP growth, remediation of working claims and strong focus on claims management is expected to deliver an improvement in the underlying ITR in the second half,” Mr Cameron said.
“Life planned margins are expected to remain stable, however lapse and claims experience may be impacted by volatile industry trends.”