Even so, it estimated the virus would have a neutral impact on its insurance business overall, as it had received fewer motor claims.Chief investment officer at Suncorp shareholder Atlas Funds Management, Hugh Dive, said most of the positive surprise came from better-than-expected investment income in Suncorp's insurance division. The dividend payout ratio was 60.7%, less than FY19’s 81.2% payout. Suncorp Group chief Steve Johnston says a horror run of natural disasters will contribute to annual rises in household insurance premiums of up to 5 per cent, as he called for stimulus spending to mitigate the effects of climate change.The insurance giant posted cash profits that were a third lower than last year on Friday, after what Mr Johnston called a "very challenging" year that included the summer's disastrous bushfires, hail storms and the financial hit from COVID-19.The $749 million in cash profits still beat expectations, which sparked a 11 per cent surge in its share price to $9.66, as it also paid out a slimmed-down dividend.With insurers benefiting from a global trend towards rising premium rates, Mr Johnston pointed to potential increases in home and motor premiums of between 3 and 5 per cent over the year ahead, with home cover rising at the top end of that range.He said a key reason for the expected growth was that wild weather had become more frequent and severe. As we emerge from COVID-19, some tech companies are growing faster than ever. ** Between 1st July - 31st March.
** Between 1st April - 30th June. "Arguably, our nation is no better placed heading into this summer than we were this time last year. Jaz invests for the long-term and doesn't sweat the small stuff. Nor that they won’t re-emerge this summer," he said. Suncorp has three main segments that it reports to investors.The Australian insurance division reported a net profit after tax of $384 million, which was down 33.9%. At 31 July 2020, 5% of the home lending portfolio was under temporary loan deferral arrangements.Suncorp’s New Zealand division generated a net profit after tax of $245 million, the same as last year.That meant the profit after tax from ongoing businesses dropped 26.8% to $871 million.Suncorp’s total cash earnings fell 32.8% to $749 million (which includes ‘other’ profit/losses).However, reported net profit after tax (NPAT) of $913 million was up 421.7% after a $285 million after-tax profit from the sale of the Capital SMART and ACM Parts businesses, and the $89 million impairment charge relating to the core banking platform.One of the pleasing elements of the report showed that there was 14% growth in digital users and continued increases in new business sales and claims lodgements through digital channels.Suncorp has decided to pay a final dividend per share of $0.10, bringing the total FY20 dividend to $0.36 per share. Afterpay Ltd (ASX:APT) and Zip Co Ltd (ASX:Z1P) are in the news.Australian house prices continue to fall according to the CoreLogic home value index. The dividend is sharply down on last year's payment of 44 cents, but it comes when some rivals including Insurance Australia Group paid no dividend for the latest half.Bell Potter analyst TS Lim said Suncorp had managed to deliver a "good result in a challenging year," saying the group's surplus capital was strong at $823 million, and each of its divisions had performed better than the consensus forecast.In its flagship insurance business, which sells policies under brands including AAMI, GIO and Bingle, profits fell 34 per cent to $384 million as the company took extra provisions for COVID-19 impacts. Sign up forA concise wrap of the day on the markets, breaking business news and expert opinion delivered to your inbox each afternoon.
That’s a reduction of 48.6%. All its segments are within their target operating margins.Suncorp said the environment continued to be uncertain due to COVID-19.
Looking ahead, shares in Suncorp are due to go ex-dividend on 2020-08-26 and the next dividend pay date is 2020-10-21. It said it’s going to remain conservative during this period. Insurers suffer every time there’s a bad natural disaster year and they also suffer when the economy goes through a rough patch. 21 Oct 2020: Div Pay Date: 9 Feb 2021: Report (Interim) 20 Aug 2021: Report (Prelim) 20 Aug 2021: Report (Annual)