Suncorp adds to insurance sunshine
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SYDNEY, Australia (Reuters) -- Suncorp Metway Ltd is the latest Australian insurer to beat forecasts, posting an 81 percent jump in first-half earnings on rising equity markets and higher premiums.
Brisbane-based Suncorp, the nation's second-largest general insurer and sixth-largest bank, said Friday profits would continue to rise after it restructured operations following the arrival of a new chief executive a year ago.
"Everything was a little better in banking. In general insurance, the Queensland CTP (compulsory third party) changes have led to a very substantial improvement and wealth management was up on the back of higher equity markets," Wilson HTM analyst Brett LeMesurier said.
Suncorp shares hit a two-year high on the result, climbing 4.1 percent to A$13.64 in a firmer overall market.
Suncorp said net profit for the six months to December 31, 2003, came in at A$281 million ($216 million), topping the A$155 million profit a year earlier.
Analysts had forecast a half-year net profit of A$256 million, according to a survey of five brokerages.
The group's general insurance profit almost tripled due to higher premiums and fewer claims, particularly in Queensland compulsory third party car accident insurance.
Suncorp's result followed higher-than-expected earnings issued by rivals Promina Group Ltd, QBE Insurance Group and AXA Asia Pacific this week.
Suncorp upgraded its full-year outlook, pointing to a lift in profit before tax, goodwill and investment income of around 25 percent, and flagged growth in each of its three divisions -- banking, general insurance and funds management.
"The strength of the first-half profit has put the company on track for a good full-year profit. The outlook for the company remains very positive," Chief Executive John Mulcahy said in a statement.
Suncorp restructured after buying the GIO general insurance business for A$1.26 billion in 2001.
Copyright 2004
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
