Suncorp has reported a sharp first-half earnings fall after a run of severe weather events drove catastrophe costs well above allowance but the insurer says underlying margins remain resilient and its capital position is strong, supporting an interim dividend and ongoing buy-back plans.
In an ASX announcement for the half year ended 31 December 2025 (1H26), Suncorp posted profit after tax of $263 million, down from $1.1 billion in 1H25, and cash earnings of $270 million, down from $828 million. The group said the result was hit by elevated natural hazard experience and lower investment returns, alongside negative mark-to-market movements on investments as yields rose.
CEO Steve Johnston (pictured) said the headline result masked stronger underlying performance and continued progress on strategy.
“While Suncorp’s 1H26 reported profits and shareholder returns have been challenged by an elevated level of natural hazard costs and lower investment returns over the half, our underlying business remains resilient as we continue to deliver on our strategic imperatives and drive good momentum leading into the second half of the financial year," said Johnston.
He said the big insurers dealt with nine declared natural hazard events through the half, resulting in more than 71,000 claims at a net cost of around $1.3 billion. These included destructive thunderstorms and widespread hailstorms - including a giant hailstorm in November - that hit the east coast of Australia, particularly south-east Queensland through October and November.
“Despite this, the business continues to perform strongly, reflected in the solid growth of our Consumer business, and our underlying insurance trading ratio, which has remained towards the top half of our target operating range at 11.7%," said Johnston.
He said the strength of Suncorp’s brands and customer offer continued to translate into growth, led by the consumer portfolio, where gross written premium rose 6.3% and units increased 2% in motor and 0.4% in home, despite intense competition and ongoing cost-of-living pressures. Johnston added that Suncorp has been sharpening portfolio mix and quality, with tighter risk selection and pricing helping lift growth in lower-risk target segments.
He said the group’s balance sheet remained strong, underpinning the board’s decision to declare a fully franked interim dividend of 17 cents a share, equal to 68% of cash earnings.
On strategy, Johnston said the insurer was progressing its platform modernisation and operational transformation agenda, including scaling the use of artificial intelligence.
He also said disciplined capital management had allowed Suncorp to complete $168 million of its on-market buy-back launched in September, with around $400 million still targeted by the end of FY26.
Looking ahead, Johnston said the group expects GWP growth to sit around the bottom end of the mid-single-digit range given the current commercial cycle in Australia and New Zealand, while underlying insurance trading performance is expected to remain in the top half of the 10% to 12% target range.
The scale of Suncorp’s catastrophe burden was a central feature of the half. The natural hazard costs of $1.319 billion compared with $503 million a year earlier, and said this was $453 million above its half-year allowance. Net incurred claims rose 23.4% to $5.479 billion, with the group pointing to elevated natural hazard losses and “ongoing working claims inflation” in parts of the portfolio, including construction and labour inflation in home claims and persistent parts and labour pressures in motor.
For brokers and underwriting partners, the update provides a near-term read on market conditions across commercial and personal lines. Group gross written premium (GWP) increased 2.7% to $7.689 billion, with stronger consumer growth partially offset by softer conditions in workers’ compensation and negative growth in New Zealand. Suncorp flagged that New Zealand’s result was affected by a soft commercial market cycle and competition from international capital, alongside a slowing economy and softening consumer prices in response to lower claims.
Underlying profitability metrics were steadier than the statutory profit line suggests. Suncorp reported an underlying insurance trading ratio (ITR) of 11.7%, broadly stable versus 11.8% in 1H25 and sitting toward the top half of its 10%–12% target range. However, divisional performance showed pressure points: the Consumer Insurance division recorded an insurance trading loss of $137 million (versus a $509 million profit in 1H25), driven by the natural hazards impact, while Commercial & Personal Injury delivered $204 million (down from $224 million). In New Zealand, Suncorp reported NZ$290 million (up from NZ$283 million), while noting margin dynamics and weaker written premium in intermediated commercial lines.
Capital management remained a standout. The board declared a fully franked interim dividend of 17 cents per share, a 68% payout ratio of cash earnings, with payment scheduled for 31 March 2026. Suncorp also said it completed $168 million of its on-market buy-back during the half, cancelling 8 million shares, and expects to target around $400 million through FY26, with the buy-back set to recommence post-results. The group reported a strong capital buffer, with CET1 $700 million above the midpoint of its target range.
Operationally, Suncorp highlighted technology and claims-response investments that are likely to be closely watched by brokers and peers amid ongoing weather volatility. The insurer said 73.3% of sales were made online and 63.1% of service transactions occurred digitally, while “Conversational AI customer support” chatbots handled more than 1.6 million digital interactions in the half.
