Profit hit by storms and weak investment returns
Shares drop to 11‑month low on earnings slump
Catastrophe losses blow past insurer allowance
Analysts say core performance stays resilient
Gross written premium misses forecasts; outlook trimmed to low end
Rewrites, updates shares in paragraph 2, adds analyst view in paragraphs 4-7
By Roushni Nair and Sameer Manekar
Feb 18 (Reuters) - Australian general insurer Suncorp SUN.AX reported a steep first‑half profit fall on Wednesday as storm‑driven claims and softer investment returns battered its earnings and forced a cut to its premium‑growth outlook, knocking its shares lower.
The stock declined as much as 5.4% to A$15.12, its weakest since mid‑March 2024, before closing down 4.4%. Australia's broader benchmark .AXJO ended 0.5% higher.
Suncorp became a pure‑play general insurer in 2024 following the sale of its banking arm to ANZ Group ANZ.AX.
Analysts said that much of the pressure had been anticipated, noting that catastrophe costs were the main drag on earnings while the insurer's underlying performance and capital position held firm.
Citi called the result "largely in line", highlighting a better‑than‑expected operating expense ratio and an 11.7% underlying insurance margin that it said matched consensus.
The broker said that Suncorp is setting up for stronger second‑half premium growth, particularly in commercial lines, though trading conditions in New Zealand remain challenging.
S&P Global Ratings said Suncorp’s capital adequacy should stay "excellent" despite the storm‑related earnings hit, and forecast a "meaningful" recovery in the second half as reinsurance absorbs a larger share of any further natural‑hazard losses.
Suncorp's cash earnings fell to A$270 million ($190.76 million) for the six months to December 31, down from A$828 million a year earlier and below the Visible Alpha consensus of A$311.2 million.
Natural‑hazard expenses jumped to A$1.32 billion after nine severe weather events, around A$453 million above the insurer's half-year allowance.
The insurer's investment income dropped 31% to A$259 million. Gross written premium rose 2.7% to A$7.69 billion but missed market expectations of A$7.78 billion, with New Zealand gross written premium sliding 5.6%.
The company trimmed its fiscal 2026 gross written premium growth outlook to the bottom of the mid‑single‑digit percent range.
Suncorp declared an interim dividend of 17 Australian cents per share, down from 41 cents a year earlier.
($1 = 1.4120 Australian dollars)
(Reporting by Sameer Manekar, Nichiket Sunil and Roushni Nair in Bengaluru; Editing by Maju Samuel, Alan Barona and Mrigank Dhaniwala)
((Nichiket.Sunil@thomsonreuters.com, roushni.nair@thomsonreuters.com))