Suncorp Life profit drops 38% despite claims consolidation

In a statement to the ASX, the Suncorp Group said the "profit after tax was impacted by investment and market volatility with actual returns being lower than longer-term assumptions".

Suncorp Life also reported that underlying net profit after tax had increased to $58 million from $52 million for the corresponding period of the previous year.

"Life's underlying profit has stabilised following the revision of key assumptions in 2014. Overall claims and lapse experience was $8 million favourable. Life's total in-force annual premiums are up 5.2 per cent reflecting Life's continued focus on retention and value over volume, ensuring new business is written on a more sustainable footing," the ASX statement said.

The wider Suncorp Group also posted a 16 per cent drop in net profit, down to $530 million from last year's $631 million, due to increasing natural disaster claims costs.

Chairman Ziggy Switkowski said Suncorp has declared an interim dividend of 30 cents per share fully franked, compared to last year's 38 cents.

"The interim dividend reflects positive earnings contribution from across the Group's diversified insurance and banking businesses. The half-year net profit after tax of $530 million demonstrates the benefits of a financial services conglomerate with the banking and life operations delivering improved underlying profits at a time when general insurance earnings have been impacted by external headwinds and operational issues," Dr Switkowski said.

Suncorp Group chief executive Michael Cameron said the end of his first 100 days in the top job signalled the completion of a transition phase.

"Our customers will satisfy their needs by accessing any of our products and services, any brand, via our branches, our contact centres, via intermediaries and increasingly digitally. This will include products and services from selected third parties currently outside of Suncorp.

Suncorp's reach, with significant scale in general insurance, life insurance and banking, means we can uniquely meet customers' needs in relation to motor, contents, building, liquidity, longevity, trauma, life and health," he said.

Despite this, Mr Cameron said there will be "some re-alignment of the operating model and changes will be announced shortly".

He earmarked changes to the operating model and said the "brands will be rationalised".