I’m delighted to present my first Annual Review to our stakeholders as Suncorp CEO & Managing Director.
It has certainly been a year of change, not just for Suncorp, but across the broader financial services sector. Market conditions have presented some headwinds with the economy in transition and ongoing competitive, regulatory and political pressures. Investment markets have remained volatile, delivering low growth and low returns. The rise of technology start-up companies in the financial services sector continues to threaten the scale advantage of large incumbents and disrupt traditional business models. Heightened price competition is a key contributor to the industry’s high churn rate. Improving customer retention is a key focus for our business which will positively impact the Group’s future earning capacity.
We have evolved our strategy and realigned our operating model to take advantage of new opportunities, enabling us to create greater value for our almost nine million customers, while building a more resilient organisation. We have worked hard to rectify the working claims issues identified in December, through an intervention strategy designed to restore performance. We have also streamlined functions and taken a more frugal approach to discretionary spending. These measures have allowed us to end the year in a solid position.
I’m pleased to report that in 2015/16, Suncorp Group has delivered a net profit after tax of $1,038 million and a total ordinary dividend of 68 cents fully franked.
When I stepped into the role in October 2015, my first priority was to meet as many people across the business as possible, to listen and learn more about the challenges and opportunities ahead.
Over the past six years much has been achieved in relation to the Group’s Cost, Capital and Culture programs. The significant investments made during the Building Blocks, Simplification and Optimisation programs have delivered value to stakeholders and created a strong foundation. This enables us to maintain a flat cost base, while implementing our Connected Customer strategy. Suncorp is now ready for its next phase of growth - sharpening our focus on delivering greater value for our customers and meeting more of their needs.
To achieve this, we have had to reorganise ourselves. In February 2016, I announced a new operating model, which removed structural constraints and enables us to broaden and deepen our relationships with our customers. As we move forward, our customers are now customers of the Group. With a 'One Suncorp' approach we will meet our customers' needs across brands and lines of business. Suncorp has a long history and culture of creating value for customers and we are now in position to build on this by giving them access to a Suncorp marketplace, which will allow them to self-select solutions, services and tools that are relevant and meaningful to their needs. We want to provide positive outcomes for all of our customers. This also extends to new services that will be provided by third parties and partners such as Trōv, which will offer customers, particularly those in the millennial generation, access to on-demand insurance for single items that are important to them. Ultimately, we want to help our customers Create a better today through our ‘One Suncorp’ business model approach.
As one of Australia's and New Zealand’s leading financial service providers, I’m acutely aware of the responsibility we have to all of our stakeholders. We are an integral part of the communities in which we operate.