Annual Review 2015/16

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.

In 2015/16 we launched our Cyclone Resilience Benefit in northern Australia, recognising practical measures which homeowners can put in place to strengthen their homes against cyclones and at the same time delivering premium reductions. The measures and building features recognised were based on our research with the Cyclone Testing Station at James Cook University, which indicated that having a strong, resilient home can help reduce the extent of damage sustained during a cyclone. We believe homeowners who undertake this work should be rewarded. The Benefit is a key part of our Protecting the North program, which aims to improve resilience through mitigation and making insurance more accessible and affordable to those who need it most.

Suncorp is also the only insurer selected to participate in the first round of a national effort to help three million Australians who are financially excluded and face significant economic and social hardship. As part of our involvement, we have committed to developing a Financial Inclusion Action Plan, which is an excellent opportunity to further challenge and drive our current practices around financial inclusion.

As a Foundation Partner of Youngcare, in 2015/16 we helped the charity celebrate its 10-year anniversary. Over the past decade, the charity has delivered life changing support to countless young Australians with high care needs by providing a choice of appropriate accommodation and expert care. Looking back, it’s incredible to see what’s been achieved and it’s something we are proud to be part of.

Following on from our Bank of the Year win in 2015, Suncorp was this year named Money magazine’s 2016 Business Bank of the Year, recognising the value we provide to Australia’s business community. It’s another great achievement for our team and once again reaffirms our position as the genuine alternative to the major banks and positions us well to become the regional financial services champion.

While many companies are feeling the pressure of transformation, Suncorp has been on a long journey of building capability and infrastructure that will support and enable us to deliver greater value for our customers. We are committed to delivering our customer initiatives, while remaining focused on three key priority areas:

  • maintaining momentum and stability
  • elevating the customer and
  • recalibrating our cost base.

Suncorp is uniquely positioned to provide customers with an experience that’s never been seen before in the financial services sector and I’m confident that our customer outcomes-based operating model will allow us to Create a better today for all of our stakeholders.