Insurer Suncorp’s half year profit has fallen slightly, due in part to a rise in insurance claims.
Insurance and banking firm Suncorp Group has increased its dividend to shareholders despite a slide in its half year profit.
The owner of the AAMI and GIO insurance brands received more insurance claims than it had expected, which contributed to its 4.5 per cent fall in profit in the six months to December 31, to $548 million.
Its largest number of claims came from victims of bushfires in the NSW Blue Mountains and storms in NSW and Queensland.
A 12 per cent rise in insurance claims to $331 million offset strong growth in earnings, which was driven primarily by higher premiums, Suncorp said.
The group’s banking division made a net profit of $105 million, up significantly from just $4 million a year ago, thanks to improvements in its balance sheet and lending growth.
Suncorp’s life insurance division continued to struggle with rising claims, causing profit to fall by 57 per cent to $22 million.
But its shareholders will receive an interim dividend of 35 cents, up from 25 cents a year earlier.
Chairman Ziggy Switkowski said the generous payout was declared as the company has more than $1.2 billion in capital above its conservative operating targets.
Investors still sold, however, sending Suncorp shares down 35 cents, or 2.8 per cent, to $12.25.
Chief executive Patrick Snowball said the company was working to grow revenue and reduce costs across the group.