Vero and AA Insurance owner Suncorp posts profit bump in NZ
Thursday, 14 August 2025
New Zealand’s second-largest house, car, contents and business insurer Suncorp New Zealand has announced an $189 million increase in profit on the back of higher premiums for homeowners, and fewer-than-expected extreme weather claims.
It comes the day after IAG, the country’s largest insurer, reported a roughly $163m increase in profit as a result of higher premiums and reduced extreme weather claims.
Suncorp New Zealand, which owns the Vero and has a majority stake in AA Insurance, reported a net profit after tax of $419 million for the financial year ending June 30, up from $230m in its previous financial year.
Suncorp New Zealand is owned by the Australian Suncorp Group, whose shares trade on the Australian ASX sharemarket. Its chair Christine McLaughlin described the group’s performance as “strong”.
Suncorp New Zealand chief executive Jimmy Higgins said: “A range of factors contributed to this year’s net profit, including the earn-through impact of previous years’ pricing changes, lower reinsurance costs and a relatively benign natural hazard environment.
However, he said: “This follows a period of lower profitability after major weather events including the Auckland floods and Cyclone Gabrielle.”
On Wednesday, Amanda Whiting, the chief executive of IAG New Zealand, which owns the State, NZI and AMI brands, acknowledged that households continued to face tough economic times.
Higgins did the same on Thursday, saying: “We know many households and small businesses are doing it tough and have faced higher costs over recent years, including for insurance.
However, he said: “It’s encouraging to see premiums beginning to moderate overall, and in some cases reduce, as supply chain inflation eases and reinsurance markets stabilise.”
Suncorp reported an $88m increase in premiums charged to house insurance policyholders from $1.057 billion in the previous year to $1.145b.
Whiting told policyholders on Wednesday that house insurance policyholders should expect low single-digit premium increases this year, though some owners of flood-prone homes covered by the insurer could see bigger increases.
Despite there having been fewer natural disasters than Suncorp had bargained on, the year was not free of weather bombs resulting in claims, though Suncorp’s Australian business was primarily affected.
McLaughlin said: “Suncorp’s teams supported customers through 17 major weather events including severe flooding across North Queensland and the mid-north coast of New South Wales, as well as the impacts of ex-Tropical Cyclone Alfred in Australia and ex-Tropical Cyclone Tam and flooding in New Zealand.”
However, the cost was less than Suncorp had forecast before the year began.
“The cost of these events for Suncorp remained within our natural hazard allowance for the year,” McLaughlin said.
Steven Johnston, chief executive of the Suncorp Group said: “While the absolute cost of natural hazard events in FY25 was below our allowance, the number of weather-related claims remained high at more than 120,000.
“This is consistent with recent years and underscores the importance of having accessible and affordable insurance.”
Suncorp had been modernising its systems in New Zealand, where it suffered the embarrassment of AA Insurance being fined $6.175m during the financial year for historic blunders when it failed to apply multi-policy and membership discounts, as well as guaranteed no-claims bonuses.
Similar errors affected other insurers including rival Tower, while IAG faces court proceedings over alleged historical failures to properly set premiums for 269,000 policyholders, including failing to apply some multi-policy discounts and no claims bonuses.
The year also saw Suncorp sell its Asteron New Zealand life insurance business, the latest in large corporates selling their life insurance operations.
Higgins, who received pay of A$2.855m (about NZ$3.13m) during the financial year, also served on the Independent Research Group on climate mitigation, making recommendations to the government on how to prepare the country for climate disruption.