Suncorp sells life insurance arm following profit drop
Written on the 9 August 2018 by David Simmons
Suncorp (ASX: SUN) has announced it will sell its life insurance division for $725 million on the same day it posted its full year results.
The sale of the life insurance division comes after over a year of speculation. The listed Australian company has sold the division to a unit of Dai-Ichi Life Holdings for $725 million.
The company also announced its full year results on Thursday morning, which has seen the company's full year profits drop 1.5 per cent to $1.06 billion.
Suncorp's cash earnings also took a dive, down 4.1 per cent from $1.14 billion in FY17 to $1.09 billion this year.
Despite these results, Michael Cameron, CEO and managing director of Suncorp, says the group has definitely improved from the first half of FY18.
"Six months ago, we committed to a stronger second half, as the benefits of our strategy begin to flow through," says Cameron.
The company improved on its first half by reporting a 34 per cent uplift in net profits in the second half.
The company was one of the many financial institutions that took a grilling at the royal commission into the financial services industry, though it is not clear if the business was materially hit by the results of the commission.
Ultimately, the second half of the year was buoyed by how tough the business had it in the first half. Suncorp's first half results took a pummelling from the unanticipated amount of damage from a variety of natural disasters, including the Melbourne hailstorm event, which saw Suncorp's first half profit drop 15.8 per cent to $452 million.
The future seems bright for the insurance giant, which will soon settle into a new $800 million tower in Brisbane as part of a lease agreement which has been dubbed Brisbane's largest in a decade.
Business News Australia
Author: David Simmons