February 10, 2020 / 10:06 PM / 9 days ago

UPDATE 1-Australia's Suncorp posts 6% dip in underlying HY profit on weaker insurance business

(Adds details, underlying profit figures)

Feb 11(Reuters) - Australian insurer Suncorp Group Ltd said on Tuesday its first-half underlying profit dipped 6%, hurt by weaker performance of its insurance business owing to higher natural hazard costs.

Insurers in the country have been inundated with claims after soaring temperatures and dry winds fanned bushfires across the country, killing 33 people and an estimated one billion native animals since September.

Last month, Suncorp confirmed that natural hazard costs in the first-half were A$519 million, but said a strong reinsurance program would help it ensure full-year costs remain within its A$820 million provision.

Suncorp’s Australia insurance arm posted a 3.9% decline in profit owing to lower reserve releases and higher costs, pushing the company’s profit from continuing operations for the six month ended Dec. 31 to A$396 million, down from A$422 million a year ago.

The company on Tuesday also said a strategic review of its wealth business has begun.

The Brisbane-based firm said it sees lower investment returns in the future compared with the past year, as the market remains pressured by the recent outbreak of the coronavirus epidemic in a low-yield domestic environment.

Meanwhile, the company’s net profit more than doubled to A$642 million ($428.92 million) in the six months ended Dec. 31, helped by an A$293 million after-tax profit on sale of its vehicle repair business Capital SMART and ACM Parts. .

The company declared an interim dividend of 26 cents per share.

$1 = 1.4968 Australian dollars Reporting by Shruti Sonal and Shreya Mariam Job in Bengaluru; Editing by Shailesh Kuber

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