Suncorp beats profit forecasts despite weather-hit year, unveils buyback
Suncorp's FY26 cash earnings beat estimates despite higher weather claims. It announced a buyback, special dividend, and 3-5% GWP growth guidance.
Australian insurer Suncorp Group has reported full-year cash earnings that edged past market expectations, even as it absorbed a heavy toll from natural hazards. The company also unveiled a fresh capital return plan, sending its shares sharply higher.
For the year ended June 30, cash earnings came in at A$1.04 billion, a 28% decline from the prior year but marginally ahead of the Visible Alpha consensus of A$1.03 billion. The result was supported by a 4.5% rise in the underlying insurance trading result to A$1.64 billion, driven by premium growth and disciplined expense management.
Natural hazard expenses for the year reached A$2.02 billion, overshooting the company's allowance by A$254 million after 32 separate weather events across Australia and New Zealand. The insurer said thunderstorms in eastern Australia and hailstorms in Southeast Queensland during the first half were the biggest contributors.
Despite the weather-related pressure, the underlying insurance trading ratio held near the upper end of its target range at 11.8%. Gross written premium (GWP) rose 2.7% to A$15.41 billion, largely in line with the Visible Alpha consensus of A$15.42 billion.
Looking ahead, Suncorp expects GWP growth of 3% to 5% in 2027, broadly in line with the Visible Alpha consensus of 3.3%. The growth forecast comes after a slowdown from 6.3% in 2025, which the company attributed to a softer commercial market in New Zealand.
In a move to return capital to shareholders, Suncorp announced a special dividend of 10 Australian cents per share and an on-market share buyback of A$250 million. The company also declared a final dividend of 52 Australian cents per share, up from 49 cents in the previous year.
Shares of Suncorp rose as much as 4.9% to A$19.47 in early trade, marking their biggest intraday jump since late April, while the broader market was down 0.5%.
Net investment returns fell 27.8% to A$553 million, as rising risk-free rates triggered mark-to-market losses on its insurance and shareholders' funds. Suncorp became a pure-play general insurer after selling its banking division to ANZ Group in 2024.