This shift positions Suncorp as a dedicated general insurance player in the Australian market, thanks to last week's completion of the $4.9 billion bank transaction.
In parallel, Suncorp's New Zealand operations are also evolving, with the group in the midst of selling its Asteron Life business to Resolution Life. This $NZ410 million ($375 million) transaction, initially announced in April, is anticipated to close within the coming months.
Fitch Ratings has indicated that it will deliver a more definitive analysis of Suncorp's capital structure around the time of the company’s annual results release, expected later this month. The ratings agency put both Suncorp and its principal non-life insurance arm, AAI, on rating watch negative back in July 2022 coinciding with the bank sale announcement.
Fitch commented, “The anticipated decline in the prism global score post-sale has placed pressure on the company’s consolidated capital base, but this is partially mitigated by the reduced need for extensive capital reserves.”
By shedding its banking operations, Suncorp aims to concentrate on enhancing its core capabilities in the non-life insurance sector, a strategy deemed beneficial for the company’s long-term market standing.
With the forthcoming finalization of the Asteron Life sale, Suncorp's trajectory positions itself unequivocally as a specialized non-life insurer, according to Fitch.
Suncorp's CEO, Steve Johnston, underlined the strategic importance of the bank sale, describing it as a pivotal moment for the company's future direction. "Being a pureplay insurer enables Suncorp Group to channel investments into our business, thereby generating greater customer and community value alongside enhanced shareholder returns," Johnston asserted.
Johnston also emphasized that this focused approach bolsters Suncorp’s innovative capacities, facilitates further digital advancements, and strengthens initiatives to address pressing issues such as climate change.
