Commercial Insurance – profitable risks
Suncorp Group's Commercial Insurance division is one of Australia's leading insurers issuing 400,000 policies each year to protect Australia's business community. Our customers range from large, multinational corporations to family businesses and sole traders.
Suncorp Commercial Insurance had a successful year in a tough market and made critical investments in technology and customer service that will underpin future growth.
During 2010/11 the business delivered a pre-tax insurance trading result of $471 million, up 27%. Our focus on profitability, rather than market share growth, meant underlying gross written premium (GWP) grew modestly, by 2.1%*, to $2.4 billion in a difficult market.
New technology
A substantial investment in underwriting technology and further simplification of our business enhanced our ability to give Australia's commercial sector the support it needed during this year's floods and storms.
Thanks to the General Insurance Pricing Engine (GIPE), we can now look beyond the broad assumptions traditionally used to determine risk and assess risk individually for each business. Although only introduced in May 2011, we are already pricing 66% of small business packages using GIPE technology.
Our strong relationships with brokers are critical to our success with almost three-quarters of our commercial business attributed to this channel. Using GIPE, our underwriters are working more closely with brokers to explain all factors affecting a business's insurance premium, including where discounts have been applied, even where the risks are complex. For brokers with medium-sized business clients seeking assistance with multiple business-related risks, we offer a greater level of service through our recently introduced mid-market underwriting teams.
In 2010/11 we launched Australia's first 24/7 online business insurance for less complex businesses – AAMI Business Online. Demand for online insurance has exceeded expectations – taking more than $1 million in revenue in its opening months and continuing to grow ahead of our plans.
Statutory portfolios
We remain Australia's largest personal injury insurer through our share of underwritten Compulsory Third Party (CTP) and Workers' Compensation business. While we will maintain our focus on improving outcomes for affected people, there is potential to further reduce costs by better managing claims across this portfolio.
Suncorp continues to be the leading CTP insurance provider in Queensland with more than 50% market share. In the New South Wales CTP market, our focus will be on continued optimisation of the Group's two-brand strategy, through GIO and AAMI, to ensure profitable risk selection.
Next steps
Suncorp's Commercial Insurance division is now well positioned for future profitable growth. Through the successful implementation of streamlined systems and more efficient processes, we are confident that we will fulfil our commitment to shareholders to expand our market presence by our targeted 3%.
