The bulk of the profit came from the company's general insurance business. Photo: 123RF
The New Zealand division of insurance giant Suncorp has reported a slight lift in half-year profit, while premium income rose 20 percent, as it warned of potential increases to reinsurance costs.
Profit for the six months ended December was $94 million, up 3 percent from last year, while premium income was $1.4b.
The bulk of the profit came from the company's general insurance business - which included AA and Vero Insurance - with profit up 7 percent to $80m.
The life insurance brand Asteron had a more than 12 percent drop in profit to $14m.
Suncorp said the general insurance business benefited from fewer natural disaster claims and improved investment income, but it was partly offset by reinsurance and commission costs.
New Zealand chief executive Jimmy Higgins said Suncorp was closely monitoring global reinsurance markets to see if there might be capacity constraints and price rises similar to 2023.
He said floods in North Queensland and the significant earthquake in Japan might affect reinsurance costs.
Higgins said New Zealand was part of the Australian reinsurance purchase and therefore was affected by Australian and global disasters.
"We need to see how reinsurers respond to recent events outside of New Zealand, to see if their risk appetite and pricing for New Zealand natural hazards has changed, particularly off the back of the major NZ weather events in 2023," he said.
"This guidance, coupled with local supply chain inflationary pressures should provide an early signal on the impact to premiums in 2024. I am hopeful we won't see the level of premium increases our customers experienced in 2023."