From: AAP The Australian May 29, 2012
FINANCIAL group Suncorp says its insurance business is improving from a torrid 2011, but other areas of the business will take longer to meet growth targets due to a volatile market.
Chief executive Patrick Snowball has also unveiled another savings program for the company, aimed at cutting $200 million in costs each year.
Delivering a briefing to investors today, Mr Snowball said Suncorp's underlying insurance business had improved ahead of expectations in the second half of the 2010/11 financial year.
The company now expects an underlying insurance margin of 12 per cent for the full year to June 30, up from 10.8 per cent in the previous financial year.
However, other growth targets Suncorp set in May 2010 as part of a major restructure would be achieved over a longer timeframe than originally expected "due to volatile market conditions".
"I am proud of our achievements over the last few years, particularly around our key commitments to improve the underlying general insurance margin," Mr Snowball said.
New measures announced today are aimed at simplifying the way Suncorp conducts its business, he said.
The program would cost $275 million, but deliver savings of $200 million each year from the 2015/16 financial year, Mr Snowball said.
Productivity would be increased through an "organisational redesign", and employees would be focused on "high value activities", he said.
No information was provided about potential staff cuts.
The changes come on top of Suncorp's three-year transformation that was outlined in 2010 which, Mr Snowball said, was on track to deliver $235 million in annual savings by June 2013.