Australian Insurance Giant Sees Profits Crash 67% Due to Weather Disasters

Major Australian insurer Suncorp Group reported devastating first-half earnings that dropped 67% due to massive weather-related claims. The company faced nearly $1.32 billion in natural disaster costs from nine major weather events across Australia and New Zealand.

A major Australian insurance company saw its profits crash by more than two-thirds during the first half of its fiscal year, according to financial results released Wednesday.

Suncorp Group reported that severe weather disasters across Australia and New Zealand devastated its bottom line, with the company paying out A$1.32 billion (approximately $935 million) in natural disaster claims during the six-month period ending in December.

The insurance giant faced nine separate major weather catastrophes, including destructive thunderstorms, coastal storm systems, powerful windstorms, and widespread flooding that battered communities across the region.

These disaster-related expenses far exceeded the company’s budgeted allowance of A$866 million for the half-year period and represented more than double the A$503 million in similar costs from the previous year.

Adding to the company’s financial troubles, investment returns declined by 31% to A$259 million compared to the same period last year.

The combination of massive weather claims and reduced investment income caused Suncorp’s cash earnings to plummet to A$270 million for the first half of the year, down dramatically from A$828 million in the previous year’s corresponding period.

Financial analysts had projected earnings of A$311.2 million, making the actual results significantly worse than market expectations.

Following the disappointing financial performance, Suncorp announced it would pay shareholders an interim dividend of 17 Australian cents per share, a substantial reduction from the 41 Australian cents distributed during the same period last year.

The company completed its transformation into a specialized insurance operation in 2024 after selling its banking operations to ANZ Group.