Gio Takes Shine Off Suncorp-metway
The Age
Wednesday February 21, 2007
SUNCORP-METWAY will come under increasing pressure from investors to install the management of merger partner Promina to run its combined general insurance business after disclosing its GIO subsidiary has lost NSW market share to rivals AAMI and NRMA.
Both Promina, which owns AAMI, and Insurance Australia Group's NRMA operation, have used their greater strength to attack GIO's position, with the result that the Suncorp-owned insurer lost 4 per cent of premium business in NSW during the group's past half year. Competition was fiercest in the motor insurance market and, to a lesser extent, home cover policies as a combination of local branding and price-cutting ate into GIO's share of the market, according to analysis of Suncorp-Metway's interim results that were released yesterday. While Suncorp's general insurance division saw a 16 per cent increase in earnings to $383 million, which helped the group to better-than-expected net profits of $527 million, analysts were troubled by a "mediocre" performance in the homes and motor sectors. That compared with a 12 per cent growth in the personal lines market experienced by Promina after it revealed on Monday a boom in full-year profits before its $7.9 billion merger with Suncorp due to be consummated next month.Suncorp has increased the interim dividend by 10 per cent to 52? a share. That helped push its stock up 35? to $22.83.
© 2007 The Age
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