Morgan’s Queensland Investor Conference Mark Ley Head of Investor Relations 21 October 2015
Morgan’s Queensland Investor Conference Agenda 2 Suncorp’s history and operations Insurance – a fascinating industry! Positive industry developments for Suncorp Bank and Life Suncorp’s diversified financial services business model Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Suncorp Group 3 Leading financial services brands in Australia and New Zealand Top 20 ASX listed company $17 billion market capitalisation at 16 Oct 2015 $96 billion in group assets 14,500 employees in Australia and New Zealand 9 million customers End to end ownership of brands Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Insurance – risky business 4 Three key requirem ents » Trust purchase Distribution » Be ‘on the radar’ » Understand the risk Price the risk » Expertise in underwriting » Customer service Manage claims » Scale as a competitive advantage Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Distribution – trusted brands 5 Differentiated offerings, preserving core elem ents of each brand Suncorp Insurance: Personal Insurance market share Lead national brand: • The must-have • Relieve stress in each State (1 ) Queensland insurance • Competitive price positions • Strong community NT 11% connections Qld 34% WA 15% SA 15% State based brand in NSW 29% NSW and VIC: National life stage brand: • Providing certainty • Rewarding over 50s • Service excellence and Vic 32% more comprehensive cover • Showing understanding • Delivering service TAS 36% excellence (1) Roy Morgan market shares (July 15) Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Suncorp Com m ercial Insurance 6 Multi-channel m odel benefits evolving custom er preferences Customer Global, Corporate, Mid Market, SME, Workers Compensation and CTP segments Our Corporate partners Direct Adviser Broker channels and motor dealers Brands (CTP) Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Price the risk…. 7 On an individual property basis Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Manage the claim s 8 Supply chain innovations SMART ACM Parts Hom eRepair Personal injury m otor repairs claim s » SMART repaired 127,000 » Suncorp spends around » Launched in late 2014 and » Short-tail approach to cars during FY15 with $450 million per annum on focused on low complexity claims resolution $400 average cost saving car parts with average home repairs » Focus on fast settlement per car mark-ups of 400% » Targeting an estimated and avoiding protracted » Average repair time » Now a major direct saving of $300 per claim legal disputes reduced to 11 hours from acquirer of parts, Suncorp » Using innovative materials » Benefiting from low wage 5 days entered a JV with US- procurement, technology inflation and benign based LKQ, a global » Expected to grow to 30 and workforce superimposed inflation leader in aftermarket parts sites and 5 SMART Plus and parallel imports » Now established in » FY15 reserve releases of sites during FY16 Sydney, Melbourne and $427m (5.4% of NEP) well » Small acquisitions of Brisbane above the long-run salvage suppliers expectation of 1.5% » Mitigating A$ driven parts » Expect reserve releases to inflation for SMART and be well above 1.5% in the Suncorp aligned repairers short to medium term Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference The insurance business cycle 9 Distribution/Trust Manage the Price the risk claim Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Suncorp’s com m itm ent to custom ers 10 The m ost trusted insurer Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Suncorp Bank Operating Environm ent 11 Considerations for Suncorp Bank Current operating environm ent Suncorp Bank opportunities » Low credit growth and interest rate » Leverage A+/A1 credit rating, strong funding and capital position to environment improve on 3% mortgage market share » APRA’s increase in major bank risk » Ongoing investment in channel and geographic expansion with well weightings for residential mortgages supported home lending campaigns during FY15 to at least 25% (from 16%) levels the » Leverage ‘Bank of the Year’ awards competitive landscape » Growing the core franchise through ‘connected customer’ relationships » Ongoing competition for retail and » Delivery of Project Ignite will enable timely responses to changing business lending customer needs and market competition to support future growth » Increasing regulatory compliance » Suncorp Bank’s advanced risk management tools will inform decision » Subdued business confidence and making in line with its conservatively-set risk appetite political uncertainty although recent » Group-led customer base initiatives will help support growth in highly signs of improvement competitive segments » Prolonged drought conditions in » A long history in agribusiness, a collaborative customer approach and Queensland and Northern NSW a clear risk appetite continues to guide decisions around new business challenging agribusiness credit and management of customers in drought-affected areas growth Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Suncorp Life Operating Environm ent 12 Considerations for Suncorp Life Current operating environm ent Suncorp Life opportunities » Economic headwinds » Conservatively positioned with increased reinsurance and a strengthened balance sheet » Regulatory reform » Forward-looking, conservative bias towards lapse and claims » Technological change assumptions » IFRS/Accounting change » Diversified distribution – IFA, Bank, Direct » Changing customer behaviour » Direct opportunity through General Insurance brands that are known and trusted » Group-led customer base initiatives will help support growth in highly competitive segments Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Suncorp’s Strategic Assets 13 Our focus » Delivering scale cost benefits on third party procured goods / services Cost » Sharing scale on infrastructure (real estate, enterprise technology) and non-unique business services » Enhancing value to our 9 million customer connections by deepening their Customer relationships with Group brands » Demonstrating a diversification benefit through improved Group Risk- based Capital modelling Capital » Maintain A+/A1 credit rating Culture » Operating as ‘ One Company. Many Brands. One Team ’ Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Suncorp Transform ation 14 Continuation of Suncorp Sim plification and de-risking 20 0 9 20 11 20 15 20 17+ Optim ised Stabilise Integrate Sim plify Platform ENABLED BY ENABLED BY ENABLED BY Building Blocks Simplification Optimisation Single view of: •LSP/ NextGen •Claims transformation •Claims •Ongoing SMART rollout •Partnering •Pricing •Super Simplification •Claims •People •Business Intelligence •Procurement •Financials •Technology & Procurement ‘One Company. Many Brands’ Cost Capital Customer Culture Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Optim ised Platform 15 Unlocking the value for our 9 m illion custom ers Connected custom ers Sim plified system s BANK LIFE GENERAL INSURANCE CORPORATE Underpinned by SUNCORP DATA DATA LAKE SERVICES Business Intelligence Sitting within a ENVIRONMENT CLOUD secure and scalable cloud Supported by a unique way of working SERVICE RELENTLESS INNOVATION AGILE/ LEAN PARTNERING CULTURE EXECUTION Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference Suncorp’s shareholder prom ise 16 Sim plified, de-risked financial services group Yield Growth » Dividend payout ratio of 60% to » Efficiency-led profit growth 80% and return of surplus » ‘Above system’ growth in key capital markets » Organic strategy, focused » Multi-brand, multi-channel exclusively in Australia and New approach leveraging the Group’s Zealand 9 million customers » De-risked and simplified business model Suncorp Group Lim ited October 20 15
Morgan’s Queensland Investor Conference 17 Questions? Suncorp Group Lim ited October 20 15
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