Will the newly designated CEO of Suncorp Group Ltd (ASX: SUN) attempt to put his own mark on the company and send it on a new direction?
Shareholders can rest assured that the next group CEO, Michael Cameron, will stay the course and fulfil the growth strategy put in place by the current management. In a conference call, Cameron directly told the media and financial community that he will continue the plans already set in place and that he is a conservative leader who strives to be consistent.
Cameron has been on the Suncorp board for three years now, so he intimately knows what still needs to be done. When asked what his number one priority would be at Suncorp, he replied,
“The key thing is to continue the good work that’s been done to date and just to maintain stability in the business and keep the momentum going.”
Insurance companies restructuring
Among the top insurance companies, restructuring is a common theme recently. QBE Insurance Group Ltd (ASX: QBE) is recovering from the troubles brought on by its failed US businesses by selling related assets. AMP Limited (ASX: AMP) is in the middle of revitalising its wealth management business and cutting costs. This started in early 2014.
Suncorp also needs to adapt its business as more competitors enter the market and consumers switch or even cancel insurance coverage quicker than ever before. The program to shift its computer systems to cloud applications for better customer service and produce cost savings of about $265 million by 2016, isn’t complete.
Conservative leadership consistently applied
Designated CEO Cameron will take over in October after the current group CEO Patrick Snowball leaves the post. He has said he is not going to chase acquisitions to drive growth.
He will bring the consistent leadership he applied to the turnaround of GPT Group (ASX: GPT), where he performed as CEO for the past six years. The property group was previously leveraged from excessive acquisitions before the GFC and Cameron steered it out of trouble with conservative decision making.
That experience will be a great benefit to Suncorp. Business has been improving and annual dividends have doubled since 2011, not including the three special dividends the company has paid in the past three years. Suncorp looks to be a safer proposition for dividend investors in the years to come.
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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.
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