The Suncorp Group Ltd (ASX: SUN) share price is edging higher on Wednesday after announcing a new operating model and leadership structure.
At the time of writing the insurance and banking giant's shares are up 0.25% to $9.25.
What did Suncorp announce?
Suncorp has announced a new operating model and leadership structure which it believes will drive further improvements in its core insurance and banking businesses. It also expects the initiatives to accelerate its digital and data driven transformation. The latter of which has increased in importance following the pandemic.
Suncorp's CEO Steve Johnston explained: "COVID-19 has resulted in changes such as the faster adoption of digital channels by customers and new, more innovative and agile internal ways of working. It has changed our perspective on what is possible."
"We now need to seize this opportunity to speed up the execution of our priorities so we can continue to deliver for our people and customers, while growing returns and creating better outcomes for our shareholders," he added.
What changes are being made?
According to the release, the key operating model changes are as follows:
- Accountability for the performance of Insurance (Australia) to be assumed by two executives. One will be focused on underwriting, distribution, brands, marketing, product design, and innovation. The other will be responsible for all aspects of claims management and operations.
- Combining a number of Insurance (Australia) and company functions to create a more streamlined and efficient organisation.
- Greater end-to-end operational accountability within Banking & Wealth and Suncorp New Zealand to drive improved performance.
- Aligning Group Strategy and Technology to fast-track digital and automation capabilities and opportunities.
FY 2021 Reinsurance Program.
Suncorp also advised that it has finalised its catastrophe reinsurance program for FY 2021.
The structure of the program will remain largely consistent with prior years. However, the maximum loss limit is lower than FY 2020 as a result of reduced Commercial Insurance exposures in Australia and increased building coverage through the Earthquake Commission in New Zealand.
Suncorp's maximum event retention remains at $250 million. The main catastrophe program includes one prepaid reinstatement which covers losses up to $6.5 billion for a second event and two further prepaid statements at the lower layer. These will cover losses up to $500 million for the third and fourth events.
In addition to this, Suncorp has purchased dropdown aggregate protection and Aggregate Excess of Loss (AXL) cover.
Finally, management also provided an update on its COVID-19 impact. The impact on its profit and loss is expected to be broadly neutral in FY 2020. Though, this is excluding investment market movements and Bank impairment losses.
