The Suncorp Group Ltd (ASX: SUN) share price has fallen slightly tp $8.82 after the company’s AGM today.
The AGM confirmed Suncorp’s performance during FY20 and reported on the progress of changes for the post-COVID world. Due to divestments of Australian Life, Capital S.M.A.R.T, and ACM Parts businesses, Suncorp was able to generate windfall earnings. This was despite the impacts on the insurance industry of bushfires, drought and the COVID-19 pandemic. However, more interesting are the indications of future performance.
Suncorp in the post-COVID-19 world
The company pointed to the positive impacts of the work from home phenomenon during the lockdown. Suncorp has been developing flexible work capabilities since the Brisbane floods of 2011, and is working on more hybrid models in the future. It also noted that the ability to attract a wider range of talent was significant, while there were also efficiencies to be gained.
Moreover, the lockdown has accelerated transformation to digitisation and automation. Thus removing pinch points in the process, and providing some hope for productivity improvement.
Suncorp chair Christine McLoughlin said artificial intelligence and its underlying technologies were “reshaping the insurance industry”, from distribution, to underwriting and claims. “For example, connected devices and sensors including drones can work together to speed up traditional claims assessment methods, or even detect issues before they occur,” she said.
Commenting on the issue of transformation, Suncorp CEO Steve Johnson told shareholders:
Our program of work to reset our business post-COVID-19 is well underway. We have made changes to our business model, the structure of our group and to our team.
We are removing duplication, streamlining decision making and ensuring everyone at Suncorp understands their role in driving improved customer and shareholder outcomes in our core insurance and banking businesses.
On future risks, Suncorp said the impact of climate change was one of its most material issues. The company’s climate related plans and policies support advocacy and collaboration to drive better decisions. Mr Johnson said that increased climate change and risk increased costs. He added that out of every dollar in disaster funding, only 3 cents was spent on preparation, with 97 cents spent on recovery.
Suncorp share price performance
Although the share price is 1.62% lower in today’s trading, it has risen by 4.9% over the past month. At the time of writing, it is trading at a price to earnings (P/E) ratio of 18.5, and has a trailing 12-month dividend yield of 4.08%.