Insurer Suncorp has improved full-year cash earnings by 42 per cent, and rewarded shareholders with a special dividend and on-market buyback.
The company behind brands including AAMI and GIO on Monday said gains at its insurance and banking operations helped earnings climb to $1.06 billion.
Its insurance division recorded its best improvement since 2013, with the value of premiums sold increasing by 5.5 per cent.
The banking business was boosted by home lending improving in the second-half by 0.8 per cent, helped by record low interest rates and easy credit conditions to help the economy through the pandemic.
Moody's Investors Service vice president Frank Mirenzi said Suncorp's banking profit was also helped by the lender releasing money previously set aside for bad debts during the pandemic.
Australia's major banks are tipped to act similarly this earnings season after they avoided incurring the level of bad debts feared earlier.
Suncorp boss Steve Johnston said the dividends and share buyback were made possible by the group keeping its balance sheet strong during the pandemic.
"The outlook for the business and the economy is more positive and we have reviewed our balance sheet through this lens," he said.
Investors will receive a final dividend of 40 cents per share and a special dividend of eight cents per share. Both will be fully franked.
The insurer will also take up to $250 million worth of shares out of the market through a buyback.
However, more frequent extreme weather occurrences and the damage these cause, continues to be a worry for the insurer. Costs from claims of this sort amounted to $1.01 billion through the year, $60 million more than Suncorp had provided for.
These 'natural hazard' costs, as insurers call them, particularly affected the New Zealand business. Suncorp's cash earnings from New Zealand declined by 18.4 per cent on the previous financial year to $200 million.
Shares in the insurer, which also owns brands including Apia, Bingle, Shannons and Terri Scheer, surged by 8.35 per cent to $12.85 by 1444 AEST, after earlier hitting a high of $12.93.
