Suncorp will roll out yet another cost cutting program aimed at saving $200 million each year by updating its internal IT and operating systems.
Chief executive Patrick Snowball outlined the program to investors on Tuesday.
While he said the program would cost the company $275 million to roll out, he did not reveal if part of the savings would come from cutting jobs.
However Mr Snowball did indicate insurance premium hikes introduced since the spate of natural disasters in 2011 were benefiting the company.
“This company is really going well on an underlying basis,” Mr Snowball said.
“If you’ve got growth going up, you’ve got costs flat and you’ve got pricing right, then with a bit of luck at the end of the day the results should be really good.
“And that’s what we’re after.”
Suncorp expects to achieve its target of an underlying insurance margin of 12 per cent in the full year to June 30, he said, up from 10.8 per cent in the previous financial year.
The latest cost cutting program will involve steps to streamline the business and provide better customer service.
“Simplification will ultimately deliver a lower cost and more productive organisation, with benefits that extend far beyond simple efficiency gains,” Mr Snowball said.
“It will result in an organisation focused on high quality service and value for money.”
Existing policy systems will be replaced, which will improve customer service and reduce duplication within the company.
Insurance licences for Suncorp’s five general insurance businesses – AAMI, GIO, Suncorp, Apia and Shannons – will also be streamlined.
Productivity will be increased through a focus on efficiency, plus the support of two international outsourcing firms, WNS and Genpact.
The new measures will save Suncorp, which has moved more than 203 jobs offshore since 2011, an estimated $200 million each year from 2015/16.
The changes come on top of Suncorp’s three-year transformation that began in 2010.
That program was on track to deliver $235 million in annual savings by June 2013, Mr Snowball said.
But some targets would not be reached on time, including a three per cent market share gain in insurance, because of volatile market conditions.
“It’s true that some of our commitments have been blown off course by factors external to the company, but underlying development has been very successful,” Mr Snowball said.
Suncorp shares gained 13 cents to $7.81.
