Big Day Out For Suncorp
Sydney Morning Herald
Friday July 18, 2008
SUNCORP yesterday helped lift some of the gloom surrounding the battered insurance industry, with renewed support from one of the main credit ratings agencies, Standard & Poor's, for its $8 billion acquisition of the Promina group.
Suncorp - plagued by huge bills from severe storms in Australia over the past two years and the fallout from the sharp drop in financial markets that has also hit its main rival, Insurance Australia Group - had so far delivered on its targets for the deal, S&P said.The Brisbane-based group, which now owns the AAMI, Vero and GIO insurance brands, had made "solid progress" in integrating the Promina businesses since the takeover 15 months ago, S&P said.The credit ratings agency said that since then Suncorp had managed to increase premium revenue and underpinned its capital base while keeping a likely loss of customer numbers to a minimum. It also increased its expected annual savings target by $100 million to $325 million - a figure Suncorp now hopes to achieve earlier than originally expected.As a result, S&P confirmed Suncorp's status as an "A-plus" rated company. However, S&P said the group would have to wait between six and 18 months for a better report card and a possible ratings upgrade on the Promina deal, given a likely earnings fall from storm damage claims and the economic downturn. The praise helped lift Suncorp's shares by 32c to $12.34.
© 2008 Sydney Morning Herald
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