Suncorp considers sale of life unit

Australian insurer Suncorp Group Ltd has said it will consider the sale of its AUD2 billion (USD1.5 billion) life insurance division, becoming the latest firm to look at reducing its exposure to the troubled market.

The Brisbane-based company announced a review of “strategic alternatives” for the life insurance unit as it reported a five percent rise in half-yearly cash profit, below forecasts for about eight percent growth, according to two analysts.

Australia’s life insurers have faced rising claims rates and more policy cancellations since media revealed the use of discredited methods to refuse legitimate claims for insurance payouts.

Suncorp, Australia’s second-largest general insurer by market share, reported a cash profit of AUD584 million for the six months ended December 31, up from AUD556 million a year earlier, after insurance premium income growth of 4.3 percent.

Chief executive Michael Cameron said options for the life insurance business included reinsurance deals, partnerships and the sale of all or part of the business. “It is too early to give detailed guidance on what might be the benefits of the alternatives,” he told analysts.

Cameron said Suncorp would remain a distributor of life insurance under any scenario as part of its strategy of being a one-stop financial shop for customers.