Suncorp outlines customer investments, digitisation as key to business improvement

Suncorp has attributed a 4.7 per cent increase in customer deposits across its product portfolio to a combination of new product offerings, increased digitisation, and simplified processes driven through its increasingly ecosystem-led approach to customer engagement.

The ASX-listed insurance and banking giant today reported net profits after tax were down 1.5 per cent to $1.059 billion in the 12 months to 30 June 2018, off cash earnings of $1.098 billion. Second-half results were stronger, however, with the group chalking up a 34 per cent uplift in NPAT compared for its first half, triggered by a 79.9 per cent rise in Australian insurance NPAT.

In addition, Suncorp claimed net benefits from its FY18 business improvement program of $40 million, exceeding targets and driven by investments into digitisation.

Across divisions, the Australian insurance business represented the largest portion of the piece, with a NPAT of $739 million, up 2.2 per cent year-on-year. Motor and home were particularly stronger performers with a 4.7 per cent increase in gross written premiums, and the group also improved operating expenses in the second half off the back of a decline in underwriting expenses as well as the business improvement program.

Suncorp has been putting the emphasis on its business improvement program over the past year, an initiative aimed at improving customer experience, driving efficiencies and embedding a culture of continuous improvement. Key elements delivered in FY18 under the business improvement program include further digitisation of the customer experience, sales and service optimisation including store footprint optimisation and digitisation, supporting more self-service transactions, and improvements in the contact centre.

Suncorp CEO and managing director, Michael Cameron, described the balance sheet as robust and said momentum is there to drive confidence in FY19 targets. He highlighted the business improvement program and work to be more customer-led as key reasons for this.

“The business improvement program has exceeded our net benefits target by $30 million, while digitisation of the business is beginning to drive our strategy to increase the number, and range of services, that our customers can choose to access through Suncorp,” Cameron stated.

Customers and the marketplace

The business improvement program ties into its ambitious long-term plans to bring its portfolio of brands together to fulfil customer needs in the form of a marketplace. The ‘One Suncorp’ strategy, unveiled back in 2016, will unite five previously separate businesses into one business model and commencing plans to create a ‘marketplace’ of brands that leverage integrated third-party components and a common digital platform to better connect with customers. This involves building an ecosystem of partners that will provide a suite of relevant products and services and that customers can tap into in one place to suit their individual needs.

According to the latest financial report, Suncorp spent $146m on accelerating its marketplace investment in FY18. One key component delivered in February is the Reward and recognition program, which now has 400,000 members and seen a 3 per cent uplift in products per customer, as well as a 1.7 uplift in retention.

The group also claims to have created a single digital customer experience via its new Suncorp App, launched in July, and digital portal.

On top of this, Suncorp has released seven ‘ecosystems’ or integrated offers, designed to allow customers to bundle complement solutions from across its portfolio. These seven solutions are focused on motor and home.

As a result, the group cited a consumer Net Promoter Score (NPS) rise to +7.3 (+5.9 in 2017), a business NPS lift to +2.7 (-0.6 in 2017). Suncorp also saw digital users increase from 2.51 million to 2.74 million, the proportion of digital claims increase nearly 2 per cent to 12.4 per cent, and zero-touch digital claims lift 20 per cent to 33 per cent year-on-year. The proportion of digital sales is now 25 per cent.

To support customer-facing improvements, Suncorp has deployed LiveFlow methodology to simplify and speed up processes across core banking and insurance offerings. The company claimed this has already cut down times for home loan origination, servicing and SME loan origination.

The claims supply chain is also being redesigned, starting with motor insurance claims, a move again aimed at improving efficiencies in dealing with claims as well as customer experiences through such processes. Examples include introducing Uber as an option for SMART repair customers, as well as zero-touch digital claims lodgement for selected services.

In FY19, Suncorp said it’ll look to continue to increase digital adoption and services for customers, further invest in digital capability and analytics around claims processing and fraud protection, better capitalise an API layer to drive cross-business integration, and introduce a ‘Future Ready Academy’ focused on workforce efficiency.

According to its financial report, Suncorp will spend $79 million on these various improvements in FY19, including $22m on digitisation of customer experience, realising a net benefit of $195. Expenses in FY20 are expected to then drop to $62m and realise net benefits of $329m.

“Like any major program over time, we would expect movements in expenses and benefits between categories. The key point is all members of the team are held to account to deliver the total target,” Cameron stated. “Our customer priorities include continuing to digitise the business, matching customer requirements, and increasingly personalising our services.”

More of CMO's coverage of Suncorp's marketplace and brand strategy

• CMO interview: Hitting the ground running at Suncorp
• Suncorp touts marketplace investment for customer payoffs in latest financials
• What 14 years at Suncorp taught Mark Reinke about CX
• CMO Momentum 2017: Why Suncorp's Mark Reinke sees platform-based business as the way of the future
• How Suncorp plans to reduce churn with its connected customer strategy
  
• How Suncorp’s digital service arm seamlessly manages customer enquiries

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu