Suncorp Group Aktie

Good morning, everyone. Standing room only for the external participants in the Sydney office here and many, many people, I'm sure, online and listening in. So welcome, everyone.

Let me begin, of course, by acknowledging the traditional owners of the lands on which we meet and pay our respects to elders past and present. As usual, I'm joined by our CFO, Jeremy Robson, and we'll present the financial results for the first half of financial year '26. We'll, as usual, run through the presentation. And of course, we have other members of the leadership team here who can join us and support us for the Q&A session that follows.

As always, I'll start with a brief recap of how we believe long-term value is created at Suncorp. This is a slide I put up every time. It's our purpose slides where our purpose delivered through our people, supporting our customers and the community, but in that order, will always result in a sustainable and growing business for our shareholders.

So to the headline result. And at the outset, I would acknowledge that this has been a challenging half for the whole insurance industry as we've responded to the extreme weather. The group's net profit after tax of $263 million and cash earnings of $270 million were well down when you compare it to the prior period as we managed 9 separate weather events at a net cost of $1.32 billion, which is $453 million above our allowance for the half year.

Of course, I'd also make the point that the NPAT in the prior period included the one-off gain on sale of Suncorp Bank, which was $252 million. Net investment income of $259 million was also down on the prior period. And of course, it was impacted by the negative mark-to-market movements in the bond portfolio. However, of course, the flip side of this is that investment -- the investment portfolio is currently yielding 5%, and that creates a tailwind for future earnings and future margin. As you know, insurance profits are subject to the vagaries of weather and investment markets with favorable periods driving higher profits.

But as we've said consistently, there are also times when the reverse occurs. And consistent with that purpose of ours, our focus as a general insurer is on creating long-term value. And while we've experienced significant natural hazard activity in this half year, the way we show up to support our customers during these events is what ultimately drives and underpins long-term value creation.

So while the headline results have been impacted by those 2 factors, the underlying business continues to perform strongly, and that's reflected in the solid growth of our consumer business and our underlying insurance trading ratio, which has remained at the top end of our guidance range at 11.7%. We've also further consolidated our market-leading expense ratios. As you'll hear later in the presentation, our key strategic initiatives, the digital insurer program of work and our AI program are on track to deliver material value. And as Jerome will point out, we have maximum flexibility when it comes to the structure of our reinsurance program.

Balance sheet and capital position remained very strong, and the board has determined an interim fully franked dividend of $0.17 per share, representing a payout ratio of 68%. Our disciplined approach to capital management enabled us to complete $168 million of our on-market share buyback program over the half year. And we'll recommence the buyback post the results and continue to target around $400 million by the end of FY '26.

So on this slide, I've focused on growth, which I know is going to be a key topic of interest growth right across the business. And at an aggregate level, our business has delivered premium growth of 2.7%. Below the headline number in consumer, strong premium growth was driven by both rate and unit count. Home written premium grew 7% with unit growth of 0.4%.

Now pleasingly, in Home, we continue to grow our share of low and medium natural hazard risk and we shrink that which we classify as high or extreme. Our motor portfolio grew by 5.8% with unit growth of 2%. Again, -- that's a very satisfying outcome in the context of a highly competitive market. In Commercial and personal injury, GWP growth was achieved across most portfolios, but is, of course, moderated from its prior levels.

In CPP, portfolio growth was driven by the pricing increases that were implemented across New South Wales and most recently, in Queensland. Now our New Zealand business tells a slightly different story. Growth contracted over the half and was impacted by challenging market conditions, particularly in commercial due to the softer market environment and, of course, heightened competition. Jerome will go through all the GWP moves, adds and changes in more detail in just a moment.

Now given the significance of weather events over the half, I've included this slide, which provides a deeper insight into the profile of the first half natural hazard events. As I mentioned earlier, we dealt with 9 declared natural hazard events through the half and we managed more than 71,000 natural hazard claims at that net cost of $1.3 billion.

On the bottom left-hand side of the slide, you can see the top loss causes Hal is by far the most significant contributor, accounting for approximately 3/4 of event-related claims and driving claims costs of more than $700 million from hail. The majority of those events arose in the October and November event periods. Now the financial cost of these events seriously underestimates their true impact on the communities. I've been on the ground across many of the affected areas, and I've seen the great work our teams are doing to support our customers in the aftermath of the events.

And etiological and our disaster management capabilities, which many of you have seen and are housed in our event management center in Brisbane have accelerated our response while our mobile disaster response hubs have been active across 27 affected communities, engaging with customers on the ground approximate to the events that they've just experienced. Our scale in motor insurance repair meant we could quickly stand up a pop-up motor assessment center, where more than 4,000 vehicles were assessed over the course of 2 weeks, significantly speeding up the repair process.

Now it's in moments like this, long-term value is either created or eroded. And while the impact on profits will be felt in this half year, I'm very confident that the way we have mobilized to support our customers will be rewarded over the medium to longer term.

So with that, I'll hand back to Jeremy hand over to Jeremy to go through the result in more detail.

All right. Thanks very much, Steve, and good morning, everyone. I'd like to start off by reinforcing a few key points on the group results before we get into the details. Now whilst as Steve said, our reported NPAT was impacted by elevated natural hazard losses and mark-to-market losses, our underlying insurance result was up 6%.

I just want to emphasize a couple of key points about the result. We delivered good unit growth in both home and motor, demonstrating the organic strength of our brand portfolio. Whilst the Suncorp business has elements that are exposed to the global insurance pricing cycle, these are a smaller subset of our business. Most of our portfolios are driven by input costs and upward supply chain pressures and natural hazard costs remain a feature.

We expect acceleration in GWP growth in the second half including the impact of higher pricing already implemented across a number of portfolios. The higher yields that gave rise to the first half mark-to-market losses were a positive going forward and give us an exit yield of nearly 5%. Our expense ratio reduced a further 40 basis points this half, reflecting our ongoing control of costs at the same time as investing in the business.

Our capital position is strong. and we have reaffirmed target for the buyback of $400 million for FY '26. We have optionality on reinsurance as markets continue to soften, which we're going to explore further. And we remain confident that our natural hazard allowance is set at an appropriate level. I also note the strong prior year reserve releases of $65 million, 90 basis points. We saw releases ahead of expectations in commercial and workers but with some offset in consumer.

Okay. So now let's get into the results in a bit more detail, and we'll start with underlying ITR. The underlying ITR remained in the top half of the 10% to 12% range at 11.7%. And dynamics included the earn-through of pricing, continued improvements in the expense ratio and lower reinsurance costs, partially offset by the increased resilience built into the natural hazard allowance. On a portfolio basis, consumer benefited from the earn-through of pricing with margin remediation in home.

For New Zealand, while the portfolio increased 150 basis points, the group contribution was impacted by the relatively lower growth and the weaker New Zealand dollar. The commercial portfolio was impacted by pricing pressure in property and claims repair costs in fleet with margin expansion in the CTP portfolios following our disciplined pricing actions.

Looking forward, we expect the second half margin to continue to be in the top half of the target range with the earn through of CTP price increases and platforms remediation but we do expect some headwind from New Zealand with ongoing moderating prices.

On to the next slide then, and I'm going to quickly touch on overall growth before moving to the divisions. Growth in the first half was particularly strong in the consumer portfolios with unit growth across home, motor and AA in New Zealand. GWP growth was good in CTP and fleet but workers was impacted in the first half by lower prior year adjustments. And whilst more muted than the overall market, the commercial portfolios in both Australia and New Zealand were impacted by the current cycle. We expect to see acceleration in GWP growth in the second half, and you can see that on the chart, to deliver full year '26 growth around the bottom of the mid-single-digit guidance range.

In motor, inflation in parts and labor is ongoing and pricing has been adjusted to reflect this. We expect commercial growth to pick up with further product launches in Vero Specialty Lines and rate remediation and platforms. Significant pricing has gone through the Queensland and New South Wales CTP portfolios, and this will continue into the second half, and workers will also benefit from ongoing additional rate. And then we see price decreases are expected to moderate in our New Zealand commercial portfolios. I do note, of course, that the outlook is subject to the competitive environment, particularly in the commercial portfolios.

Now in the context of growth, I'd like to remind you of how we see insurance pricing cycles work at Suncorp. On the chart, I've divided our portfolio into 2 broad categories, those where pricing is primarily driven by input costs. and those that are more exposed or directly exposed to global capital flows. In the first group, our portfolios that require important capabilities. So that's things like established supply chains such as motor repair networks and brands and brand prints. This portfolios are subject to cycles that are driven by input costs, such as supply chain inflation, natural hazard events and reinsurance costs.

In the second group is business with direct exposure to global capital flows. Now less than 10% of our book is in this group and includes some of the property and professional indemnity portfolios in Australia as well as much of the New Zealand commercial business. The 2 key points I'd like to leave you with here are: firstly, insurance input costs tend to differ to CPI, and they continue to be elevated with ongoing inflation in motor and home repair chains as well as natural hazard costs.

And then secondly, while Suncorp does have exposure to the global capital insurance cycle and our commercial portfolios, we have a good degree of portfolio diversification across the group. I also note, we benefit from this softer cycle in our reinsurance program the whole of our business.

Okay. So I'm now going to move to divisional results and start with Consumer. In Motor, GWP increased 6% with good unit growth and moderating AWP albeit with further pricing put through late in the half in response to ongoing repair cost inflation. In Home, GWP grew by 7% as we continued to price for higher natural hazard allowance and underlying claims inflation Unit growth was positive but reflected the continued low system growth.

Now pleasingly, you can see on the chart on the bottom left, we saw an improved portfolio mix with a higher proportion of low-risk homes. Underlying ITR for Consumer improved from 9.4% to 9.9%, with margin remediation ongoing in home and motor at the top end of its range. Looking forward to the second half, we expect consumer margins to expand modestly as pricing earned through motor but with some moderation in home due to the phasing of the natural hazard resilience allowance into the second half.

Next then to commercial and personal injury. Performance was mixed, reflective of our diversified portfolio. Fleet growth was strong in the double digits, reflecting our market-leading capability in this segment. growth was good, reflecting the results of our disciplined approach to pricing.

In Queensland, GWP was up 9%, and we continue to engage constructively with the Queensland government on reform, including a premium equalization mechanism. The Vero Specialty Lines continues to grow with 4 new lines now launched and live in market. But then the property and propene portfolios reflected the softer cycle, albeit to a lesser extent than overall market. and works, as I said before, was lower with the impact of prior year adjustments on premiums. Underlying ITR was a little lower with improved margins on CTP being offset by competitive pressures on property and claims inflation in fleet. Importantly, property and propene margins remain at the top end of the range and provide important flexibility as we manage the portfolio through this current pricing cycle.

Turning then to New Zealand. The business continues to perform strongly from a profit perspective with an underlying ITR comfortably above the top end of the range, and that is claims inflation and reinsurance costs have moderated rapidly. Whilst the business is well diversified, GWP contracted due to varying pressures across the portfolio. In consumer, unit growth continued in our Direct AA business in both Home and Motor, whilst the intermediated channel was impacted by the exit of a brokered book of business.

GWP growth for commercial continues to be impacted by the softer market conditions as well as the impact of a New Zealand -- a weaker New Zealand economy. But we are seeing some signs of a bottoming of the commercial pricing market as well as an improved outlook for the New Zealand economy. Going forward, we expect margins to remain attractive, albeit to normalize down towards the top end of the New Zealand target range as moderating prices earned through the book.

Okay. Now to natural hazards, and it's evident, as Steve said, the half was significantly impacted by elevated natural hazard events. The experience of $1.319 billion was $453 million above the allowance. Now just to put this into context, first half 26 for us was the highest retention ever in the half. 1 of the most severe halves this century, and it was significantly impacted by hail events, and those are relatively random in terms of weather patterns and less clear connection to climate change dynamics.

The first half result also included an increase in attritional natural hazard claims costs, and that was primarily driven by the higher rainfall and wetter weather conditions that were prevalent over the half. Now whilst this is a disappointing result, it should be taken in the context of a natural hazard allowance that is sufficient in 7 out of the last 11 years, including this half and 4 over the last 6 years, and that's based on the current reinsurance program and current exposures and costs. Over that 11-year period, we would have cumulatively been below the allowance by over $1 billion, again, including this first half result.

So we remain confident that our natural hazard allowance with the additional resilience flagged at the full year '26 results is appropriate. And we note that short-term variability is expected, and it's the long-term performance that drives value. Looking forward, the second half allowance remained the best guide for expected natural hazard experience in the second half of this year. And I do note that the January performance, and that's with the bushfires in Victoria and the storms and floods we saw in Sydney earlier in the month was in line with the allowance.

Next, the related topic of reinsurance. As previously flagged, we continue to review our program against our reinsurance framework and our key objectives are optimizing capital efficiency relative to our cost of equity and managing volatility, all with the overarching goal of maximizing long-term shareholder value creation. Our FY '26 program, best met these objectives were placed in July last year, but a softening market may provide the opportunity to reassess additional cover.

In the meantime, our program provides robust protection, limiting exposure to the need for reinstatements as well as drop-down cover against large events in the second half now enlivened. That means our maximum retention for further events will be limited to $260 million for our next large event and further limited for any subsequent large events. And of course, we'll continue to review our options on reinsurance leading up to the July renewal, and we'll update the market accordingly.

On then to investment performance. The average underlying yield on insurance funds was lower than the PCP, reflecting lower risk-free returns and lower inflation-linked bond carry I do note our tech reserve investment managers, again performed strongly with good alpha. The higher yield environment continues to support an attractive exit yield, which is currently around the 5% mark.

Now we've made some changes to our investment allocations in line with our strategic asset allocation. We've reallocated from inflation-linked bonds to structured credit and insurance funds and rebalanced from cash into property in shareholders' funds. Going forward, we'll continue with this rebalancing, but being mindful of the market outlook for inflation in particular and as suitable opportunities arise.

Turning then to expenses. Operating expenses increased by 4%, and that's whilst our total expense ratio reduced by a further 40 basis points. Expense growth was largely in our growth-related costs. That's driven by investment in the digital insurer policy admin system and investment in AI capability. We also increased our spend in marketing in response to elevated competitor activity and then run the business expenses increased modestly as productivity improvements continue to help offset wage and technology inflation. Going forward, we aim to keep our run costs as low as possible through operational efficiencies as we continue to invest in our key strategic priorities of platform modernization and operational transformation, including AI.

And so finally for me then to capital. Our capital position remains strong with $700 million of CET1 above the midpoint of our target range. And I'll just make a couple of points on the usual capital waterfall. The final dividend of $0.17 per share represents a payout ratio of 68%. It's around the midpoint of our target range and is fully franked. The GI capital usage you see on the waterfall was largely from the higher natural hazard experience enough, some business growth and then some of that investment portfolio rebalancing that I referenced.

The other category you see largely relates to the weaker New Zealand dollar. And then the completion of the $168 million of on-market buybacks in the first half was largely in line with our expectations. Importantly, the buyback is expected to resume after the first half results. And again, reaffirm that we continue to target $400 million for FY '26. Going forward, capital access to our needs is expected to be returned to shareholders using on-market buybacks, as we've previously flagged. I do note that we have a preference for managing capital in the top half of the range as opposed to hard on the midpoint in order to optimize ongoing capital flexibility.

And with that, I'll hand you back to Steve.

Okay. Thank you, Jeremy. And moving to the next slide. And here, we provide a quick update on our progress in delivering our digital insurer platform modernization program of work. Now at the bottom of the slide, I remind you of the progress that we have made in replatforming both our contact center and our pricing environment in Australia and in New Zealand.

As we touched on in our investor update last November, our first release of our new policy administration system went live in April last year for new home and motor portfolios in our AA Insurance New Zealand joint venture. The system has started to deliver more simplified underwriting and greater automation, and we remain confident the expected benefits that are baked into the AI business plan, but also into the whole digital insurer business plan will be realized over time.

We're now well into the delivery of our second release in our AAMI brand, which is, of course, our flagship national consumer brand. Now we're targeting this release for Amy Home and Motor new business around the middle of this year and migration of existing policies at renewal, which will follow soon thereafter.

But before I move to the outlook, I wanted to update you on our approach to AI, which as you all know, is a topic of key global interest, particularly as it relates to insurance. Now we spent a lot of time on this at our Investor Day back in November, but as usual, with these technology-based disruptions, a lot has happened in the past 4 months.

On this slide, I've recapped the Suncorp AI story so far. It describes how we are well placed to leverage AI to improve customer outcomes and importantly, to support long-term returns. We believe we are uniquely placed to be towards the front of the AI adoption curve. We have market-leading AI capability within our Suncorp team, and we have established partnerships with leading AI technology companies and BPO partners. With these partners know us know our processes and know how AI can be redeployed -- can be deployed alongside automation and process redesign.

Our agentic AI program of work that we showcased at Investor Day is now in full-scale delivery. We are on track with initial deployments across our claims and customer services processes, though we see opportunities right across the value chain of insurance to enhance the customer experience and to transform end-to-end processes.

Additionally, as I outlined on the previous slide, we continue to progress our broader technology road map, which is replatforming our business with SaaS-based cloud-enabled core systems, where importantly, AI is embedded into the core. We already have AI enabled across our enterprise-wide telephony platform and our earning pricing engine. And on this slide, I provided a snapshot of just some of the AI capabilities that are embedded into the core replatforming work program will work, some of which is already in place and more to come.

As a manufacturer of insurance, we see material opportunities for AI to improve product design in a hyper personalized insurance future and to transform claims processes from a customer perspective, all along reducing our loss and expense ratios and importantly, addressing insurance affordability. As a distributor, we see opportunities for AI to both strengthen the effectiveness and deepen the customer engagement across our market-leading brand portfolio. This will equally apply to consumer and commercial or as premium pills move between those portfolios over time.

In summary, AI will significantly improve our capabilities and efficiency in both manufacturing and distribution -- but over time, it will allow us to carefully and selectively assess other opportunities across the insurance value chain.

So to the outlook, and I'd like to summarize a few of the key points for the full year. GWP growth is expected to be around the bottom of the mid-single-digit range given the current cycle in commercial in Australia and New Zealand. The underlying ITR is expected to remain in the top half of the 10% to 12% range. The operating expense ratio is expected to be approximately 50 basis points below FY '25, but with an increasing proportion of expenses allocated to growing the business.

We maintained our disciplined approach to the balance sheet, targeting a payout ratio around the midpoint of that 60% to 80% range of cash earnings. And finally, as we've covered off, we'll be restarting the buyback as soon as possible with the target of around $400 million over the course of the year, the full year.

So in summary, our team continues to rally around a purpose. We are focused at this point in time on the needs of our customers, supporting them with best-in-class event response capability. Our brands remain well supported, and our multi-brand strategy allows us to reach a broader customer base. We are investing in modern technology, which alongside AI transformation will deliver leading customer experience and competitive pricing. We ended the second half with a strong capital position, active capital management, all of which will deliver improved shareholder returns. And as Jeremy has covered off, we have optionality on reinsurance as markets continue to soften.

So with that, let's move to questions. Why don't we just work our way along the front panel here, Nigel?

It's Nigel Pittaway here from Citi. First question, just I mean, can we just clarify exactly what we mean by bottom of mid-single-digit range? Does that mean 4% to 6% is the range and 4% is the bottom. Is that a correct ratio?

It's pretty sensible arithmetic to me Nigel, yes, mid-single digits. We would suggest would be 4% to 6% and bottom is 4%.

Okay. Fair enough. Okay. Moving on to Motor then. I was wondering whether you can sort of elaborate on what actually surprised you in terms of motor inflation in the period. You've obviously made some comments there about pressures across repair and total claims, but I was wondering for a bit more color there. And also whilst we're still on motor, I think you mentioned that you put through price increases towards the end of the half, which seems to have gone the opposite direction to one of your key competitors. So I was wondering whether you've seen any change in competitive dynamics in the first 6 weeks of this half?

Quickly just -- and Jeremy can top up on lease potentially as well around what we're seeing in inflation. At the highest level, the discipline that we apply is that we monitor inflation very carefully across the whole insurance portfolio. And we've often said that you can't look at insurance inflation through a proxy at CPI. Some of the work we've done over the past 6 months to try and understand the differential between CPI and insurance inflation would put insurance inflation running at between 3% and 4% higher than CPI across our portfolio.

So in Motor, let's start with Motor. Obviously, some of the dynamics might have been masked by the significant reduction in inflation as the repair chains became more accessible post COVID. So a big, big disruption, Motor. Those repair chains have broadly settled out, but labor rates remain high. That's the first point to make.

The second point to make is when you think about motor, often we tend to look right over the horizon to an automated vehicle world. But what's going on in motor at the moment, there is a very significant short-term dislocation with electric vehicles coming into the market, hybrid vehicles coming into the market, particularly with Chinese origin. We've seen a lot of that happen. And that will disrupt supply chains for a period of time. We saw that with the introduction of the first round of electric vehicles, where periods of time to get supply chains working and get repair capability where it needed to be, and we're seeing a little bit of that in the network at the moment.

We're also seeing elevated costs continuing in labor, labor rates across repair. Not to the extent they were post covered, but certainly still elevated relative to what they might have been pre-covered. And we're seeing some impact of parts supply, some parts inflation a bias to replace parts now with the technology that's embedded in them versus repair them as might have happened again 5 or 6 years ago. They're all the factors that we monitor very carefully.

And again, to the overarching methodology for the group, we believe we need to focus on cutting inflation in our pricing, and that's what we tend to do, and that's what we saw towards the back end of last calendar year and into this year. So those pricing increases have gone in, and we're very confident that they will be sustained.

On the home side, to jump forward to probably your next question, the underlying dynamics in home are not dissimilar to what we've seen before. So on the hazard book, we've obviously had a pretty challenging half. with a high predominance of hail-related events and we will go back through our modeling to understand the allocations of hazard premium to hail and whether the loadings that we put across the whole portfolio continue to be relevant. And I expect that there will be some adjustments to pricing, particularly in some geographies off the back of that.

And also in New Zealand, where we tend to see the New Zealand numbers as small numbers in relation to the group. But relative to the size of the New Zealand market, they are quite material events that have been going through in New Zealand now for the past couple of years, had some changes in pricing there.

On the home side, the underlying factors continue to be the case and they relate largely to large loss fire severity of large loss fire. We've talked about lithium batteries that continues to be a dynamic, stabilized a bit in the portfolio, not so much frequency but more severity. And similar trends in scope of liquids, where frequency is moderated or stabilized and severity continues to be reasonably well elevated.

The biggest dynamic in home, and we'll talk about this, I'm sure, for the next 5 years will be the supply chain and the pressures that are on trade availability, particularly in some geographies, but that will flow through nationally. And so when we think about inflation in the portfolio, we think about that dynamic that elevates relative to CPI, and I think we'll continue to have it elevated for some period of time. and our overarching sort of methodology within our group and discipline within the group.

And you saw it when we stood out of the market previously and -- we're prepared to do that from time to time when we don't have the confidence around the trajectory of inflation. But where we do have confidence around it, we will price to it in a disciplined way. And I think that's been evident in our previous performance and continues to be the case. Do you want to...

Steve, I'll just add just back to Motor and Home for that matter. I'm not sure any of those inflation signals that we're seeing, particularly idiosyncratic to Suncorp. I'll just add another 2. One is total loss, which is sort of nearly 50% of the motor loss claims, motor claims. And that's -- what we've seen there is we've seen not an increase in frequency and theft. -- but an increase in the average cost of test. So we're seeing more modern vehicles getting stolen. So that's been a bit of a trend. Victoria seems to have stabilized a bit, but still at a higher level. And then the other one is third-party claims, which were a reasonable component of claims as well. and we've seen elevation in third-party claims, particularly from credit hire, which I think others have called out as well.

Okay. And no comment on units in first 6 weeks?

Look, I think put the hierarchy of decision-making inside the organization, make that clear. I mean we will price to inflation. Our preferred target is to have unit land somewhere between 1.5% and 2.5%. So that we're tracking with market. In home, it's a little bit more nuanced because the home system rate is negative. So 0.4 in an absolute sense, doesn't sound spectacular, but relative to the system, it's good. And importantly, in our Home book, it's the distribution of units and customer growth relative to the risk characteristics.

And so our target for the portfolios will be to cover inflation and grow units in motor at 1.5% to 2.5%, thereabouts. But if we're above that or below that in any period of time, and we're covering inflation. Our primary objective is to cover inflation on a book that's got 26%, 27% market share. I think that's the right way and disciplined way to look at the portfolio.

All right. And then maybe just a question on the reinsurance. I mean just aside from obviously softer pricing, has the sort of experience that you've had in the first half of this year in any way changed your approach to when you come to buy your reinsurance cover? And is it really the case that aggregate covers are likely to be more available?

Well, I think they've edged closer to availability every year. And by definition, that's usually the case. We would like an aggregate cover in our arsenal. Since we divested the bank, obviously, that's amplified volatility across the group. And so an aggregate cover would be something that we would have always aspired to. 2 months ago when we went through the process of pricing it and seeing whether it was a commercially available product, sensible product in the market. We couldn't make it work.

our anticipation is that the continued softening of those markets and the profitability of the reinsurers across the broader catastrophe covers that we're offering, will put us proximate to that availability. Now we've got to go through that process. We firmly believe that as a primary insurer, we don't have the opportunity to pick and choose what markets we play in, in this country. And so we have a fantastic reinsurance panel with great partners, and we'd like to see some support to provide that volatility protection, which we think is the last part of our story.

Okay. Kieren Chidgey, UBS. I might just start on a similar area, the GWP growth on Slide 12 that you put up, you're flagging better growth in second half across each of the portfolios. But the commentary seems to suggest most of it's coming from price A couple of questions. Interested in if you can give us sort of, I guess, a feel for the types of level of pricing you're talking across each of those segments. And then secondly, sort of your view around the competitive backdrop in each of those and volume implications if you do have to push above market on price?

Yes. I mean it's fair to say we've emphasized price. And we've emphasized price, it's already been put into the book. Now some of that, obviously, CQP, their filings that have occurred, they're scheduled, they will come in. We know what pricing we put through New South Wales CTP. But ahead of price is inflation. And so when you think about price, think about us at that overarching level, looking to price to inflation.

Yes, I think if we go through a motor, we see a little bit more rate going through motor in the second half. As we said, we've already started to put that through in the back half of the first half. in home, maybe a little bit more rate, but homes pretty reasonable from a margin perspective at the moment. So a lot of the price is around margin remediation relative to where inflation is. So we think a little bit more in motor. CTP, as Steve said, it's pretty much already in. So we've got another $25-ish on New South Wales CTP this month. We've got another in or so in Queensland.

So we can see that price is already in situ. Workers' pricing in Western Australia and Tasmania needs to lift, probably towards the top end of the single diets. So you've got price going through those portfolios. Then as a set of elements like in Vero specialty lines, we expect to see continued growth there and continuing growth from the first half rollout and then there's some sort of like non-repeats, if you like. So in New Zealand, we expect the rate deterioration to start to bottom, but also the rate deterioration started in first half -- in second half '25.

And so the first half -- second half '25 as a base is already in that second half '26 growth number. We expect to see some rate growth in motor in New Zealand, particularly in the AA portfolio. So that will support that. And then in workers, I flagged that we had these prior year adjustments, that's burner adjustments on claims, wage adjustments. We haven't seen the same favorability this year that we saw last year.

Of course, the corollary on that is you're doing better on claims, so it sort of net P&L neutral, but it does come through the GWP line. We wouldn't expect that to occur in the second half as well. So that's the range -- there's a range of pricing in the 10 relative to margin remediation. There's some new business that's coming through and then there's some one-offs, if you like, baseline adjustments that aren't rearing.

And sort of specifically on commercial, I think it's sort of your Investor Day late last year, you continue to flag desire to grow market share to a natural level in that part of the business. I think the growth this period is suggesting that strategy is on hold in the current cycle. Can you just give us a refresh for how you're thinking about commercial over this calendar year?

Obviously, as Jeremy pointed out, there is some exposure to the commercial cycle, particularly at the top end, and we have to be conscious of that. Again, back to the overarching concept of discipline, we are going to maintain our discipline in those markets. We've got good margin sufficiency, particularly in property and profit. And our strategy there will be to be very cautious around growth, maintaining ourselves within that margin range. And as the cycle starts to change, be in a position to capitalize on that as others are potentially remediating portfolios that they've driven below the bottom end of their targets.

So if we can grow sensibly and conservatively, but with good margin sufficiency and the margins are in the top end of that range. then we feel we'll be extremely well placed when that cycle starts to change and others start to remediate to go harder. But now it's not the right time to do that in our view, particularly with the discipline that we need to display around the margin performance.

I'd also just add, Steve, that when you talk about commercial, it's a broad church. And certainly, the growth in top end commercial property and to some extent, Profin has been weak. But we've had very strong growth in fleet, which is a big part of our commercial business. We've had growth in other parts of commercial as well. We had a relatively weak growth number on packages in the first half. We need to get more right through that portfolio. It was the other 1 that she mentioned before, we need break-through packages.

And so I think the key point there is commercial is a broad church, and parts of it are doing well and sensible and good margin. makes sense for us to continue Vero Specialty Lines, et cetera. But it's the top end commercial property and propene where there's a bit more pressure.

Kieren, just to add to your first question. I mean, the other way of looking at home and motor, but particularly Motor is geographically because there's a lot going on geographically in insurance.

That's my next question. .

Right. Okay. I'll answer it. So obviously, there's a Queensland activity with RACQ and the work that's going on there. And again, home and made are a different portfolios for us in Queensland. We're more comfortable growing in motor, obviously, particularly in Southeast Queensland, and we'll be targeting some of that potential disruption that occurs as those portfolios RACQ and their acquirers start to merge.

New South Wales, it's been a softer spot for us historically. We feel significantly more comfortable with the performance of GIO now than we might have a couple of years ago. And AAMI is obviously very strong in that market. And we think there's a big opportunity in New South Wales for us now. And if you look at the market share leader in New South Wales, some of their performance might be an opportunity there, there is an opportunity there for us growing in New South Wales.

And then South Australia and Western Australia, where the unit volume count performance in both those markets is better than the average of the 2% that we talked about. And again, to varying degrees, there will be opportunities for us to capitalize on some of the dislocation in those markets. So if you look at it macro nationally opportunity, you look at it geographically opportunity. And then in New Zealand, with AI, we're getting 3% unit count growth there. Not all of it is attributed to the new policy administration system. But we have an embedded benefit that we believe in both -- at the written premium level, but particularly in volume through the implementation of that new portfolio.

Steve, just a quick follow-up, and then I'll hand over. But the Victoria Motor picture is kind of skipped over Victoria. How have you seen experience there?

Look, I just don't see the same material dislocation opportunity in Victoria, as I talked about in those other states. We are pricing to the higher inflation in Victoria, which is largely so much frequency, accident frequency or otherwise theft. But in the aggregate of the whole portfolio, Victoria would be a market where we'd be looking to grow with system in both home and motor, maybe a bit more in home than made it but grow at system but price to the inflationary environment. And there is a delta on theft to the rest of the country, both in terms of frequency, but particularly severity.

Steve, just to add in terms of that sort of geographic per se, but brand reach, 1 we don't talk about often sort of refers was Bingle. Bingle as growing 15% GWP on the same time last year, but half of that is rates units. That is an example for us of a brand that's got further reach and further stretch as we continue to roll that out.

Andrew Buncombe from Macquarie Securities. Just 2 from me, please. The first one is on the experience in the month of January and rolling forward the last couple of weeks as well. You've said in the slides that, that experience was in line with the allowance. This time around, you've put slightly more of a skew on the second half for the allowance. My question is, is the January experience in line with a straight line average or some sort of shape?

Very conservatively, I think you said in line with the allowance, I would call it within the allowance. So we might have been a little bit better than the allowance. What are we touching wood with sort of 18 days into February, and we had some weather in Queensland last weekend, which is very material and some weather ongoing in New Zealand, which will be a big reasonable event in the New Zealand, but not well within our means at the Alliance level. So I think it's there or thereabouts. So nothing happened in the first 6 weeks of this calendar year that sort of says that we're anything sort of a skew to the allowances we would track.

Yes, we said that the second half allowance is probably the best guide for the second half experience, which holds true. But the second half allowance theoretically, we should improve a little bit because of now the enlivenment of the drop-down covers in the second half. So there's probably a conservatism in that statement a little bit. And the January experience was actually slightly better than that outcome.

And then the other question from me was in relation to reserve releases. So 90 basis point impact from a release in the first half, correct me if I'm wrong, but my understanding is the full year guide is still 30 basis points. How should we be thinking about the second half? Should we expect a strengthening I think the expectation outlook is more around the underlying business performance. So we achieved, I think it was probably 40 basis points, 30, 40 basis points on CTP in the first half.

And so we continue to expect to deliver that for the full year. When it comes to the other portfolios, they're sort of plus margin, obviously, in the first half with some bigger plus minuses around them. I don't think we expect all of that to reverse necessarily in the second half, but really just calling out what we expect to see on the CDP because that's where we expect to get the reserve releases. The other portfolios we will see strengthening and releases, but we would expect those to net to a neutralish number.

Andrei?

Andrei Stadnik from Morgan Stanley. Can I ask around the OpEx ratio? So OpEx ratio fell nicely in this half. Do you think the OpEx ratio can continue to fall into FY '27. And can it continue to fall into FY '27 even if premium growth what is slow?

Yes. I think -- I mean, we have to have opportunity from our operational transformation agenda with the AI on. Obviously, a key determinant to the OpEx ratio is where premiums go but I mean we still see a reasonable premium outlook. So the chart I put up around that insurance pricing cycle. What we're saying is for that 90% of our portfolio, there's still a fair bit of premium growth to run through the portfolio. That obviously helps an expense ratio. So that's one part of the equation.

And the other one then is the absolute expense number. I think the key thing is for us is thinking about the mix of that expense, though. And so one of the things that we are fixated on is trying to keep that run the cost business as flat as possible. And it's not always possible to keep it absolutely flat, but as flat as possible. And then to reinvest back into the growth business expenditure. That's expenditure on things like the digital insurer policy admin platform modernization and operational transformation, and we see value in that. So to the extent we can do that and achieve our overall margin outcomes, then that's a good outcome.

And for my second question, can I -- just coming back to the catastrophe budget. Based on the internal modeling we received from the insurers your catastrophe to sufficient 7 out of 10 years. QB based on their modeling is out of 10 and IGs over 9 out of 10, right? So at the moment, as robust the bottom and block of Australian listed peers. How are you thinking about catastrophe budget increase in the next year? And if there is an aggregate reinsurance cover, would that help limit the increase?

Yes. Look, I think at some point, for Australian consumers, it becomes difficult to price, for example, 100% adequacy on the catastrophe losses because just doesn't make sense from a consumer perspective, and it doesn't make sense in terms of what insurance is for. Now we have -- and we have all extensively lifted over the last few years from what was a 50% type number. modeled. Actually, in practice, it was probably much less than 50%. So we've all lifted from there. I think there will undoubtedly be variations in modeling.

So our modeling won't be the same as other people's modeling. We all use different models. And so one thing to have to think about is what might be the variability in some of that modeling. I think we feel pretty comfortable with our natural hazard allowance where it is at the moment. But having said that, as we've always said, if there was opportunity to try and strengthen it a bit further or within the realms of delivering that margin outcome, then that could be a possibility for us. but we don't feel uncomfortable with the way it's set at the moment.

And yes, an aggregate cover. I don't think an aggregate cover would change the natural hazard allowance per se. It would sit on top of the natural has allows where we said that.

Okay. Barry Kong from Bank of America. Just a question on margin progression in the walk there. Correct me if I'm wrong, but last year, you said you were tracking above the top end of the 10% to 12% underlying ITR ratio. -- some of that which you'd reinvested into a higher hazard allowance? I'm just trying to understand the moving parts here. Have you reinvested some of the additional excess margin into growth?

Yes. If we go through the portfolios on the margin walk, we have seen a little bit of margin expansion in consumer, and that has predominantly come through home where we have -- that portfolio has been in remediation. It was below where the target range was. We're now actually up towards, if not above the top end of the range in home. And then in motor, we were above the top end of the range. We're now back towards the top end of the range in Motor.

And then in commercial, we are sort of around the -- around, if not a little bit above the range across the aggregate portfolio there. And obviously, in New Zealand, we're above the target range. And so when we think about are we reinvesting in growth, et cetera, what we're trying to do, as Steve said, is manage the business to that return to that margin and then make sure we're optimizing our growth relative to other brand assets, et cetera, relative to that margin outcome.

I mean we mentioned many times, I mean, you can take a complex business and simplify it quite materially through our targeted returns on incremental capital back to our book capital return back to an ITR for the group or the Suncorp business in its entirety and then back down into the portfolios. That's a target margin that we would aspire to. We cover the cost of inflation, and we'd like to get some level of market levels growth. in some portfolios, particularly made where we've got scale.

Home, the story is more about improving the quality of the home book and going and in aggregate, delivering at system growth. Commercial, we think there's an opportunity at the other end of the cycle to grow ahead of system and get back to that natural market share. And CTP, because we've got an overweight position in Queensland, we're prepared to see some share. So you can take a very complex business and reduce it down to something that's a little bit more simple in terms of how we sort of intellectually seek to run the business.

Okay. And just some capital questions. There was some drag in excess capital in the period from higher insurance liabilities, I'm presuming because of the cat claims. Will these get unwound as the claims get settled in the coming months?

Some of them do get -- I mean, theoretically, eventually, it gets unwound, but some of these events have a fair tail on them. So we would expect some of that to get on wound. I think the largest driver was that natural has an impact on claims. You also see some impact on things like mix. So New Zealand growth was lower than the rest of the group. And so the excess tech is higher in New Zealand relative to the group because it's relatively high profitability. So you get a mix impact from that. And then there's always a bit of seasonality in that capital movement in the first half as well. So those are a couple of other moves in there as well as the rebalancing of investments.

Great. And just last one on capital management. Given the strength of the capital position, can I ask why the buyback was paused so early into the end of last year? .

Yes. I mean it's less about the capital position per se, but more about the confluence of events that we were dealing with at that particular time. So we were right up against sort of getting towards the end of the half year period. So obviously, that Christmas period is a period where you probably don't do much trading anyway. So the timing sort of was reasonably proximate -- and I think just with the nature of the events unfolding through October and November, we thought it best to pause. But we'll restart as soon as possible after this result.

Richard Amland from CLSA. Just would like to ask a little bit about risks to your pricing aspirations. There were some political sensitivities last year around sort of prices. You guys are acknowledging the input cost discussion that you've had, trying to push ahead of CPI by a magnitude might be somewhat challenging. Can you just give a flavor of any regulatory or political engagement that you've had that gives you comfort that you're not going to get hard pushback from any unforeseen corners?

Yes. I think it's never good to deliver a profit outcome that's significantly down on the PCP and probably driving returns on capital at that actual level and an aggregate level below our targeted returns. But I think what we've done as an industry and particularly at Suncorp over many years, is educate policymakers and regulators that we have got a cyclical business. So when we do generate returns that are above our cost of capital, through benign weather or favorable investment markets that we need that to deal with events like we've seen in the last 6 months or so. guess there's an ongoing dialogue.

Affordability is a huge challenge for Australia more broadly and for New Zealand, but particularly Australia and the incoming of the new Minister for the Assistant Treasurer, Dr. Molino is very focused on that agenda, particularly for the sort of 2% of the population or 3 or 4 or whatever it is that they can't obtain affordable insurance.

And so as an industry, I think we're working constructively with the government constructively with Treasury about how we might find an industry-wide solution for that problem. But in the industry-wide solution, has to, by definition, be industry-wide. It can't be 1 or 2 players that solve this problem. And it also needs to come with support from the government in terms of resilience and mitigation.

So there's an ongoing dialogue. There's no answers to that just yet, but it is an active part of the minister's agenda and at the individual company level at the IC level, we're working constructively with the government around that. Beyond that, I think the factors that drive insurance inflation, and I've talked about to use CPI as a proxy, are reasonably well understood now, I think. But we are very conscious as a business that while we might talk about inflation I talk about pricing to inflation, there's a consumer with the cost of living challenge sitting off the back of that. And over time, with the things we're doing with AI and digital insurer. We need to get better at designing new policies, new premium, new product for that subset of consumers who are really challenged to continue with their insurance.

[ Brian ]?

A couple of questions, if I may. In your analyst pack, you talked about the reallocation of Strata premiums from home into commercial. Does that reflect the pressure on them from the commercial property cycle or you've got a sign of further strata growth insurance plans?

Michael, do you want to?

Thank you. It's a clear strategic move. So with VSL or our specialty lines, one of the products we do want to enter into is strata. And so we have a small Strata book in our personal lines business. It's about $120 million a year. Thought process is bring that across and then run that direct book right next to the intermediate book. and grow it as 1 from a pricing point of view, distribution, knowledge. It makes a lot of sense. So it's probably just the foundations of building out that state opportunity.

Great. Then in terms of your internal reinsurance, there was a big drop in the premiums you are booking in terms of internal reinsurance, presumably because of the fall in reinsurance costs. Should we expect further falls in that looking for like possibly a similar level in the second half and then if the reshape cycle continues to fall, maybe a further reduction next year?

The key driver was retention. So that's internal reinsurance between the Australian business and New Zealand. And the key driver was an increase in the retention in the New Zealand business. So the Australian business just provided less reinsurance to the Australian business. which was then funded through effectively through Tier 2 diversification. So that didn't have an impact on capital. So I think the level we're at now is probably a more appropriate level. That's the baseline. But yes, I mean as markets soften a bit, might move down a little bit, but the key one was just the retention levels.

Great. And then with the improvement in your underlying margins, principally the improvement due to claims costs, how much of that was due to reinsurance or alternatively, if you want to answer that, how much was due to the earn through of phase?

Yes, most of it would have been a chunk of would have been earned though rate. I think if you look at the accounts, you can probably see where reinsurance costs are year-on-year, and you can see a reasonable reduction in reinsurance rates. But we don't split it out between those 2 categories. But you can see reasonably chunky reduction in reinsurance year-on-year, particularly relative to some others. And you can see in the pack where our price positions are on AWP. So you'll probably step on the back of the envelope on it.

Yes. Okay. And finally, how much of the expected drop in the expense administration ratio is to roll off in bank transitional costs?

Nothing. So with the bank transitional costs, they're all provided for as part of the bank sale process, and they were baked within the profit that we recorded on the sale of the bank last year. So that's all the P&L of the insurance business immunized from that bank sale process. Okay. I think we've got a couple of calls on the phone.

[Operator Instructions] Your first phone question is from Julian Braganza with Goldman Sachs. .

Just a first question on underlying margin. Just to be super I think of the guidance where we now have expense ratio is up 50 basis points as those yields holding up better than expected into the second half compared to initial expectations. Typically what is offsetting the impact in the margin?

Well, I'll get Jeremy to go through it in more sophistication than this, but the answer is pretty much New Zealand is that the answer. So pretty much all New Zealand, Julian. Obviously, we've had a period of time where the underlying margin in New Zealand is significantly elevated above its usual guide rails. We expect that, that will come back within the guide rails maybe towards the top end of the guide rails through premium adjustments that have already been made and starting to -- it's a reverse of what we've talked about in Home and Motor to some extent.

There was a little bit related to the natural hazard allowance phasing. So we put lighted more the resilience that $100 million into the second half and the first half. So that's a little bit here. But the key one is that margin fall in New Zealand.

So to be clear, do you have the new in underlying margins coming back to 16% in the second half, just to be clear?

Well, we've never really explicitly called out what it is, but it's something ahead of 15%.

Got it. Just my second question, you mentioned growing in 1 property, an opportunity to grow other than to try to understand how you're thinking about that from the perspective of a drag on your GBP going forward? And also secondly, what does it mean for how company you're being what it here on pain and what is the strategy? And what makes you think you'll be successful in growth of the market.

Sorry, you might have to repeat, Julian. Which portfolio are you talking about?

So just in our home portfolio, as we mentioned and long property. There's an opportunity for growth. So not understand what gives you confidence that you'll be able to achieve that growth with it just in terms of product in and how competitive you gave versus peers? And will that lead to other with GWP going forward as well?

Low-risk portfolio in home Yes. Look, I think -- I mean the first point I'd make is that this doesn't happen overnight. And you can see, I think, from a period of time where we started to reset ourselves around the apportionment of growth between low, medium and high from 2021 to 2026. First half '26, it's about 4% in aggregate. So this doesn't happen immediately. The 3 -- the composition of it all and go to the margin drag story is the components of it are to better risk select, better focus on that low and medium natural hazard area, but most importantly, to price at the technical level, close to the technical level for high and extreme.

And so when we talk about that in its totality, yes, we're improving the quality of the book, but we're also focused on making sure that the cross subsidy that potentially set in those 3 categories historically as being unwound, and we're getting closer to an aggregate home portfolio level to pricing actual and technical at the same rate. And so that has an impact on the distribution of risk between the 3 areas, but also improves the margin.

And when we talk about remediation of the home book, remediation is probably not the right word, but you can see 2 things. One is we're now growing at system or ahead of system. We're growing in a better quality way with a focus on low and medium. But importantly, we've also got the margin back to the top end of the range or slightly above the top end of the range. And so that's the way we think about it.

Again, it's more about making sure that the cross subsidy that might have sat there previously is adjusted to reflect the fact that we need to price closer to technical because as you know, if we are providing any cross subsidy there of any significant magnitude than others in the market who don't focus on those higher end risk areas will target only the higher risk parts of the portfolio -- the lower risk parts of the portfolio.

Okay. Got it. Now that's clear. just the last question in terms of your AI [indiscernible]. You just comment on some of the risks you forebody the just pricing competition disruption to some of the news that we have had in that area. You've talked a lot about Yes, that's the and looking for your sort of the [indiscernible].

Yes. So I think if I heard correctly, it's AI and the risks of AI, particularly around various of the domains. Yes. Look, I think 1 of the key elements that everyone is looking at, at the moment is the risk profile of AI relative to where you sit in the adoption curve. Now you can quite easily sit sort of in the fast follower or follow a territory and sort of watch others make mistakes and potentially benefit from that. or you can be more at the leading end. So our risk settings are very much approximate to the position and the leading position that we seek to take in AI.

So we're very conscious of making sure that when we implement AI initiatives right across the value chain, but particularly in the customer area that we're focused on and making sure that we don't disrupt the customer experience you saw a bit of that when digital started to flow through insurance and particularly banking and other industries. Those that adopted it early, obviously, made some mistakes in the early adoption of it. We're going to adjust our risk settings to make sure we can reduce or have a risk appetite to reduce those errors, but also to make sure that we're not falling behind the market. So that's the sort of aggregate risk view.

Clearly, we also need to make sure that as we go through this evolution like all major corporate players that we're investing in our people to reskill and retrain them and set them up for that AI world. So yes, the risk profile. We're doing a lot of work on retrofire at the moment to make sure that when we implement the programs of work we do that we're not disrupting the customer experience, that we're continuing to deliver what customers expect us to deliver, but we can do it in a more efficient way.

And Steve, just to add that net-net, we see AI as an opportunity. I mean, yes, there a risk around it, but we see it as a net opportunity, an opportunity in terms of within the business and how we run the business, how we can run it more efficiently, more effectively, better client experiences, et cetera. Insurance is already made for that sort of opportunity.

And then from an outside-in perspective, there's been market chatter around how AI may impact on distribution. Again, we feel well positioned around that from a consumer perspective, from a commercial perspective, with our brand portfolio and our expertise in how we, over a long period of time have dealt with that distribution channel.

And I mean, obviously, there's distribution potential benefits for us if we're early adopters, and we focus on it. But at the end of the day, you have to manufacture a product and manufacturing a product in insurance is about pricing and risk selection, and it's about claims management. And that's where we see material benefits as a manufacturer of insurance products to make our products better, more personalized to make our claims processes better and to continue to improve the quality of our risk selection and underwriting.

You've got all of those things working, you're going to drive material benefits for customers and for shareholders. If you just sit there, I think it's a distribution opportunity and you don't focus on risk selection, pricing and claims management, then you're going to end up with a book that's skewed to areas that you might not want it to be skewed to.

The next question on the phone is from Siddharth Parameswaran with JPMorgan.

A few questions, if I can. Firstly, just Queensland City, please, Steve. It has been a drag on your margins. I think 6 months or 12 months ago, quite a sharp drag from where we were with commercial margins previously. With the price increases that you're pushing through, does that get CTP back to target and where are you at with your discussions with the regulators on change particularly in Queensland CTP?

Yes. Thanks, Sid. I think it's well known that sort of 12 to 18 months ago, we had a very challenging CTP portfolio, very much reflective of -- we believe it wasn't a sustainable scheme going into the future. You saw the exit of RACQ and bringing it back to 3 insurers with us holding around 60% market share. The discussions with the Queensland government and the regulator have been very constructive. We've had, I think, 4 consecutive premium increases in that portfolio of different magnitudes.

From the start of the journey, we would have said those 4 in the quantum that's included in them would probably be sufficient, but there has been some deterioration in the scheme. So we still believe there's more pricing that needs to go through the scheme, but it is on a trajectory to return to the target margin that we would have in the portfolio.

In terms of the broader scheme reform, there's a couple of components there. There's proposals around the premium equalization mechanism. We think that's are supported by the government, supported by the regulator, but now in a process of having it legislated and system changes and all those sort of things, that doesn't happen overnight, but we think that there's support for it. And the wheels of government are stepping in that direction. So we think that's occurring.

And there is new scheme -- a new scheme regulator, not yet appointed but the all scheme regulator has moved on, and there's a new scheme regulator coming in, and we think that, that's -- we're having some constructive discussions around that at the moment.

Thank you for that color. Just a second question, just on the -- some of the difference between underlying and reported margin, just a little check on 2 components. So the ongoing reserve release assumption of 0.3% of NEP that you expect. Is there any thought about changing that going forward? I know there was a favorable release this period, but you had previously indicated that, that might start to drift towards 0. So just on that -- just that question. And the second question was just around risk margin strain. I think there's a risk margin strain of $35 million in the half. And I think that should be an ongoing component of the difference between reported and underlying. I just want to confirm that, that would be a consistent difference between the 2 per half.

Yes. So the reserve releases what we've said with those is that we expect 30 basis points this year. And as I said before, that's around the CT portfolios. The others will move a little bit, but we sort of expect those to be net-net. What we've said is that that was 150 basis points a few years ago. It's now 30 basis points. I expect over time, it may come down to a lower number. But what we have committed to reasonably clearly and demonstrated delivery on, I think, is that -- to the extent that comes down, we will manage our underlying ITR still within the guidance ranges that we're giving.

So I think it's come down to a small number. It may come down to a smaller number. It's becoming less significant, and we will manage that within the within the underlying ITR. And then the risk margin question, the elevation in risk margin adjustment that we saw this half was really off the back of the natural hazards. And so to some extent, that's really part of that natural hazards adjustment because obviously, with the experience we got, we get the claims on it, we put more risk margin on. So I don't know that we would ordinarily expect a risk margin of that same quantum because it was connected to that event pattern we had in the first half.

But there should be something in there?

There will be something. There will always be something there, yes. .

Okay. Okay. Great. Okay. Just a final question for me just on the -- you do have some drop-down covers, you would have done some modeling on the expectation of reinsurance recoveries and maybe things which may help your allowance in the second half versus what you all up for. Just wondering if you could help us understand if you are expecting anything at all given the quantum of the claims that you had in the first half, what should we expect this possible set of recoveries in the second half?

Yes. So I mean, it is fair that on most of those drop-downs that the deductible ratable erosions have pretty much been taken care of in the first half. So they are now, as I said, in Livent, give or take a couple of million dollars. They're now pretty much in Livent. And as I referenced technically, we have done the model technically, when you model that through the allowance you get a slightly lower allowance in the second half than the budget, the original budget for the second half, but it's not material, but it is correct, it's a little bit lower than the budget allowance because there is expectation now of recovery against those programs.

There are no further questions on the phones at this time. I'll now hand the conference back over. .

Okay. Anything more in the room here in Sydney? Nothing more. One more question over here.

Just a quick question on their specialty line launches. How much of these new products compete with global Capital? And are the launches dependent on what happens with the cycle more broadly?

Michael?

I think there's 2 parts to answer that. So firstly, strategically, VSL is around getting product breadth. We're a big believer in specialization. And so when you do these smaller products, you do them very, very well. You get the right underwriters in there. You can make some really good margin to support your brokers and your clients. And they're also not by themselves. I think it just -- when you have the breadth, you can use the specialty products and the more general products together and in multiline opportunities.

So that's the reason why we do them. We look for premium pools where there is opportunity, where there is a size and where we can get the talent to do it. And the second part of that question is how we tactically actually funded. Look, we do use global reinsurers. We look at our own capital we look at overseas as well. And if we can find the capital that is cost effective to us and they want to back us, then we will use quota shares and the like. So that's quite fluid though. We don't have to. But quite frankly, if it makes sense economically to use that capital, we will. So that's sort of the thought process there.

And just to add, Michael, I think some of the specialization that sits in there, through the underwriting through the broker relationships through the industry relationships. Some of it helps immunize some of that global capital pressure.

Okay, nothing else in the room. If not, thank you, everyone, for coming down or being on the phones, and we'll look forward to catching up over the next couple of weeks.

Well, good afternoon, and welcome, everyone. Welcome to our Shelley Street office. And let me start with the usual housekeeping matters. Please, if you could put your phone on silent. And obviously, in the event of an emergency, follow the directions of the team. I'd also start by acknowledging the traditional owners of the lands upon which we meet and pay our respects to elders past and present. So we've got a very full agenda today. So why don't we get straight into it.

And I want to start where I always do with our purpose and which I always put up at the start of every presentation, the inverted triangle, and it explains how value is created at Suncorp. Our purpose, which is at the heart of everything we do and delivered through our people to support our customers and the community in that order, we feel will always lead to sustainable and a growing business for our shareholder. Now I feel personally, and I think the team feel very privileged to be working in insurance, where the connection to purpose is not something that we have to force down everyone's throat. It is something that is so obvious. And I've been managing -- not managing, but I've been sort of watching 2 claims that have evolved from the Cyclone Alfred event that occurred earlier in the year. And both the claims resulted in -- from massive trees that fell through the roofs of the houses and obviously, the resultant damage of water inside the home.

One of those claimants, an elderly lady doesn't speak English. The home was built hand-built by her now deceased husband. So you can imagine the connection to that home. And the other family a 4-year-old and a newborn who are currently displaced from their home, obviously, as they go through that repair. The trauma of that event, quite extreme and now living in a caravan alongside the home of their in-laws. So that's not a pleasant experience. I don't think at least they explain it that way.

Now among the many issues that I deal with in my job, and many of them are very much in the line of sight of the people in the room here, those 2 claims and others like them occupy a lot of my attention. I've been out to those properties 2 or 3 times personally to look at the repair work. And I know that our competency in managing those claims will result in both of those families potentially getting back in their homes by Christmas. And that means a lot for them. I know that. And it means a lot for us, too, to be able to help them get back in their home and hand those keys back, which I will do before Christmas, and I'm sure they'll be very happy with that.

That's what purpose is all about. It's real. It's real at Suncorp. And it's why I always put it the first item of business in any of our strategy presentations and any of our financial presentations. So to the next slide. And here, we've captured that simple picture of what's next. Now obviously, having completed the bank sale and the divestment process and simplified the business, the question on everyone's mind is what's next for Suncorp. Our financial year plan '26 to '28 and the strategy sitting behind it marks an important milestone. And it's the first plan that we've actually developed as a dedicated pure-play insurer. And people sort of ask me, what's it like not having a bank? You've got nothing left to do or got 30%, 40% of your time back. And that obviously can be filled up very quickly with insurance work, that's for sure.

This is the first plan we've delivered where we haven't had to compromise each of the businesses that we previously had. And obviously, in banking, when you've got scams and anti-money laundering and cyber and all those things that impact on banks, there are things that cannot be -- or can be not disinvested in. So this was the first plan that we pulled together as a dedicated pure-play insurer. It was really my first insight into just how simpler the group is relative to its previous incarnations. Now the strategy accelerates our focus on transforming how we work through leading technology, through better data, through the modern platforms that we're building and a culture that's centered on delivering simple, personalized customer experiences. And we refer to these as our strategic imperatives.

The 5 portfolios that we have, and we have done a lot of remediation in each of those 5 portfolios, whether it be lines of business within them or the quality of the underwriting sitting in them, but the 5 portfolios remain the same. And the core foundations remain strong and what the strategy is built on. We want to be a leading voice on advocacy, and we'll get Bridget to talk through some of that in a little while. We've got a strong balance sheet. We've got a fantastic reinsurance program, and it's designed to deliver stable returns. Our risk appetite has been reset to reflect our strategy as a pure-play insurer, and we've obviously got a commitment to best practice ESG standards. And finally, our people strategy is designed to equip the team with the skills needed to fully leverage the investments that we're making in technology and transformation to innovate, to allow them to innovate and to solve the complexity of problems that prevails within any insurance business.

So before I run through the agenda, I just want to quickly reprise a slide that many of you will have seen at the FY '25 results. and it captures the core settings that underpin the strategy as a leading Trans-Tasman general insurer. On the left-hand side of the slide, we restate the principles that underpin the business. We believe our superior underwriting skills supplemented by the use of market-leading technology and the skills and capability of our team underpin our claim to be a superior manufacturer of risk products and claims services. We believe we've got strong organic growth prospects. We don't believe we have to be scouring the world for inorganic opportunities. We've got a runway of organic growth that we can work on for at least the foreseeable future, the short to medium term. And our disciplined approach to capital and the balance sheet, the sufficiency that we've built into our capital reserves will protect us in the event of extreme shocks.

Now on the right-hand side of the slide are the differentiators. And they are what set us apart from many of our competitors, and that's what will give us over time the competitive advantage. And today, we'll spend a lot of time covering those differentiators in detail. Our multi-brand strategy, which we're very proud of, allows us to reach a broader customer base than any of our competitors. And that, combined with the investment that we're making in technology, the ongoing AI transformation means we can deliver leading customer experiences and competitive pricing, thereby driving growth.

When it comes to claims, best-in-class claims program, we will leverage the scale that we've got in our supply chain, provide seamless end-to-end customer claims processes and we'll deliver market-leading event response through the disaster management center that I know many of you will have seen. And again, there are underpinning asset that we have always is the capability, the skill and the quality of our people. So today's agenda, and we'll expand on the key components of that 12-point plan, and we'll highlight the core settings and the key differentiators. We'll start with Lisa providing an overview of the multi-brand strategy and importantly, how we're leveraging the brands to drive growth across the consumer business. She'll then introduce the Digital Insurer program of work that we talked a little bit about last year before handing to Adam to dive deeper into the broader platform modernization agenda and the operational transformation agenda with an obvious focus on the big differentiator for us, I think, which will be AI.

Michael will then take you through the Commercial growth opportunity, which we think is material. And after a short break, Bridget will discuss advocacy, and we'll follow up, as usual, with Jeremy providing an update on the financial settings of the business and obviously, capital management. Plenty of opportunity for Q&A. Then we'll farewell the guests that are online, on the webcast. And for those that are with us here in Shelley Street, we would ask you to rotate between 2 breakout sessions, and we're going to showcase a deeper dive into the Digital Insurer program of work to substantiate the benefits that we obviously see flowing through that, both in terms of financial benefits, but also product and other benefits that will flow from that and obviously, a deeper dive into the work that we've got, the use cases that we're deploying in Artificial Intelligence.

So before we move to Lisa, I'd just quietly remind you that this is an Investor Strategy Day. It's a once-a-year opportunity to dive deep into the strategy of the business. We don't ordinarily get the chance to do that at our half and full year results. So it's not a day for a detailed trading update other than the ASX that we've had to release this morning, and we can obviously talk a little bit about that if you choose off the back of the weekend events in Southeast Queensland and Victoria. So with that brief intro, let me hand over to Lisa. And while Lisa is coming to the stage, we'll play a short video.

[Presentation]

Just do it. I'm loving it. The spirit of Australia. I imagine you all just thought of 3 brands. Maybe even saw some logos in your mind. And that's the power of brands, and we've got them in spades. And why do brands matter? Because brands with strong equity deliver superior returns and are more resilient in times of crisis. And for many of our customers, they deal with us when they are in crisis, and they need a brand and a name that they can trust.

Good afternoon. It's great to see you all. My name is Lisa Harrison, and I look after the consumer insurance business, including brand and marketing for the group. Today, as Steve touched on, I'll provide an update on our brands and demonstrate how the multi-brand portfolio is a unique competitive advantage for us at Suncorp. Given limited time today, I will talk to the consumer brands, and we can address questions about the New Zealand and commercial brands in the Q&A.

Many of you will remember that 5 years ago, we made deliberate decisions to reinvigorate the brands to better meet customer needs and drive growth. A first step was to update our segmentation and ensure each brand is well positioned around distinct customer segments. Let me make this clear. More brands strategically placed equals more customers. Each brand has a clear role, enabling us to reach a higher share of Australians. AAMI is our national champion. It has the highest reach across the country and attracts a broad age demographic. Given its track record of making insurance easy, it doesn't suffer from an age skew that many large brands can encounter.

GIO and Suncorp are state-based champions that have both heritage and trust in 2 of the largest insurance markets in the country. And Bingle serves the needs of customers who are price conscious and competes directly with the challenger brands. At Suncorp, our niche brands make us distinctive. Terri Scheer and Shannon's are the standouts, having both #1 market share in their niches of landlord and motoring enthusiasts. And we round out the portfolio with APIA for retirees and CIL, the leading caravan insurer.

As you can see, we really have the market covered. And whilst others have sought multi-brand strategies through either corporate partner models or acquisitions, our portfolio is unique and advantageous. And let me highlight to you why. We have the highest levels of consideration across the country with AAMI having a clear 9 percentage point lead. And brands take time to build, and our brand portfolio has a strong history in their target markets with our oldest brand, GIO, turning 100 in 2027. That will be a good party. The portfolio is underpinned by customer segmentation, allowing us to maintain brand relevance with segment-led innovations and propositions, especially with the niche brands.

We control and own our own brands and are almost exclusively direct to customer. This means we have end-to-end control of the brand experience and speed and autonomy of decision-making. And we can also operate the portfolio brand model efficiency efficiently with an industry-leading expense ratio of 14.5% Importantly, the portfolio has helped us to achieve growth, having delivered 3% growth in policies over the past 3 years and maintaining #1 market share in motor and #2 in home. Three areas I would call out that have helped us build on our brand strength, marketing, digitization and customer relationships. We continue to invest in our team, partnering with top-tier agencies and leveraging an award-winning marketing team.

Using AI-driven marketing mix modeling, we are able to optimize campaigns and channels to deliver superior results. And operational efficiencies have enabled us to increase our marketing spend by an average of 5% year-on-year, ensuring our brands remain highly competitive. Nearly 70% of Australians know our brands and 60% consider them when buying insurance with AAMI ranked #1 for both awareness and consideration. We've also made it easier for customers to manage their insurance with us by investing in digital leadership, streamlining processes, expanding AI and innovations like automated crash detection for AAMI. We deliver fast, convenient service at a lower cost, and this matters for our customers.

And finally, we continue to focus on deepening our relationships with customers to ensure we remain their #1 choice. I wanted to take a moment to touch on attractive growth opportunities we see in WA and South Australia and via our Bingle brand. First, in WA and SA, we know there is a change of ownership with the motor and clubs, and this presents an opportunity for us as peers focus on integration. Across our overall brand portfolio, we have strong existing growth momentum in these markets for both Motor and Home with growth rates outpacing other states already. AAMI is an existing brand in these states best positioned to capture the further upside. And in the key measure of awareness, AAMI is already ranked #1 in South Australia and #2 in WA.

Equally, the Bingle brand, which focuses on the price-conscious segment, is a really important brand in the portfolio. It's been built to be low cost by design, simpler features, motor and digital only. And it's been successful with 9% unit growth in FY '25. To achieve this, we updated our marketing, and I'm sure many of you would have seen the No Fluffy Bits campaign, which has been a huge hit with over 20% GWP growth since its launch. We've taken the brand nationally, and we've invested in our pricing and risk selection strategy. Much of Bingle's success has been driven by the Eastern states. And with the national focus, we see even more potential for future growth.

Segment-specific innovation is a hallmark of the Suncorp brand portfolio. No other insurer is able to engage with different segments with compelling propositions like us. Our brands, they're proactive, they're reducing risks and engaging with customers to deepen the relationship. Through the AAMI app, drivers are given scores and tips every single day, and our good drivers receive cash rewards to recognize and incentivize their safe driving. As you can imagine, our customers love it, and it's been a great way for us to proactively engage outside the renewal process. Suncorp continues to lead on home resilience, further cementing our position with the launch of Suncorp Haven and investments in disaster management.

By collaborating with top-tier data and expert sources, we empower our customers to understand their weather risks and strengthen their homes. The platform has attracted over 150,000 visits to date. From a claims perspective, we've invested in the state-of-the-art disaster management center and mobile response hubs to support customers in weather-impacted communities. And in fact, we have the hubs in operation this week supporting those impacted by the past weekend sale. Shannon's customers love their cars and Shannon's has a deep relationship with them. What does it look like? It's over 20,000 enthusiasts each year coming to our Shannon showrooms to engage with unique cars in the brand and attending over 1,200 motoring events nationwide. This is unmatched customer engagement. And as digital insurer comes online, we'll unlock new opportunities to launch propositions and accelerate growth.

Our strategy has delivered strong results. The consumer business is growing, is profitable, has digital leadership and delivers better customer outcomes as evidenced by improving NPS scores versus peers. We've continued to invest and future-proof the business by driving digital leadership in AI. As a result of this focus, digital transactions are growing, and we are well positioned to compete in the future. I'm sure many of you are wondering what a future with AI will look like in the context of brands.

So looking into the new world of AI and AI models, we've taken action already. We're leveraging AI buying techniques in search engine marketing to enhance search volumes. To enhance better discovery with large language models, we've refreshed our content strategy. We've started to experiment and have diversified our marketing channels with emerging platforms. And we truly believe our multi-brand portfolio sets us up for the future. At its core, our portfolio delivers personalized propositions through the brand, and we are able to maximize our portfolio visibility against very prompts, intents and price points.

So in closing, let me recap 4 key points. Our brand portfolio is a strong competitive advantage. We've continued to strengthen the brand portfolio through digitization, investments in marketing and propositions that resonate with target segments. Segment-led innovation and personalization will continue to deepen relationships, and this will be an increasingly important way to compete, and we are well placed. And we have and continue to deliver strong results. So I'll now shift gears with the Motor [ and Home ], but shift gears importantly to the Digital Insurer program. And so for those that joined us at our last Investor Day in November, you'll recall that Adam provided an overview of our technology modernization and simplification journey and the role of Digital Insurer.

Pleasingly, over the past year, Digital Insurer has made considerable progress, and I'm really excited that the program is now in full delivery swing for AAMI. So today, I'll provide a brief recap of the strategic context and the benefits, and I'll be then joined by Adam, who will cover the technology considerations and delivery status. So the context for the program is both clear and compelling. Today, our lines of business have significant scale. We support millions of Australians and New Zealanders, but we run a stable yet 40-year-old policy system built long before mobile phones and well before a hyper-personalized world. So the opportunity in front of us is to combine both scale and modern technology and realize all the benefits it brings. And there are 3 areas that will drive benefits, business agility.

Specifically, our speed to market with new products and propositions will increase. We will also benefit from rapid core system updates as we are leveraging our cloud-based solution. Pleasingly, the system will help us support more propositions to support risk reduction and improve loss ratios. For our people, it will radically reduce complexity. It will cut training times and help reduce risk through a simpler, systemized control environment. And DI will deliver better engagement for our customers. We'll see this immediately through empowering our people to have better conversations with fewer systems to navigate and more intuitive tools. And we'll extend our leading digital channel offerings across all the brands, enabling customers to self-service transactions that have been previously restricted to contact centers. Importantly, DI has strong financial benefits, unlocking growth, improving loss ratios and reducing costs.

So I'm now delighted to hand you over to Adam to share more.

Thanks so much, Lisa, and good afternoon, everyone. Delighted to provide updates today on 2 topics: Digital Insurer and AI transformation which are 2 areas of our strategy that I'm equally and extremely passionate about. So I'll pick up where Lisa left off on Digital Insurer and start with the technology approach that we're taking. And as Lisa referenced, after careful review over an extended period of time, we concluded that our legacy policy administration system was no longer fit for purpose. As Lisa said, it served us extremely well over many years, but we were facing into its limitations. Particularly its inability to enable rapid product innovation, more personalized propositions and support emerging distribution models.

At the core of the target state technology solution that we're delivering through the program is the Duck Creek OnDemand policy, billing and insights platform from Duck Creek Technologies, and as Lisa referenced, importantly, we're implementing the latest Software-as-a-Service version of this platform, which is known as Active Delivery.

And this means that we have an evergreen software platform and are receiving updates literally on a fortnightly basis. It also provides a modular and highly configurable platform that means that as we're rolling it out across the various brands and portfolios, we get significant reuse. But it's worth recognizing that DI or the Digital Insurer program is delivering much more than just a new policy admin system or modern tech. It's touching literally every aspect of our end-to-end operations from digital sales and service to customer management, pricing and underwriting, billing and payments, customer correspondence and integration into finance, claims and our downstream data reporting and analytics ecosystem. With another benefit of the globally leading cloud platforms we're deploying, is taking advantage of the embedded AI capabilities that will fundamentally transform how we build and deliver products to our customers over time, which I'll come back to in the AI discussion.

So moving to where are we on the delivery. And FY '25 was a pivotal year for the program as we foreshadowed in the update last year. And we were successful with the launch in April of our first release which focused on our AA insurance joint venture in New Zealand with the New Zealand Automobile Association. And we felt AAI New Zealand was the ideal candidate to take the lead on new -- moving to this new platform and set of technology assets before we then deployed it across our other portfolios and brands.

So as I said, April, we went live for new business across Motor and Home in both the digital and the assisted channels, and then earlier last month, we commenced the migration of AAI's existing circa 1.1 million customer policies onto the new policy platform at renewal. And for anyone who's been involved in these large complex core platform replacement programs over time. This was a really massive milestone for the program and certainly pivotal to realizing the benefits that Lisa described.

And while it's, of course, early days, we are confident that the benefits that we envisaged in the business case will be realized over time. And just to give you a sense of a few of the very early indicators in the AAI New Zealand experience. We've simplified underwriting with a 97% reduction in referrals to manual underwriting. Which has streamlined our decision-making and materially reduce the cost to serve. There's greater automation. For example, with an average 120,000 premium payment transactions, auto receipted every month, we've materially reduced manual effort, lowered error rates and improved our compliance. And we've significantly improved the employee experience, demonstrated by a 50% reduction in the time required to train new frontline staff and which clearly reflects the highly intuitive modern systems that we've deployed. And these early wins are further supported by the strong anecdotal feedback from our frontline teams on the ground who are fully embracing the new systems and the simplified processes.

So looking ahead, release one laid the core technology foundations, which will be leveraged and extended initially to our consumer brands in Australia. The high quality of the delivery to date and the capability of the integrated team creates the confidence that we can extrapolate those benefits more broadly. We're now well into the delivery of our second release which focuses on AAMI, our flagship national consumer brand. And we're targeting this release for AAMI Home and Motor, new business around the middle of next year and then migration of existing policies in the same pattern that we've approached AAI New Zealand to follow then after. And while release two, certainly brings with it increased customer scale, there's circa 2.7 million policies and new scope and integration requirements. We are leveraging the core foundations and all of the valuable insights that we've received from the first release for AAI New Zealand. And pleasingly, more than 95% of the core Home and Motor product build is reusable from the first release. And then we've started planning for the deployment to our other consumer brands in Australia, including compulsory third party. And additionally, we've started the early work on how and when we can extend these foundation to our commercial portfolios. And we've got an initial technical pilot underway that's proving out the more unique requirements of our intermediated businesses, which will become a key focus for the program in FY '27 and beyond.

And as Steve said, in the showcase for those here in the room, we'll give you a live demonstration of the old and the new system, and you can see firsthand the benefits that are being derived. So that's not all we have on our platform modernization agenda. So if you zoom out, Digital Insurer is clearly the marquee investment, but we have several complementary initiatives. Over the past year, we've achieved the milestone of 93% of our technology workloads now being hosted in public cloud environments. This has enabled us to exit completely 3 legacy data centers delivering cost efficiencies, strengthening our technology resilience while improving business agility. And with this milestone achieved, alongside the successful separation of Suncorp Bank systems and data through the sale of the bank to ANZ. We've been moving at pace to simplify and modernize our end-to-end technology estate.

I'll give you a few examples up there on the chart. We've introduced a new cloud-based contact center platform for over 7,500 team members that we delivered in less than 12 months. We started with voice and then over time, we'll integrate chat, e-mail, social media channels and add AI-enabled capabilities like guided prompts and real-time recommendations to our frontline employees to assist them in their customer interactions.

In Jimmy's business in New Zealand, we're enhancing our pricing and underwriting capabilities by implementing a new pricing platform from Earnix and many of you will recall that we've adopted Earnix in our Australian consumer portfolios through our previous investment in what we call CaPE, customer and pricing ecosystem. The first of Vero New Zealand's portfolios went live on earnings in August of this year, and we are already seeing the benefits and well progressed on extending across other portfolios. And in parallel, the New Zealand team are investing in digitization and automation, enabling their staff to manage the full policy life cycle on Salesforce CRM, which delivers seamless digital connectivity and is materially improving the service to brokers, corporate partners and customers.

We're also making strong progress on modernizing our enterprise platforms. We're shifting our people and finance processes to a common platform called Oracle Fusion, which is driving a range of business benefits. Over this past financial year, we upgraded the foundational platform for finance, and we're now building on that to streamline our various finance business processes and improve our reporting and analysis. And additionally, we'll implement a new reinsurance management platform in the second half of this year also from Duck Creek Technologies. And on the people front, we are on track to go live in the second half of this financial year with a new integrated human capital management platform and managed service payroll solution, which will both significantly simplify the technology landscape while also transforming the end-to-end employee experience. And as we touched on last year, we're already looking to the next horizon and firming up our plans to modernize our claims platform to the next-generation cloud version.

So a lot happening. And if that wasn't enough, move now to the second strategic imperative that Steve touched on upfront, which is operational transformation. This is about becoming a seamless digital first insurer, enabling us to reduce our cost to serve and provide our customers with superior sales, service and claims experiences. We've a proven track record of operational transformation through the work we've done in our sustained focus over many years on digitization, automation, partnering and artificial intelligence. And you can see on the slide just a selection of the proof points, which have all contributed to the industry-leading expense ratio that Lisa referenced. And whilst we expect all of those levers to continue to be relevant, AI is where we see the greatest transformational opportunity over the next horizon. We continue to believe, which has been further validated by a range of external data points, including recent reports from analysts that are participating in the call today. That insurance is one of if not the industry most right for AI-enabled transformation. And why? Well, this reflects the highly data-intensive nature of insurance products and operations but also how that extends into our supply chains and broader repair networks.

It is important to emphasize that AI is not only about driving productivity and efficiency gains, which, of course, is a big part of the story. But we see AI as a fundamental lever to enhance the customer and employee experience and ensure the sustainability of our industry. For example, helping us to address industry challenges such as insurance affordability and accessibility. We talked last year about the strong foundational capabilities that we've established that pave the way now for our accelerated adoption across the organization. And we continue to take a holistic enterprise-wide approach to AI and continue to make progress against 4 complementary pillars: strategy and governance, risk management, people capability uplift and, of course, our technology foundations.

So I'll just share a couple of quick examples against each of those pillars, starting with strategy. We've established an enterprise-wide governance model to monitor our AI settings and policies and a structured prioritization framework to drive alignment and ensure that we're accelerating the highest-impact AI initiatives. Moving to risk management, where we further strengthened our AI risk and control framework, including importantly, AI safety. And while we don't take anything for granted, we were very pleased to receive the accolade of the Australian Financial Review AI award for ethics and responsibility earlier this year. On to the all-important people pillar. We continue to empower our people to play an active role in how we both create and adopt AI solutions. Over 1,200 people participated in our recently launched AI Academy and more than 2,000 participated in our annual AI new program of learning helping our people to better understand the potential of AI, but more importantly, actually test and learn and experiment with it for themselves.

We're also investing heavily in the up-skilling and reskilling of our workforce to adapt to the uncertain but the clear future era of AI. And then finally, to technology, where we continue to deploy AI through 3 complementary modes. Firstly, enterprise AI utilities think of things like Microsoft CoPilot, AI, which is embedded in our modern core platforms that I outlined earlier. And then thirdly, what we call intelligent process automation. Which is where we see the greatest opportunities to create competitive advantage. Here, we're leveraging our internally managed data science and AI platform that we call SunGPT to deploy more proprietary use cases, which are powered by leading foundation models from providers like OpenAI and Anthropic. So this holistic approach is already driving demonstrable value. With more than 20 specific use cases delivered over the past financial year across every part of the value chain you can see on the chart, with scale adoption and daily use by many thousands of our people, each individual use case is tracked for tangible benefits, whether that's enhancing the customer experience, enabling our frontline teams of course, improving operational efficiency and productivity or building strategic capability that can be leveraged across the enterprise.

So I won't go through all of the examples on that slide. You'll see a few in the breakout. But just a couple of examples. So in our commercial business, our motor fleet "slip" has halved the turnaround times from 4 to 2 days. This increased capacity has meant that Michael's commercial business can manage an increase in motor fleet "volumes", which are up over 50% in the past 12 months without the need to add more frontline staff. In our broader frontline teams, our smart PDS utility, which is enabling our home claims teams to answer complex product disclosure statement questions faster and with improved consistency and accuracy. While we've only just gone live, we're anticipating a 50% reduction in referrals to the support teams for these type of coverage and PDS inquiries. And we would then expect a 25% reduction in the average handle time for these types of calls. And those benefits are predicated on what we've seen in some of the other use cases that are now already at scale.

And then finally, in our technology teams, the rollout of GitHub copilot for software development has enhanced developer capacity and is achieving much faster code delivery and a stronger security posture, for our over 500 software engineers. And while we're pleased with the tangible benefits that we're already seeing, we equally acknowledge that this is still scratching the surface of the full potential opportunity of AI. And perhaps the most material development since the update that I provided last year has been the acceleration of our ambition and the adoption of what you hear describe broadly as Agentic AI capabilities. What does that mean? Simply that's where AI can plan, apply judgment and most importantly, act autonomously because it's been given agency. And this means that we can completely reimagine our customer experiences and end-to-end processes in every part of the organization. Our initial focus for deployment of Agentic AI is in claims and customer service which is, of course, where we see the largest value pools.

However, this by no means limits its broader potential. We've just completed an in-depth ideation phase, and we're now in full scale delivery. Having developed a clear execution road map with cross-functional representation from every part of the organization as well as further investing and uplifting our core technology capabilities, which we'll showcase in the breakout. Our initial efforts will target things like simple customer service interactions through voice and chat as well as automated claims lodgement and assessment across consumer, commercial and personal injury. And we'll share more details on that program of work as we progress through delivery.

So in closing, we believe that moving at pace on AI-enabled transformation will create first-mover advantage and competitive differentiation. We're building on strong foundations that we're developing over many years with early benefits informing our approach to broader adoption and scale out. We are confident in our trajectory, but we're equally not in any way complacent given the pace and the scale that the market and technology capabilities are evolving.

And so with that, I'll now hand to Michael to share a view of how we're achieving our growth aspiration in commercial. Thank you.

Thanks, Adam. There is a lot going on in the technology space. It's always good to hear it, and good afternoon, everyone. It's always a pleasure to be here talking about Commercial Insurance at the Suncorp Investor Briefing. So last year, I spoke to you for the first time as Chief Executive of Suncorp's Commercial and Personal Energy business. I outlined that Commercial is benefiting from the improved focus of a pure-play general insurer and the ability to make disciplined targeted investments.

Commercial, in particular, is emerging as a key growth engine for Suncorp. At that time, we have been operating under the current structure for 12 months, a change that elevated the Commercial business to the ELT level and allowed us to organize around customer value chains to drive greater customer centricity across the group. We also established a platform business to reflect the growing role of broker platforms and the distinct capabilities required versus our tailored line business. Our strategy remains consistent with the last year.

Now the growth engine for Suncorp. We often get asked why we can grow Commercial. And this slide sets out the clear reasons why we can grow the Commercial business, importantly, as part of the Suncorp Group, and they are, room to grow. In terms of market share, our commercial business is ranked #4 at around 9% in market share, meaning there's plenty of room to grow into a natural share, both on new products and also in existing products. There is good broker support for an Australian-based commercial insurer, with clear focus on the Australian market. We hear this loud and clear from our broking partners, which is very pleasing to see.

Our best-in-class claims, which is evidenced by numerous awards, for brokers who use our claims capabilities consistently time and time again, there is a key differentiator for us from other insurers. The scale of the group. Our ability to leverage the scale of the Suncorp group across pricing, claims and customer service. We could not invest in these capabilities to the same extent as a stand-alone Commercial insurer, a team with deep specialized capability in Commercial Insurance. Vero, our branding in the Commercial Insurance side has always prided itself as an underwriting shop and the expertise is very priced.

We continue to have risk engineering teams assessing the risk management of a large risks. This is a core capability. We're also benefiting from increased tech investment, as you saw from Adam there, Commercial features very prominently across the group, and we're seeing that both in Commercial Insurance and personal injury. Commercial also provides an important diversification benefit for the group. In terms of non-correlated risks and Commercial itself is also diversified and operates in all market segments, but is strongest in mid-market and also in SME.

And finally, a collaborative business model across home, motor, Commercial and also personal injury and also New Zealand, bringing scale and expertise, which brings competitive advantage to Commercial and also the group more broadly. Our ambition for the Commercial business remains to grow to #2 in market share, but of course, within target margins. And I will reiterate that target margins are paramount, and we focus on those very, very clearly. Now last year, I also shared with you our approach to commercial and how we have structured with 2 distinct businesses being the platform business and also tailored lines. I thought it was worth touching again on these briefly as it shapes the way we think about our strategy and the different needs of customers and brokers across different segments of the market.

We continue to see demand from brokers for more digitized straight-through processing, particularly for simpler business in the SME space. At the same time, there's an ongoing requirement for the trusted and tailored propositions we provide for larger clients to meet their more complex needs. They are quite distinct capabilities. And why this is important is that it recognizes there are different skill sets required in both of these areas. Our platform business is technology-driven, data analytics, they all play a key role, whereas tailored lines requires deep commercial insurance experience in underwriting and also distribution. Also important is that both segments require a focus on portfolio performance through pricing and risk appetite, which our portfolio teams support both those parts of the business. And of course, all of this is supported by our award-winning claims business.

And so what have we done over the last year since I last spoke to you? Well, we've delivered materially on our strategy. What have we done? We've expanded broker connectivity through our modern VeroEdge platform, enabling instant underwriting decisions and driving growth in SME and also non-fleet motor. We've established Vero Specialty Lines, VSL for short, a vehicle for launching new products in response to feedback from brokers that the clients were after more specialized product solutions. Through this business, we launched 3 new products in FY '25 being equipment breakdown, higher hazard property and higher hazard liability. Now these are higher hazard occupations and not geography, and that's important. Higher hazard business that's well managed, has good risk management processes and can be underwritten, represent good risks, and we actually price these and trying to find them.

And we have received great feedback on the more specialized proposition. Now we've expanded this further in 2025. We've launched a fourth product called combustible paneling, and that is going well already. To derisk this expansion, we've utilized bespoke reinsurance structures to balance risk and return as we build out this business. And that's an important factor to make sure we manage that volatility. We've also continued to drive efficiency and better customer outcomes by increasing digital claims lodgment and also delivering claims excellence. So that's quite a lot in a year. We are well diversified, which is an important point. And this slide illustrates that. You can see we have a diversified product set across our portfolio in terms of products and also geography. In addition, we operate across all market segments, but in particular, that mid-market and the SME are our focus. There remains a number of product categories that we do not operate in, as you can see, and that provides growth prospects for new products.

Now we are well positioned for growth, and this slide sets that out. Our fundamentals are well set. Our margin overall is at the top of our target range, and we have grown above market, indicating that we have a healthy, resilient portfolio and our proposition is resonating with brokers. In terms of the business split between platform and tailored lines, I note we still have some work to do on our platform business to get margins to a target level. We've seen improvement over the last 12 months as we hone our data analytics and our people and understand the strengths of our new system.

And the middle slide there, which is my most favorite chart is broker NPS. You can see we've gone from strength to strength as the culture orientates towards customer and broker centricity. This is a key focus for myself and also the leadership team and is paying dividends across many aspects of the business, such as growth, margins and also an engaged workforce. And that consistent service delivery model and evolving culture of customer and broker centricity is also being recognized by the market. And you can see there, we won a number of awards year in and year out. You can see from the chart that we've been named NIBA Insurer of the Year for the third consecutive year and have won the Gold Mansfield award for 6 years in a row. And for those who don't know, The Mansfield are voted for by brokers, recognizing the best commercial claims performance in the market. And likewise, the NIBA awards are voted for by brokers with NIBA being the National Insurance Broker Association.

So opportunity and outlook, and this is my final slide. It's worth noting that the external environment has become more challenging. Some segments, most notably top-end property and some financial lines are softening as more offshore capital has flowed into these markets. Despite this, we believe we are well positioned to continue to deliver sustainable above-market growth while maintaining profitability and creating long-term value for shareholders. The market structure and our position in it are favorable. Despite outgrowing our peers for the last few years, our market share remains less than 10%, leaving significant room to grow. With increased focus and investment in our commercial insurance business, there is significant upside. There are also segments of the market we don't participate in yet, meaning there's plenty of room for us to grow an untapped opportunity, if you like, in that product breadth.

Suncorp's structure as a more integrated domestic pure-play insurer is also a competitive advantage. We are benefiting from the scale of our consumer business as the organization is closely connected and values collaboration, enjoying benefits through scale efficiency in areas like motor, claims, pricing and call centers. And we're further increasing investments in AI and accelerating the digital replatforming of the business to improve underwriting quality, product agility and efficiency. And I think you saw that quite clearly from Adam and Lisa's presentation.

Our broker experience and claims excellence remains key differentiators. We can turn this into growth. And we also now have an underlying infrastructure to enable broker platform connectivity, and we have developed the reputation in the market being the best insurer to connect with. And Vero Specialty Lines is now established as a platform for us to launch more products, and we plan to launch up to 3 new products each year to continue to use more of our risk appetite. And finally, as a mid-market insurer with a diversified portfolio, we're less exposed to market cycles than some peers. Our financial health positions us well to navigate market cycles, whatever they may be.

Thank you very much. I think we're having a break now for 10-odd minutes.

No, we'll back here 02:05 everybody. So just a short break, given that we started late. Thanks.

[Break]

Welcome back, everybody. Welcome back, and good afternoon. I'm Bridget Messer, Suncorp's Chief Risk Officer. I also have the privilege of leading our advocacy teams, and you get a really unique vantage point when you sit at the intersection of risk and advocacy, not just on what can go wrong, but on how to make things go right. And our advocacy agenda is all about making things better. Think about it like shock absorbers on a car, not always visible, but essential for smoothing out bumps and designed to reduce and respond to impact.

So I want to start today with the obvious question, why advocacy? As Steve showed at the start, advocacy is a strategic lever in our 12-point plan, and our ambition is to be a leading industry voice on advocacy. So why? Well, we are, as you well know, and as you've heard today, a purpose-led business, we recognize the critical role that insurance plays in the prosperity of our communities and the role that we play as a leading Trans-Tasman insurer in making sure that insurance remains affordable and accessible. Many problems in our built environment, paired with climate change are creating real challenges for our communities, and it's important that we take a leadership position on these challenges.

In doing so, we really engage our people. We drive better insurance affordability for our customers, and we enhance the relevance and the trust of our brands. For our shareholders, better insurance affordability increases insurance participation, which drives growth. It also helps to take risk out of the system, and it ensures that we're at the table during important public policy debates. Advocacy is not new for Suncorp. In 2020, we launched our 4-point plan for more resilient Australia, where we advocated for reformed planning laws for more resilient infrastructure, for government subsidies for household mitigation and also for removal of regressive taxes that disproportionately hit those who can least afford it. And our advocacy is starting to deliver tangible results.

For example, we've seen the New South Wales government. It's committed to removing the Emergency Services Levy, which will reduce the tax our New South Wales customers pay from $0.36 in every dollar of premium to $0.20. We've also seen $2.66 billion committed to resilience initiatives over the next 5 years from the federal, Queensland and New South Wales governments. And we've seen joint commitment from the federal and Queensland government to build a $175 million levy in Bundaberg, which was directly supported by Suncorp.

So what next for our home agenda? Well, 5 years ago, we were one of the few voices raising concerns about emerging risks, risks that were evident in our own claims data, but not yet widely recognized across industry or by policymakers. And today, I'm pleased to say there's broad awareness that action is needed to preserve the safety and prosperity of our communities. This shift is a testament to the impact of sustained advocacy, not just by Suncorp, of course, but by the industry as a whole. And so we have our updated resiliency blueprint, which builds on our existing 4-point plan by adding in 3 things. The first is the need to create a globally recognized disaster response capability for our nation through better sharing of technology amongst industry, government and emergency services.

The second is the need to create an industry government partnership to address insurance access for the highest risk locations across Australia. And the third is the need to tackle new risks inside the home like flexi pipes and lithium batteries. On this last one, we recently launched a 6-month pilot to identify at-risk flexi hoses. The trial by our home repair company saw us inspect 1,800 flexi pipes and perform water pressure tests in 650 homes. From the inspections, 30% of flexi pipes were replaced and water pressure devices were installed in 60% of child homes.

We see similar risks associated with lithium-ion batteries with the average Australian home set to house 33 lithium-ion batteries by 2026. Now we are confident we're pricing accurately for these new risks, but we firmly believe that action is needed across the system to reduce these risks going forward to ensure that insurance remains affordable and accessible. The progress we've made since 2020 has galvanized our belief in the value of advocacy. We've seen firsthand how working across the system with government and with communities can deliver meaningful change, and we're excited for the opportunity that our resilience blueprint brings. Right.

From homes to highways, let's change lanes, at least out upon items. While home resilience remains a cornerstone of our advocacy, our strategy extends to road safety, a critical issue for our customers and for communities. I'll give you a couple of stats. Across Australia over the last 12 months, it was estimated that 1.6 million road accidents occurred that required vehicle repair. And in 2024, more than 1,300 lives were lost on Australian roads. Looking beyond this human tragedy, the economic cost is really significant, estimated at more than $27 billion a year due to medical care and property damage and loss of productivity and reduced quality of life, which is a point we see really clearly firsthand in our CTP portfolio, where claims can often last several years before injured people get back to living life to the full.

Now despite many advances in vehicle safety and despite ongoing investment in road infrastructure, the reality is that driver behavior remains a stubborn challenge. Fast acceleration, hard breaking, much more common than we like to admit. And this is a challenge we see clearly in our data, not just in our claims experience as Australia's largest motor and personal injury insurer, but also in the 550 million kilometers of telematics data that we've amassed. For most Australians, driving is the most dangerous thing that we do on a regular basis. We've long since been a voice on road safety. And in 2024, we marked the 30th anniversary of AAMI's Annual Crash Index. But this year, we've stepped it up by launching the AAMI Driving test national campaign. It educates, it engages and it incentivizes safer driving behaviors, harnessing Aussie's competitive spirit and our digital capabilities. And we are already seeing improvements in driver behavior amongst active users of AAMI's Safe Driver platform, including a 10% improvement in mobile phone distraction scores.

To amplify our efforts, we're partnering with government and the Australian Road Safety Foundation to bring road safety into schools and communities. We're deeply committed to being part of the solution on road safety in the same way that we have been for home resilience. So to close, I just wanted to end with the link between our advocacy agenda and digital insurer. As you've heard from Adam and Lisa, digital insurer gives us new ability to create product and customer experiences that are fit for a modern day leading insurer. A digital insurer also gives us product power that can amplify our advocacy agenda. It gives us the power to create innovative products that incentivize risk reduction like great driving and home maintenance.

So today, I wanted to show you that advocacy is not just a concept or a lofty ambition. It is a strategic investment in Suncorp's future and in the communities we serve. It helps us deliver on our purpose. It engages our people and it enhances our brands. It also delivers tangible benefits for shareholders, taking risk out of the system and ensuring we are at the table for important public policy debates. Our track record on advocacy shows real impact and our future focus is clear. We are committed to leading the industry, collaborating widely and delivering value for shareholders.

So thank you very much for your time today. And I just want to end with a practical tip, if you're ever here running water and you're not in the bath, do check your flexi pipes. Over to you, JR.

So the drip -- drip are here. Hopefully not. Thanks very much, Bridget, and good afternoon, everyone. It's great to see you all here today, and welcome to those on the VC. Look, I'd like to start today with our overarching investment proposition. I presented the key elements of this on the slide. No doubt it's going to be familiar to many of you, but it's worth reiterating, I believe.

Firstly, Suncorp is a growing business, and this has been demonstrated by our strong profitable growth over recent years. The strategic imperatives that we've taken you through today of platform modernization and operational transformation are primarily designed to drive growth. Lisa has taken you through how we are leveraging our unique brand portfolio and optimizing our distribution channels to drive ongoing growth in consumer. Michael has outlined key components of the key commercial growth strategy, including introducing new products through Vero specialty lines and leveraging the Vero and group capabilities. And our New Zealand business, which we haven't spent much time on today, is in good shape, along with the high-performing AA joint venture in New Zealand.

But noting the current ongoing softer market in New Zealand with a weaker economy and New Zealand dollar, along with competitive conditions persisting. We aim to deliver strong and resilient risk-adjusted returns with an underlying ITR range of 10% to 12%, giving a strong return on tangible equity. I've got a chart I'll show you later today that shows Suncorp's leading position on earnings per share growth and return volatility that helps demonstrate this. And I'm also going to remind you of some of the changes we've made to improve the resilience in our returns, and I'll do that next.

We have a well-managed balance sheet in lead up to our renewal in July, we conducted a very thorough review of our reinsurance program. I think we covered this off comprehensively with the full year results, but I'd just like to reiterate that we have a very clear and disciplined framework to use on how to use reinsurance to optimize sustainable long-term shareholder value creation. But having said that, I also want to be very clear that we continue to review our reinsurance program and assess the market, and we've retained significant optionality as market conditions continue to evolve. And also on the balance sheet, we have a well-balanced and diversified investment portfolio with a good spread of high-performing managers as well as a strong risk management capability.

And then finally, we have a disciplined approach to capital management. We have a robust and sophisticated approach to risk-based capital modeling and our capital settings. Our target CET1 range is between 1.025 and 1.325x PCA, and we look to operate in the top half of this range. And we believe these settings are appropriate. And I'll remind you that we are one of the few financial institutions not to have to raise capital during COVID. We optimize our hybrid gearing -- capital gearing within the regulatory framework that APRA set out, and I'll cover this off later as well. We remain committed to paying dividends between 60% to 80% of cash earnings, targeting the midpoint of that range. And then we'll continue to return excess capital through on-market buybacks. And I'd like to confirm that we're on track to return the $400 million identified for FY '26. Now this capital framework, we believe, combines to deliver a good dividend and an ongoing EPS accretion.

So let's move to the next slide. And the plan we've presented today does represent an important shift from the focus over the last few years. We're moving from being focused on margin remediation to being focused on growth and the ongoing resilience of those strong margins. We're now delivering margins consistently towards the top end of our 10% to 12% range, and the quality of those margins has been improved significantly with added resilience driving a very different quality proposition. Our natural hazard allowance has increased from $720 million in FY '19 to $1.77 billion in FY '26. And this reflects a reset over the period, but also an explicit resilience buffer built into the FY '26 allowance. We're investing more in the business with grow the business spend increasing from around 19% of our OpEx in FY '19 to 25% in FY '25. And our discretionary project investment has tripled over that period.

Now we believe it's critical that we have a sustainable level of investment built into our financial framework. A healthy, competitive and growing business needs ongoing investment. And the program of work we've outlined today is fully embedded within the expense and margin guidance. And then finally, our reliance on prior reserve releases has reduced to just 40 basis points in FY '25. So all up, our printed underlying ITR today is of a significantly higher quality, and we've got more confidence in its connection to reported profit all the way through to the cash profit that pays the dividend. On to then the next slide. And look, last year, we demonstrated how the Suncorp General Insurance business has driven superior growth in fundamental value relative to insurer and bank peers. And today, we give you a slightly different perspective on Suncorp's investment proposition. I've presented here a chart that positions Suncorp, domestic insurance peers, the big 4 banks, international insurers and the ASX 200. And it's based on growth in earnings per share, the volatility in earnings and the size of the circles, the bubbles representing the next 12-month P/E ratio for each.

As you can see from the chart, domestic insurers trade at a relatively attractive multiple set compared to domestic banks and the wider ASX 200 and with lower earnings volatility generally. Acknowledging that Suncorp included banking and life operations through the period on the chart, we've included a bubble that removes those businesses from the metrics, which both increases the earnings per share and reduces earnings volatility, demonstrating the quality of the earnings we've achieved in the General Insurance business over recent years. And then you can see compared to domestic insurance peers, Suncorp is attractively valued with a good mix of earnings growth and earnings volatility.

Moving to the next slide, and I'd like to take you through how we think about financial value creation and particularly the role our strategic imperatives of platform modernization and operational transformation play. Now both programs are effectively an investment in improving customer experience. That's delivering an experience that's faster. It's got less friction, it's more convenient and is right first time. In other words, just simply better for our customers. Now this obviously helps us drive growth, but also has, as Adam said, a very clear line of sight to a lower cost to serve. This then provides us with optionality for more competitive premiums to drive growth, to invest further in customer experience, driving more benefits or as required, cycle the benefits into margin.

Now given our strong current margins, our bias is to invest the benefits in value creation via growth. This creates a virtuous cycle that in turn drives more growth, scale benefit and opportunity for Suncorp stakeholders. Now I'd like to just reinforce a couple of key points at this point. The development of our leading capability on AI underpins Suncorp's ability to deliver ongoing competitive advantage as AI continues to evolve. We want to stay at the front of the wave. Our strong credentials and capabilities on tech program delivery that Adam took you through as well as the Software-as-a-Service cloud nature of our DI program are also a good source of ongoing competitive advantage. And then finally, the costs of our strategic programs, as I just said, are fully embedded in our margin guidance.

Turning then finally to capital management, and I wanted to provide an overview of how we look to optimize the capital stack at Suncorp. It's not something we spent a lot of time on recently. So the mix and level of capital that we hold is determined by our regulatory framework and risk appetite settings. And then this is then validated through comprehensive stress testing and risk-based capital modeling. In terms of mix, the APRA capital standards allow us to hold AT1 and Tier 2 to reduce the level of CET1 we hold. These are capped at 20% of our stressed regulatory requirements for each Level 3 entity. But then we have additional Tier 2 able to be utilized to fund diversification benefits between regulated entities, which, in our case, means the Australia and New Zealand businesses. The level of hybrid capital at any point in time includes buffers to manage volatility and covers future business growth, taking into account the expected future timing of refinancing plans. And I do note that we expect all remaining bank stranded AT1 and Tier 2 capital to be utilized during FY '26.

Now future issuance plans, including that bank stranded capital, will consider the profile of existing instruments, available excess capital and then projected growth. So in short, we optimized the gearing in line with APRA parameters with hybrid capital above that amount being inefficient. Now whilst on capital, I would just take this opportunity to remind you that the buybacks that we are conducting will reduce our excess capital as well as the associated investment earnings as those buybacks are completed.

And then just to close out, I'd also like to draw your attention to the ASX we put out today and the details at the bottom of some pro forma P&L and what I would call geographical moves, just reflecting a cleanup in the way we present the P&L post the bank and life sales. And importantly, they have no impact on the bottom line and no impact on our key metrics.

And on that, I'll hand back to Steve.

Thanks, Jeremy. And as we close out, I would like to just emphasize where I think and where we think the insurance industry is leading and the program of work that we've outlined today, how it will allow us to participate in that insurance industry of the future. So in my view, very strongly, in the future, insurance will be hyper-personalized. Now Digital and AI will transform underwriting, ensuring significantly more precision in both pricing and risk selection. The flip side of that is that customers will increasingly seek to monetize this precision in the form of new products and personalized premium, which together will better reflect their particular risk profile.

Investments that are undertaken inside the home and those mitigations that will be funded by government outside the home will also need to be monetized, and that, too, will have to be reflected in premium. Cross-subsidization or pooling, which has been the cornerstone of insurance for hundreds of years, it will continue to exist, but it will exist in far narrower bands. Here, the multi-brand strategy that we outlined today sets us up well for this hyper-personalized customer-centric future. Digital will be the prevailing method of engagement with your insurer.

Now that didn't sound that obvious 5 years ago, but it is obvious today, and it will be more obvious in the future. 90% of end-to-end transactions will be digitized with a residual, highly skilled workforce equipped to support those who don't want to or can't engage digitally and those, of course, with vulnerabilities. Automatic payment of claims will be the norm, the norm, with AI addressing noncompliance and fraud, effectively breaking down that historic contract-based and at times, adversarial nature of insurance customer engagement. We and others in the industry will partner with government to extend the coverage of insurance closer to 100% of the population, supporting affordability and availability of insurance products, especially for those who cannot afford the premium.

Therefore, the insurer of the future needs modern core systems across data pricing, policy administration and claims. It needs best-in-class digital interfaces and claims processes. It needs AI capability across all of its processes. It needs a readiness to advocate on behalf of its customers. And finally, of course, it needs a strong balance sheet and capable and skilled -- reskilled workforce. So today, what we've tried to do, and obviously, we'll go through in the breakout sessions is outline how we intend to be a leader in the modern insurance industry of the future.

So with that, let's move straight to Q&A before we go to the breakout sessions. Let's start in the room. Andrew?

Andrew Buncombe from Macquarie. Maybe I'll go in reverse given what you just said, Steve. If you think that insurance is going to be more personalized in the future, what are you doing from a technology point of view to deal with changing distribution channels because everything has been about costs and pushing that back into price, but nothing on distribution. So what are you doing there?

Well, distribution in the historical sense for insurance has been very contact center driven. It's been very brand-based. I believe that insurance will continue to be brand-based and the brand-based hyper-personalized insurance of the future will be very much the way that we differentiate bands of customer segmentation. So that's why we spend a lot of time on segmentation.

Distribution will also be increasingly digital. And I sort of outlined what I thought the digital ambition would be. Now we've -- sort of 5 years ago, we had 20% of our sales, service and claims lodgement undertaken digitally. And when we started the program of work in 2020, we set ourselves the ambition of saying, well, that's going to go from 20 to 80. I'm going to flip it on this year.

Last week and the week before, we originated 90% of AAMI sales through digital channels. So we're there. We're beyond where we were. The challenge for us and all other insurers and the pace at which we need to move is to take that digital engagement from not only sales, service and claims lodgment at the front of the distribution, but to take it all the way through the process inside Suncorp, outside Suncorp to the supply chain back inside Suncorp and through to the end, and that will happen. That's going to be a big challenge, but that will happen.

So distribution, 10% will be through contact centers will be high-quality, high capable, heavily skilled people. Then there'll be an encroachment of AI and other digital means into areas of what we otherwise would call the commercial insurance business, particularly at SME. There, we've got our own brands, GIO and AAMI, they've been underinvested in, but they're set for that environment. And obviously, as we work through into SME, there will be more engagement from AI.

So in terms of distribution, brands will continue to matter. Digital will be the predominant source, and there will be an encroachment of what we would today call direct into areas that otherwise were light touch intermediated.

Steve, I'll just add that in that future of AI in distribution, large language models, doing search, et cetera, as Steve said, we do feel that brands are going to retain extreme importance in that world and a multi-brand portfolio that we've got is going to position us really well around that. And we believe that -- so the brand piece will be important, but what changes is the way then the search is carried out. And we're already investing pretty heavily in thinking about how our brands interact with large language model search engines, for example, doing some work with leading partners in that space. And so there's undoubt change coming in that space, but we feel pretty well positioned to deal with it.

Excellent. The next one, just interested in your overall technology spend. Can you just remind us how much you're expensing compared to capitalizing? And on the capitalization side, what you're assuming for useful lives?

Yes. I think we are reasonably conservative when it comes to useful life on CapEx. We're talking major programs. We have a pretty high threshold to start with on capitalization. So we don't end up with an awful lot on the balance sheet. The only thing we've had material in recent years has been the bank core system. And the only material thing that we would look to have going forward would be the digital insurer system, at least in the next few years. The amortization period we've got that is 7 years. And if you look at peers, you'll find somewhere between 10, 13 might be usual. So we might take the opportunity to have a look at that, but we will be conservative when it comes to amortization period. We think that's appropriate given the advancements in tech.

And in terms of capitalization, I think when we get to the end of it, we'll probably have something like 40% of it on the balance sheet.

And then the final one from me is as you're rolling out the technology spend and the digitization and you're migrating the policy and pricing work over to Duck Creek and you're rolling all of that out, how should we think about the time frame for turning off the legacy technology?

I might get Adam to come up and go through that. Obviously, it doesn't happen day 1. It's a program of migration occurs.

Yes. Thanks for the question and for your research that I referred to earlier. So the principle that we're taking is that we're not just creating these platforms for new business. We have a high ambition to as quickly as possible, migrate existing policies across and reflected in the AI New Zealand experience, literally 2 or 3 months after we went live for new business, we started migrating existing policies. Very high quality, like more than 99% of policies cutting over automatically every night, a small subset of exceptions being managed with some data exceptions and getting in there. So that obviously takes 12 months to roll through the book once you start the migration.

So effectively, 12 months beyond the last release would be the time that you would be able to decommission the legacy systems. We haven't got absolute precision on some of the outer releases in the plan. But when you looked at the kind of overall road map, you can see that we've got a few years of the build and rollout across the brands and then a 12-month lagging period to get the migration completed. So it gives you a pretty good ballpark.

And I'll just add, Adam, that the cost of running duplicate systems, if you like, over that period of time is all allowed for in the way we think about those expense and margin guidance.

Yes. But I think the key message is that we're not just putting in new tech. The ambition is to get the existing policies migrated across, and we've proven that out very definitively in the first release and same principle applies for AAMI and beyond.

Nigel Pittaway from Citi. Just a question on the growth. I mean you say you've got renewed focus on growth, having remediated margin. What kind of volume growth for the overall group would you view as a success of that strategy?

Without giving definitive guidance on the topic, you've heard us talk about this previously, and I'll break it into the portfolios. It's the best way to look at it. I mean motor insurance, we've got sort of high 20s market share. There, you look to sort of grow with the market or slightly ahead of the market. Now if the market is growing and it very much depends on new car sales and various other factors that are going on in the economy. If the market is growing at 1.5%, 2%, then we look to grow at that level or slightly higher.

Home insurance is a more nuanced sort of assessment of aggregate growth because we're now in a position where we can look at every individual property in the country and identify it from a peril perspective along the lines of low, low-medium, medium, medium-high, high and extreme, and categorize it in that area. And so the aggregate position that we take on home insurance is to improve the quality of the book by growing more in low, low-medium and medium as opposed to growing in high and extreme, but in fact, sort of ceding share in those areas. And we've been very successful with that over the past 3 or 4 years as we start -- turn to that level of precision in our underwriting. And I think as we build out the tools that AI will provide us, that will significantly improve the granularity of how we price home.

So we might have low 20s market share in home today. We would like to grow with system, but we'd like to grow disproportionately ahead of system in low, low-medium and medium and seed share in high. And so that sort of quite a nuanced sort of answer to the question. But again, I think the ambition for us in home is to grow with the market and ahead in low.

Michael has been through the commercial opportunity. We think it's material for us. I see our natural market share that we -- it was a bit of a nebulous sort of concept, but to be somewhere between 12% and 13%. It was around 12% before we started to remediate the portfolio ahead of the rest of the market, came back to 8%, and it's growing steadily and we'll be in double digits fairly soon, I would suspect.

The pathway of opportunity in commercial, it's multifaceted. I said we had the brands there to leverage. They've been underinvested in. We're starting to invest in them. The Vero Specialty Lines opportunity that we've got, the opportunity we've got in SME, I think there's an opportunity for us to grow well ahead of system in commercial, but conscious of the macro environment with the insurance cycle. So it will always be margin first, growth second. But I think we can achieve a bit of both of those metrics.

New Zealand, I think we've got around 26% market share there. And everything I'm talking about is organic, by the way. There's an opportunity for us, I think, to edge close to 30% over the time of this plan and maybe a bit longer. Again, conscious of the cycle, but we have a unique position in New Zealand. We went back after all the weather events 12, 18 months ago, 2 years ago, whatever it was now and reassessed the portfolio we have there. And I think if you're going to build a portfolio in any jurisdiction, what we've got in New Zealand is fantastic. Vero, Vero driving commercial intermediated, Vero liability, which is a fantastic business and AAI, which is our motoring club business, which grows well ahead of market and the second most recognized brand in the country.

And so there's no reason why as we start to build capability, and we haven't talked a lot about the New Zealand technology investment other than we will talk about AAI. There's also a big investment going into the underwriting layer, corporate partner layer in New Zealand. So I think there's a pathway for us to get to 30%.

Obviously, workers' comp, CTP, state-based schemes, we don't want to grow any more in Queensland. Obviously, with CTP, opportunity for us to grow a bit more in New South Wales. But again, that is very much an underwriting story as opposed to a growth story.

So when you wrap all of that up, at least for the next 3 to 5 years, there's an organic pathway for us to grow and to grow strongly, but to grow carefully and deliberately and to leverage the opportunity that we've got. The opportunity now with new platforms and with AI to really leverage that to -- with the margins where they are, the returns are, I think, adequate and satisfactory. Every dollar that we can save in AI and that we benefit from in their platform can be recycled into growth, lower customer premium relative to where it would otherwise be, more affordable products, more available products. Our franchise is growing, and that's reflected for shareholders in a better multiple. I don't know whether you want to add anything.

And maybe just a second question. I mean, it's early days, but it does look as if reinsurance rates might be reasonably favorable again come 1st of January. You obviously said you'll review the reinsurance program and assess it as market conditions change. As it looks at the moment, is that going to throw up more opportunities to revisit that, do you think?

Yes. Look, both of us are fresh, not fresh, but reasonably fresh from Monte Carlo, which is somewhat an underwhelming experience, let me tell you, everything from the accommodation all through. So despite what it sounds like, it's for us, 45 meetings back to back over 3 or 4 days with reinsurers.

We had a favorable renewal, both a favorable renewal in an absolute sense and a favorable renewal in leveraging the scale. I think -- and I'll just be careful, there might be reinsurers in the room and they're fantastic partners of ours. But I think the reset went too far. We went through the reset over the last 3 to 5 years. And when I say went too far, I think there's been a transference of risk from the reinsurers to the primary insurers around the world. And so reinsurers profit and loss statements and balance sheets are incredibly strong, and they continue to be incredibly strong. But they're not handing that back necessarily universally to shareholders, their shareholders, which means they see good opportunities still.

So I don't know what that means for 1 January renewal. It's still very much reflective of what might happen in a macro sense. But we take it upon ourselves in those environments to argue on behalf of the policyholder because reinsurance costs are a big input into pricing. So I think there are all other things being equal, a continuation of the rate online reductions that we've seen. I don't know what scale they'll be, but they should continue. By definition, they should continue. And this transference of risk, we believe, should pop out also in access for primary insurers to things like aggregate covers because we don't have the choice but to cover the whole of the country, and we do that. That's our social license. And we would like our partners in reinsurance to help us do that. And so I don't know what form that takes. We are active in the market at the moment, trying to test some of those propositions, and we'll see where it ends up. But I think there is more room to move on reinsurance pricing.

I'd just add, Steve, that as we've said a number of times, we have no physical philosophical -- physical philosophical opposition to any of these sort of reinsurance programs, but they've just got to make sense for us. And we do have a reasonably disciplined framework that we assess it through. But should the market continue to evolve, one could imagine that at some point, those thresholds might come into play and aggregate covers, quota shares, they're sort of the obvious things for us to be looking at?

Kieren Chidgey, UBS. Steve, I just want to come back to the discussion on the hyper personalization of insurance moving forward. You guys have a very strong competitive advantage on the expense ratio. But we're still seeing challenger brands grow strongly, still attack the pricing cross subsidies of bigger insurers. What specifically will change from an underwriting capability perspective with your digital insurer and AI capability that's going to change that story?

Yes. I mean, I might answer it in a couple of parts, but just to the concept of hyper-personalization, why I believe emphatically that it will be part of the future. We are now segmenting our apparels by those 7 -- 8 or 9 categories that we do. What we've talked about today, flexi pipes and lithium batteries. But the home of the future is going to have so much AI capable technology embedded in it that if you're prepared to get a roof or up on the roof to repair your roof and put -- make sure that's -- we give you a certificate for that, if you're prepared to get a plumber in the house and replace all your flexi piping, the little robot that you've got, the little thing that does the vacuum cleaning today, that will be an AI-enabled device, that will take photos of all your contents and load that into your sum insured calculator and it will go straight into the policy administration system. It will probably turn off the water if there's a leak, I'll put the fire out. Who knows what it will do, but that's the future of insurance.

But if you're going to pay $30,000 or $40,000 for that, you're going to want to monetize it because you're not going to pay the same premium as your next door neighbor who doesn't do that. And so I think the consumer of the future is going to heavily monetize their premium to get the benefit relative to the risk that others may have. And that's what I think will underpin hyper-personalization. And if you haven't got the systems that allow you to do that, our old protect policy administrator couldn't do it. Our old pricing engine couldn't do it. Our claims system of the future will need to be able to manage that process. So that's what I think is -- why we all have hyper-personalization.

I think in terms of the -- what they call the smaller players, and they have built scale over time, I think we've got all the assets available to us to offset some of that. Lisa has talked about Bingle. Bingle, I wouldn't say in hibernation, it's been there all the time, but we rolled it out nationally. It's pointed directly at a subset of the customers of those -- and we'll use our firepower if we need to, to offset that.

Cross subsidies in insurance are getting very difficult to sustain. You can't cross-subsidize. That's why we took a very strong position on Queensland CTP with the government because we can't subsidize Queensland CTP margin through comprehensive motor because we'll be taken out of the market. So the cross-subsidy effect, portfolio to portfolio, is less obvious and less possible today. There is still some subsidization between brands, and there always will be, but the narrower -- it will be far narrower than it's ever been.

So I think what you've heard today with AI and with the platforms and the business that we're building, plus the brands, they're the core of the competitive advantage for Suncorp into the future. And we're now in a position with margin where it is, returns where they are to be able to invest fulsomely in them to capitalize.

I just had one second question sort of around, I guess, Adam's presentation around Agentic AI use. And just wondering if you could talk to sort of any examples or leadership globally that you look to in terms of deployment around service and claims.

Yes. Thank you. I mean we obviously are infatuated with what others are doing, both locally and globally, and we spent quite a bit of time connecting with other counterparties. I think it's fair to say it's still relatively early days. So I think seeing end-to-end examples like the ones that we're envisaging, I think, are contemplated, but hard to see them play out yet. But we certainly -- and you'll see in the breakouts that we've got some building blocks that we can start to bring together some of those more end-to-end experience. And you'll see in claims when you go through lodgment, assessment, the management of the claim, [indiscernible] the claim, you can start to take a lot of those capabilities and put them together. So we've certainly seen plenty of good examples offshore of people who are doing interesting things, but I think it's still at the kind of starting of that journey, and we would like to be not just a local leader, but globally recognized in what we're going to achieve in that regard.

Freya from Bank of America. I agree with you that the application of AI is huge to the industry, but do you see it as good, bad or neutral? What's to stop your smaller competitors or even new entrants from also going down this hyper-personalization route because it seems like AI is reducing the barriers to entry. What's your competitive advantage here?

Well, I think the competitive -- you're right, the smaller players can go down that path. And to some extent, the way that they target niches and target sort of better customers either by geography or more brutal means, they're doing some of that today, but not the level of sophistication that AI will be able to deliver. So yes, they can do it. And probably it reflects if we didn't do what we're doing, that what would happen over time, and that's not a good outcome.

The competitive advantages that we've got are our brands. Firstly, the segmentation of our brands and the way we can position that into subsets of the market so that we can participate in that personalization. The technology that we've got, I think we're towards the leading edge of some of this stuff. And while over time, the benefits of AI as they are applied across the industry will be recycled back into customer outcomes generally. If you're at the front of the wave, you can leverage that to the benefit of your shareholders. And so we want to be at the front of the wave, not in the middle of the wave and certainly not at the back end of it.

And then I think the key thing for us beyond all of those that we have as a significant advantage over smaller players is scale. And to the way I answered Nigel's question in terms of the growth, if we can retain that scale, while we're doing all of this work to modernize our business and be at the forefront, I think we've got the unique opportunity to drive superior value relative to any of our competitors. So brands, segmentation of brands, new systems at the front of the curve in terms of AI and then leverage that scale effectively, that's the way we think about how we can be at the front and not the back.

I'll just add, Steve, to the question, good, bad or indifferent or whatever the other term was -- good, bad, ugly, maybe. We generally think AI is pretty good for the insurance industry. Obviously, insurance is right for AI. We've been through that. But if you think about the benefit of it for -- the broader benefit of it, broader community benefit of AI and insurance is it will help insurance make it more affordable and more accessible, which is a good thing for insurance and community. So net-net, we have to say we think it's a good thing.

On the -- I mean, it's linked to that, but you talked about less pooling of risks because of personalization. Does that actually improve affordability and access if people are being more individually priced for risk?

Yes. I think the caveat I put around that is the partnership with government. Because today, there's roughly between 2% and 4% of the population where insurance is very difficult for them to achieve. And that's through no fault of their own. They've just been with the full government approval built and bought in areas they should never have been able to build or buy in. And obviously, with the emergence of climate change and frequency and severity, that 2% to 4% is going to sort of edge forward over time.

And some of the issues I talk about inside the home all make good sense for someone who can spend the $20,000 or $30,000 or $40,000 to improve the quality of their home. But if you can't do that, then you end up having the inside the home example relative to the outside one where you end up with a higher insurance premium. So I think that's where it becomes very important for the industry. And certainly, we're at the forefront of it to sort of agree with government around how we can provide incentives for people to make those investments in outside the home. They may well be tax deductible. They may well be subsidized by third parties. And certainly, mitigation resilience, et cetera, helps improve that outside the home piece.

So you're right. I mean, the nature of insurance in a hyper-personalized world will see it more difficult to cover 100% of the population, and that's where we're working closely with the government to try and make sure that we can expand that coverage with the support of the government to close to 100%.

And just last question on PYD reliance. Has this -- is this less conservative reserving over time or business mix changes?

Sorry. What's that...

Reduced PYD reliance in your earnings.

I mean it's primarily a result of just business mix. So particularly in schemes like New South Wales that have been reformed more -- less in common law and more in defined benefits, just the opportunity for reserve releases becomes less. But we do think that's a -- having less reliance on that leads to a better quality of underlying earnings.

I got time for one more question.

Andrei Stadnik from Morgan Stanley. Can I ask my two questions, if I can. First one, AI, can you talk about the dollar spend? And what kind of benefits ratio are you getting for the dollar spend on AI, if you can?

Yes. We won't reference the actual -- the absolute dollar, but the payback on AI is probably somewhere around the 2-year plus a little bit mark, somewhere around that. So we would say that the -- relative to a lot of these sort of investments, the payback on AI is pretty attractive.

My second question, can I -- can you -- if any chance to talk about the current pricing trends that you're seeing since 30 June across portfolios?

And a very snazzy pair of sneakers there, Andrei. I mean, I might try some of them out for the next roadshow.

All right. Well, thank you. I'll leave that there. And I'd ask everyone just to -- we're just going to disconnect and thank everyone on the webcast for joining us.

Good morning, and welcome to Suncorp's 2025 Annual General Meeting. As Chairman of the meeting, I'm informed we have 204 shareholders, proxyholders and other attendees already participating today, both here in Brisbane and online. As a quorum is clearly present, I declare the meeting open.

Before I proceed, could I please ask everyone to ensure your mobile phone is on silent mode. Please now join me in welcoming Rafiti Tovee to share a welcome to country with us. Rafiti is a proud descendant of the Turrbal peoples. Raised in culture and guided by her elders, she has learned traditional law and protocol. With over a decade of experience in early childhood education, Rafiti is passionate about empowering the next generation and strengthening her community through truth telling, advocacy and cultural connection. Rafiti is here with us today with the blessing of her Auntie Turrbal Elder, Songwoman Maroochy to deliver the welcome to country on behalf of the Turrbal people of Brisbane. Please join your Board in making her welcome.

Before I start my welcome to country today, I really would acknowledge any Aboriginal and Torres Strait Islander peoples here today, and I would like to pay my respects to all elders past, present and emerging, all actually acknowledge Yuggera Peoples as our neighboring traditional custodians. [Foreign Language] Welcome. Welcome. [Foreign Language] Welcome to Turrbal Country, Meanjin. My name is Songwoman Rafiti, I'm a proud Turrbal descendant of the lands that we gathered here on this morning, Meanjin, also in Brisbane. So can we say Meanjin together?

Meanjin.

Well, you're practically fluent. So the purpose of this ceremony is to continue one of the oldest cultural protocols in the world and to really continue the same essence and connection as my Turrbal ancestors did for visitors coming to and from Turrbal country. And that really extends to the Turrbal story from my ancestor Daki Yakka, who is a healer and the Chief of Brisbane, who was able to keep his law LOIE. And also this is thanks to the resilience of his daughter, Kulkarawa, a songwoman, who was able to abscond [indiscernible], Brisbane River all the way through to Sunshine Coast Kabi Kabi country that she remained her truth telling, storytelling culture and her law. And that's why I'm here today on behalf of the Turrbal people.

So now I would like for you to connect with me to our country today to, as I was saying you the Turrbal blessing song. A blessing song to invite positive energy into your space. And wherever you are in life, it will help you cleanse wherever you are.

[Presentation]

Thank you for having me today. Have a great day.

Thank you, Rafiti, and what an absolutely beautiful voice you have. Please, let's thank, Rafiti, again.

I would also like to acknowledge the traditional custodians on the land on which we gathered here in Brisbane and pay my respects to their elders, past and present.

I'd now like to introduce Belinda Speirs, our Chief Executive, People, Legal and Corporate Services to cover the meeting procedures we will be using today.

Thank you, Chairman, and good morning, everyone. For the shareholders and proxyholders who are participating with us at the physical AGM being here in Brisbane and wish to vote, please make sure you can access the Vote+ app using the PIN on your green attendance card or that you have a yellow voting paper card. If you wish to ask a question or make a comment, please move now to the nearest microphone. If you are unable to move, please raise your hand now and a team member will assist you.

In the unlikely event of an emergency, please follow the directions provided by the Sofitel staff. For those shareholders and proxyholders who are joining us online and wish to vote or ask section, you may be familiar with the platform from our previous AGMs. You also have the opportunity of asking your question via the questions and comments phone line that is available during the meeting. To help with the smooth running of the AGM, we invite shareholders and proxyholders who are participating online to submit your questions or comments now.

Further details about how to ask questions and make comments using the platform or the phone line are contained in the online AGM guide. You can access the guide through a link at the bottom of your screen or on the Suncorp website. If you encounter any technical difficulties with the platform at any time during the meeting, please contact the share registry's online AGM support team on 1 (800) 990-363. This phone number will remain visible on your screen throughout the meeting. In the unlikely event that technical issues prevent the AGM from proceeding as planned, Suncorp will make announcements by the ASX and our website.

I would now like to briefly cover the meeting procedures that the Chairman will follow today. Firstly, this is a meeting of Suncorp shareholders. As set out in the Notice of Meeting, only shareholders or proxyholders are entitled to vote on the resolutions, ask questions or make comments. The Chairman will allow a reasonable opportunity to address questions and comments as each item of business is considered. Please ensure that your question or comment is relevant to an item of business and to shareholders as a whole.

If there are a large number of shareholders who wish to ask questions, the Chairman may consider introducing a question limit to ensure that all interested shareholders have the opportunity to speak. Where there are similar questions, the Chairman will aim to acknowledge those who have asked the question. However, the Chairman will provide a single response in order to streamline today's proceedings.

If you have a matter you'd like to raise as a customer and you are participating at the physical AGM venue, members of our customer advocate team as well as customer representatives from the now ANZ-owned Suncorp Bank are here today with us, and will able to assist you in the foyer. If you're participating online, please contact our customer relations team using the contact details on the last page of the Notice of Meeting. Any customer-related questions specific to an individual will be referred to our customer relations team for response and will not be addressed during the AGM.

Share Registry and Suncorp representatives are also available in the foyer to assist with any shareholder related questions that do not relate to the business of today's meeting. When taking questions and comments for each item of business, the Chairman will first cover a number of relevant questions received prior to the meeting. The Chairman will then invite shareholders and proxyholders participating here at the physical venue to speak. We will then address any questions received through the phone line and online platform. The Chairman will retain full authority to conduct an orderly AGM. In particular, questions or comments that are offensive in any way will be taken as being out of order, and will not be acknowledged at all during or following the meeting. Other offensive or disruptive conduct by those who are participating here in Brisbane will also be taken as being out of order and the relevant participant will be asked to leave the meeting.

If you are voting today and need to leave the AGM early, please remember to submit your voting card before you leave.

I'll now hand you back to the Chairman.

Thank you, Belinda. I'm getting my steps up. I'll stand here for a while now. Thank you also to those who have already voted or pre-submitted questions relating to the business to be covered at today's meeting. As previously requested, the direct and proxy votes that have been received prior to the AGM were released on the ASX platform this morning and will be shown on the screen before we vote on each resolution.

I would now like to introduce your Board of Directors who are here in Brisbane today. In addition to their significant Board experience, each Director brings a mix of financial services and other relevant business experience and expertise that enables your Board to be effective in governing Suncorp. From your right, Lindsay Tanner. Lindsay, you can wave or stand or something. So the rest of you are now warned.

Lindsay has worked at the highest levels of government and business for almost 4 decades and is a recognized authority on corporate governance, economics and finance. He is a member of the Risk Committee and also serves on our New Zealand subsidiary Boards. Lindsay's current board roles outside Suncorp includes superannuation and investment management companies.

Sylvia Falzon. Sylvia chairs the Board People and Remuneration Committee and is a member of the Risk Committee. Sylvia brings to Suncorp valuable experience in a range of regulated and customer-facing industries, including financial services, health care, retail and aged care.

Simon Machell. Good wave. Simon is based in Singapore and serves on a number of international Boards. He has deep strategic and operational knowledge of the insurance industry and brings to Suncorp an international perspective on current industry trends in insurance. Together with insights into the risk and opportunities associated with emerging technologies and new business models. Simon is currently a member of the Board People and Remuneration Committee.

Duncan West. As you are aware, your Board has chosen Duncan to succeed me as Chairman following my retirement at the end of today's AGM. Duncan has served on your board since 2021, including as Chairman of the Board Risk Committee. He has 40 years of experience in the general insurance and financial services sectors, both in Australia and overseas. I will invite Duncan to make some comments later during the meeting.

And Steve Johnston, needs little introduction in Queensland. Steve continues to capably lead Suncorp since his appointment as CEO and Managing Director in 2019. I will invite Steve to address you later during the meeting. And I will also ask him to respond to some shareholder questions.

Elmer Funke Kupper. Elmer has significant financial services experience as well as experience in navigating demanding regulatory sectors and transforming business models through the adoption of technology and digital services. He has served as CEO of 2 ASX-listed companies and is currently the member of the Board Audit and People and Remuneration Committees and will now succeed Duncan as Chairman of the Risk Committee once Duncan becomes Chairman. So maybe you should be on notice again some questions today too, Elmer.

Gillian Brown. Gillian has developed broad skills and experiences in financial services, law, infrastructure, investments, finance and ESG initiatives over her 40-year career. Gillian is a member of the Board Audit Committee and like myself, is passionate about the State of Queensland.

David Whiteing is our newest appointment to the Board being appointed in February of this year. David brings to the Board more than 30 years' experience leading innovative technology programs in a range of sectors, including professional and financial services. David will seek your support to continue as a director through the usual election process later during the meeting. And I will speak more about David from then, and you will hear from him as well.

Ian Hammond. Ian chairs the Board Audit Committee and is a member of the Risk Committee. Ian brings to Suncorp extensive knowledge of the financial services industry as well as expertise in financial reporting and risk management. Ian is seeking reelection today.

And Sally Herman. Sally is currently a member of the Board Risk Committee and previously chaired our Customer Committee. Sally has strong expertise in running retail banking and insurance products, setting strategy for financial services businesses and working with customers, shareholders and regulators as well as government. And Sally is also seeking reelection today. So you will hear from her as well.

You've already heard from Belinda Speirs, who is supporting me in running today's meeting. And Belinda has quite a long title, as you heard, Chief Executive of People, Legal and Corporate Services and joined Suncorp in 2013. Belinda will moderate the online questions from shareholders and proxyholders during today's meeting. In addition to Belinda, other members of Suncorp's executive leadership are also with us today, and I am going to ask you to stand and face our guests as I introduce you.

First and foremost, we have Jeremy Robson. Jeremy is our Chief Financial Officer and has been with Suncorp since 2013. Lisa Harrison. Lisa is our Chief Executive Consumer Insurance and joined Suncorp in 2004. Jimmy Higgins. Jimmy is the CEO of Suncorp New Zealand and has been with Suncorp since 2008. Michael Miller. Michael is our Chief Executive Commercial and Personal Injury Insurance and has been with Suncorp since 2011. Adam Bennett. Adam is our Chief Information Officer and joined Suncorp in 2020. And Bridget Messer is our Chief Risk Officer and joined us in 2022.

We're also delighted that Robert McDonald is joining us today. Rob became Chairman of our New Zealand Board in September. In welcoming Rob, the Board also wishes to formally record our thanks to the outgoing New Zealand Chair, David Flacks. David made a valued contribution to the governance of our New Zealand subsidiaries during his 6 years as a director, followed then by his 6 years as Chair. It was a privilege to recently visit the New Zealand Board leadership team in Auckland to farewell David and to welcome Rob.

In addition, we have Bernadette Norrie. Bernadette is Suncorp's customer advocate and he's with us today to answer any questions that customers may have.

Before I invite Steve Johnston to speak, I will begin today's proceedings with my address.

As I stand before you today approaching the close of my decade-long service on the Suncorp Board the last 7 years as your Chairman, I'm filled with immense pride. Over these years, our company and indeed the broader environment in which we operate has experienced a tremendous amount of change.

We've navigated rapid technological advancements, widespread digitization, shift in customer and regulatory expectations and the disruptions arising from the global pandemic. Added to this are the challenges posed by climate change and the ongoing energy transition, each shaping the fabric of our society, industry and business.

Through all of this, Suncorp has demonstrated remarkable adaptability, and I'm proud to say we've emerged a stronger more resilient and purpose-led organization. Today, Suncorp stands well positioned to embrace the opportunities of the future as a digital first pure-play insurer and to deliver improved outcomes for our customers across Australia and New Zealand and value for you, our shareholders.

The 2025 financial year marked the culmination of a significant simplification journey for Suncorp, which did see Suncorp emerge as a stand-alone general insurer.

In July last year, we finalized the sale of Suncorp Bank, and in January this year, concluded the sale of our New Zealand life insurance business. Following this, we also worked through outstanding approvals relating to the return of capital to you, shareholders, changes to the Suncorp constitution, which you approved last year and implementation of transitional services arrangements and brand licensing of the Suncorp Bank brand to the ANZ Banking Group.

Suncorp Bank is now owned by the ANZ Banking Group. And like many of you, I continue to be a customer of Suncorp Bank, which in effect, means I am a customer of ANZ Bank. The Suncorp Group as a dedicated insurer remains proudly headquartered in Queensland. And like many of you, I hold Suncorp insurance policies. Suncorp continues to offer valued products and services through our well known insurance brands, as you can see on the screen, including AAMI, APIA, Bingle, CIL, GIO, Suncorp, Shannons, Terri Scheer and Vero in Australia, and AA Insurance and Vero in New Zealand. This strategic decision to sell the bank was made with a clear goal to focus our efforts and resources on our core general insurance business and deliver the benefits of being a strong, profitable, reliable and trusted insurer for Australia and New Zealand.

Your Board was pleased to return to shareholders $4.1 billion in net proceeds from the bank sale in March of this year, noting this was in line with our commitment at the time of announcing the sale in 2022. For retail shareholders, those in this room, this translated to a capital return of $3 per share and a fully franked special dividend of $0.22 per share. Through our strong retail shareholder base in Queensland, it also meant an injection into the state economy of around $0.5 billion.

The Board's determination to pay a fully franked final ordinary dividend of $0.49 per share, which was paid to shareholders yesterday is another tangible reflection of our commitment to delivering these benefits to you, our shareholders.

Our CEO, Steve Johnston, will cover the financial year '25 business performance in more detail, including the drivers of the strong net profit and tax after earnings result, which was delivered. I would, however, like to note the Board's ongoing disciplined approach to the management of capital through the year, as always, factoring in our external operating environment.

Our announcement last month of an on-market buyback of up to $400 million reflects our robust capital position and importantly, provides additional flexibility in how and when Suncorp facilitates the return of capital in excess of the needs of the business going forward.

This year, Suncorp supported customers through 17 declared natural hazard events. And while the financial cost of these events were more than $200 million below our allowance for such events this year, the enormity of what was faced by those impacted by extreme weather cannot be underestimated. Our CEO will talk through dynamics of our natural hazard allowances which have increased year-on-year given the frequency and severity of such events.

Your Board, executive team and I have spent considerable time visiting customers and communities impacted by severe weather through the year, including flooding across Queensland's North particularly the towns of Ingham and Cardwell, intense rain and flooding across the Mid North Coast and Hunter regions of New South Wales, and just on our doorstep here in Brisbane, the Gold Coast and surrounds, following ex-Tropical Cyclone Alfred.

During my time at Suncorp, I have visited a number of communities following bushfires, drought, floods, earthquakes and cyclones. Notwithstanding the immense hardship and devastation experienced, I've personally been inspired by the courage and resilience shown by all the people and communities that I have met over this time. This admiration and appreciation extends to each of the emergency services we work closely with, including our police and fire services and SES representatives and volunteers, who regularly risk their own lives to help others in need.

What has been evident through each of my visits is the Suncorp's team's unwavering commitment to supporting our customers before, during and after these events. The team's efforts to get every customer back into their home or their business, working in partnership with builders, repairers remains an absolute priority. This year, your Board also spent some time visiting a number of home and motor suppliers to gain a deeper understanding of the market trends they are observing and how they are driving innovation and efficiency to deliver better outcomes for our customers.

It's been particularly rewarding to see our significant jobs and investment commitments made to Queensland through the sale of the bank already making such a difference to the way we manage disasters. As you can see on the screen, this includes the launch of our state-of-the-art disaster management center, located in our Brisbane headquarters, a fleet of mobile disaster response hubs that can be deployed into affected communities to provide face-to-face customer support and the opening of a new regional office hub in Townsville, which is set to employ more than 100 additional local people. These investments are truly enhancing the way we prepare for and respond to major weather events, not just across Queensland, but right across the Tasman.

The insights we gain through leading technology and capabilities we've invested in are critical in supporting our long-term -- long-standing advocacy agenda, aimed at creating a more resilient Australia and New Zealand that can better withstand the impacts of natural disasters.

We continue to work with governments at all levels, industry and community stakeholders to argue for greater investments in mitigation and resilience measures. We've welcomed more than 200 government regulator and industry stakeholders to our Disaster Management Centre and Suncorp Control Centre. These visits provide an opportunity to showcase our leadership in disaster readiness, customer support and resilience innovation. But as importantly, these visits are helpful in driving meaningful collaboration and a genuine national conversation on infrastructure and resilience investment, the importance of modern disaster codes and data sharing frameworks.

There does continue to be a need for local councils to proactively take action to help protect the communities they are closest to. There are 537 local councils across Australia with different levels of rigor around zoning and land development and ensuring local infrastructure supports risk reduction for the community. While good progress has been made, there remains a very long way to go.

I know this ongoing stakeholder collaboration and important advocacy agenda will continue to be a priority of your Board and management team in a bid to better protect people and address the growing challenge around access and affordable quality insurance.

It's important to note that tackling these challenges is at the very heart of Suncorp's refreshed strategic plan which your Board was pleased to endorse in May of this year. Steve will cover Suncorp's strategic priorities in more detail. However, I'll point out that Suncorp's focus on modernizing and transforming the experience for customers through a responsible deployment of technology, including generative artificial intelligence, has remained front and center in the Board -- for the Board in considering the relevant skills and experience required to guide Suncorp through the next phase.

The role of the Board is to ensure the interest of shareholders are considered. That is why maintaining optimal board composition to support Suncorp's priorities has remained a key focus during my tenure as Chairman. Board renewal remains ongoing. This year, we were pleased to welcome David Whiteing to the Board. David brings extensive financial services and business transformation experience as well as a sharp focus on the contemporary technology landscape relevant for Suncorp's next chapter as a dedicated general insurer. David is well connected into the global tech community, which is invaluable for Suncorp. As I mentioned earlier, David is standing for election today, and you will hear from him shortly.

I'm equally pleased that Sally Herman and Ian Hammond will stand for reelection, providing important continuity for the Board as it undertakes renewal, and you will also hear from Ian and Sally shortly.

I would like to take this opportunity to congratulate and welcome Robert McDonald, who, as I mentioned, assumed the role of Chairman of the Suncorp New Zealand Board following David Flacks' retirement. Our New Zealand business remains an important part of Suncorp as a trans-Tasman insurer, and I wish Rob all the best in his new role.

As Board members, we understand the importance of continuously educating and upskilling ourselves, staying abreast of advancements in emerging technologies and the evolving cyber and data security landscape. This has remained a key priority through focused overseas study tours, regular sessions on emerging risks and formal courses undertaken by the Board during the year. Ensuring proficiency in emerging areas is more critical than ever, and the responsibility I know that each of us take seriously.

I will point out that having owned a bank for a number of years, Suncorp had to be an early adopter of building cyber resilience into our operations, and our focus on this -- embedding this across our business as an insurer has continued. Over my tenure, I have observed a tenfold increase in the sophistication and prevalence of cyber threats, scams and fraud. Combating this challenge and mitigating the risk of harm for our communities and businesses will continue to require a joint effort across all sectors, and I urge ongoing personal vigilance by our customers and by you, our retail shareholders.

I'd like to close by saying what a huge privilege and deep honor it has been to serve Suncorp and your Board over the past 10 years. Having successfully completed the return of capital from the sale of the bank while also bedding down our operating plans as a pure-play insurer, I'm confident that now is a logical point in Suncorp's evolution to hand the baton over to a new Chairman to steward the company through its next chapter. And as I mentioned, we're really fortunate that Duncan West, who served on our Board for the past 4 years has agreed to take on the role of Chairman. And as you've heard, Duncan is a highly experienced and well-respected director whose knowledge and expertise has been gained over 40 years, both in Australia and overseas.

During his time on the Board, Duncan has served as Chairman of the Risk Committee and a member of the Audit Committee, and I will take this opportunity to congratulate Duncan on your appointment and wish you well. Duncan will address you later today.

Thank you to each of my fellow Board members and those I've worked with over the year for your counsel, diligence and camaraderie. We've certainly navigated some testing times together, and I value your support. I wish each of you the very best. I know Suncorp is well placed to meet the challenges and seize the opportunities ahead under your stewardship.

The role of a CEO in an organization like Suncorp is critical to our success, and I'd like to acknowledge Suncorp CEO, Steve Johnston, for your outstanding leadership, vision and efforts to deliver outcomes for Suncorp and our stakeholders. I wish Steve and your talented executive team, who have also led with determination and resilience, the very best as you forge the path forward as a leading trans-Tasman insurer.

To all of our Suncorp people, my sincere thanks to each and every one of you for your hard work and dedication to our customers, partners and communities. Suncorp is a business defined by resilience, adaptability and a steadfast commitment to our purpose. You are at the absolute heart of that.

Finally, to you, our shareholders. I'm deeply grateful for your trust and support during my tenure and a special call out to those of you who have come along to our AGMs each year here in Brisbane. Thank you for your loyalty, and I look forward to having a chat over a sandwich and a cup of tea a bit later.

I do look forward to seeing Suncorp continue to grow, adapt and deliver lasting value in the years to come as both a shareholder and a customer.

Before handing over to our CEO, Steve Johnston, to address the meeting, I'd also like to thank the team of people who helped bring our AGM event together. There are many of you in the room and maybe I'm running too early. I should wait to see if we get through glitch-free. But the acoustics and everything you see in front of you is possible because of this very talented team.

So I'll now hand over to Steve Johnston to address the meeting.

Well, thank you, Chairman, and good morning, everyone. It is, as always, a pleasure to be here to report on Suncorp's performance over the 2025 financial year, but also to update you on our strategic priorities, particularly now that our simplification program is complete, and we now move forward very confidently as a pure-play general insurer.

But before I go into the detailed financial results and our strategy, I just want to talk for a moment about something that doesn't form part of our P&L or our balance sheet, but it is fundamentally at the core of everything we do here at Suncorp.

Now this is a slide I start with every results presentation. I can see analysts, investors sometimes rolling their eyes. But I believe it describes very succinctly how we believe value is created at Suncorp. Our purpose, which is to build futures and protect what matters when delivered through our people in support of our customers, in that order will always deliver superior financial returns for you, our shareholders.

Delivering to our purpose is more vital than ever. Given each year that goes by, we see more individuals, families and businesses depending upon us to deliver in their time of need. And again, this year, like many others before, I've seen the trauma that's etched on the faces of those who have unfortunately experienced and been displaced by extreme weather events. Now close to home here in Southeast Queensland, we felt the full force of Cyclone Alfred while families in towns like Taree, Port Macquarie, Northern Townsville, Ingham and other areas around Far North Queensland and North Queensland experienced their major flooding events in some cases, 3 in the past 5 years.

Now the financial cost of these events seriously underestimate, seriously underestimates their true impact on our communities. How could you possibly put a dollar value on the trauma associated with being woken at night by the sound of an enormous gumtree punching through your roof or the insidious march of muddy water through your home swallowing up your valuable possessions.

Every one of the 120,000 natural hazard clients that we dealt with this year has its own story. From a fridge full of spoiled food to the quick destruction of property, our customers rely on us to get them back on their feet and back in their homes, their cars and their businesses.

We know our actions in these critical moments can have a profound impact on their futures. When we get it right, as we do in the vast majority of cases, we make such a huge difference. But if we get it wrong, we're just compounding the challenges our customers already face. It's a responsibility I, my team and the whole of Suncorp take very seriously, and that's why we continue to challenge ourselves to do better to uplift the customer experience and to better equip our people and to improve the way we work with our repair networks and our suppliers alongside investing in leading disaster management technology and capability.

Now it's a sobering statistic that over the past 5 years, we have managed more than 660,000 natural hazard claims. And we've increased our allowance for such events by around $820 million, that's $820 million since FY '21 financial year '21. This experience not just the financial costs, but the insurmountable human toll underscores the ongoing importance of accessible and affordable insurance for all Australians and New Zealanders, but particularly those in high-risk areas. Now these topics remain core pillars of our advocacy agenda with all of our stakeholders.

Unfortunately, too many people across our communities have built homes where they should never have been allowed to build. At the same time, as a society, we haven't invested enough in resilience and mitigation projects that reduce risk. As I've said many, many times, we know the best way to reduce the premiums we all pay is to reduce the risk of a claim in the first place. And that's a key element of the advocacy agenda that we at Suncorp take to all levels of the government and consistently take to all levels of government.

So turning now to our FY '25 financial performance. As you can see on the screen, Suncorp has delivered a net profit after tax of $1.8 billion. This was supported by one-off profits from the sale of Suncorp Bank and the New Zealand Life of $252 million and $99 million, respectively. Cash earnings were almost $1.5 billion. They benefited from higher net investment income of around $760 million and supported by natural hazard claims cost, which came in, as Christine mentioned, $205 million below our allowance for the year.

Our general insurance underlying insurance trading ratio is the fundamental core measure of success in an insurance business. That ratio was 11.9%, which is right at the top of our target range, and that reflects our strong operational performance.

Now on the bottom of the graph there on the slide, you can see our Australia and New Zealand business has performed strongly, achieving top line growth across all of our portfolios. Gross written premium for general insurance increased by 6.3% over the year, and that underscores the strength of our brands and the quality of our products and what has become and continues to be a highly competitive market.

More favorable reinsurance conditions allowed us to successfully place our reinsurance program for the financial year that we're now in FY '26 at a reduced cost and with improved outcomes for both us, our shareholders and also our customers. And we're pleased that our strong capital position has enabled us the flexibility to commence soon after this AGM an on-market share buyback of up to $400 million, and that will continue through to the end of the financial year.

Suncorp's performance this year demonstrates the strength and resilience of our business, built through a dedicated focus and targeted programs over more than 5 years, and we've talked to you about them every year. Our aim 5 or 6 years ago was to create a simplified, resilient and growing Suncorp that delivers value for our customers, for the communities we serve and the shareholders such as many of you in the room today. The slide here displays a summary of our progress against these objectives over this time.

Now with the sale of the bank and most recently, Asteron Life in New Zealand, we have completed that simplification journey. We have built significant resilience into our financial metrics, and we now are consistently delivering margin outcomes to the top of our guidance range. Alongside that, we've invested strongly in data, pricing and claim systems and an improved digital offering through automation and targeted AI deployment. More than 78% of our customers are now purchasing their products digitally, which is up from 54% 5 years ago, while almost 60% are servicing both their claims and their policies via digital channels.

The strong platform that we've built and our track record of delivering on our commitments has provided us with the opportunity to now accelerate our ambition and to invest in our business but without compromising margins and importantly, shareholder returns.

Our investors focused on further modernizing our platforms and advancing our deployment of technologies such as AI, but at scale to transform our operations and to create seamless end-to-end digital experiences and importantly, more personalized products.

We will continue to invest in our suite of respected brands. We'll continue to invest in the capability of our people. We will include dedicated reskilling programs to support them as the world of work continues to evolve.

We know that building greater efficiency, effectiveness into the way we do things at Suncorp will have the dual effect of delivering better customer outcomes and a greater ability to tackle the complex challenges that are faced around insurance affordability. Our achievements this year are a testament to the commitment of our people, the loyalty of our customers and the support of you, our shareholders.

So in closing, I'd like to say thank you to our Suncorp teams, to our customers and to our partners. I also thank and acknowledge our outgoing Chairman, Christine, for her significant contribution to Suncorp over the past decade, but particularly her outstanding leadership as Chairman over the past 7 years. Those 7 years have included some periods of great uncertainty, but her tireless efforts and her commitment to continually raise the bar and to create value for all of our stakeholders has been evident throughout her tenure. She's been a great support to me personally and to the members of my executive team. But more importantly, she has cared for and shown great interest in every member of the Suncorp team.

Christine leaves Suncorp in a very strong position, and we all wish her well in the future. Also I congratulate Duncan on his appointment as Christine's successor and I and the whole team look forward to working with him as we continue our journey as a pure-play insurance company.

With that, I thank you for your continued confidence and support in Suncorp, and I'll hand now back to Christine.

Thank you, Steve. And now to the full part of the meeting. For those of you who were here 6 years ago when I made the mistake of standing for the Q&A session, I almost collapsed by the end. So if you're comfortable, Belinda and I will remain seated while we work through the Q&As.

All resolutions for consideration today will be put to a poll, which I now declare open. As I mentioned earlier, the direct and proxy votes that have been received prior to the AGM were released on the ASX platform this morning and will be shown on the screen before we vote on each resolution. I would just like to update you also on the number of people participating. I'm advised that we now have 475 shareholders participating online and around 220 in person. So I think that reinforces the case for hybrid meetings.

As set out in the notice of meeting, I intend to vote all undirected proxies held by me as Chairman of the meeting in favor of each resolution. The first item of business today is to receive and consider the financial report, directors' report and auditors' report for the Suncorp Group Limited and its controlled entities for the year ended 30 June 2025.

Representatives from KPMG, Suncorp's external auditor, are joining us here in Brisbane today. Scott Guse, on my left, on your right, who is a lead partner for the financial year '25 audit and David Kells, also on your right, who will be lead partner, audit partner commencing from this financial year. And Scott and David are available to answer any questions you may have about the auditors' report or the conduct of the audit.

And Scott, on behalf of the Board and Suncorp, you have our thanks, for the professionalism and commitment with which you've undertaken your Suncorp audit role. And we wish you well in your new role, and we welcome David.

I will now address questions and comments about the reports or Suncorp's performance generally. As Belinda mentioned earlier, I will first address a number of relevant questions received from shareholders prior to the meeting.

In the meantime, if you are here in Brisbane and wish to ask a question about these matters, please move to your nearest microphone. Microphone 1 is on straight on my left, your right, where Rupel will -- or Louisa will assist you. And if you are participating online, please submit your questions or comments now or register your question via the phone line. We've also got a second microphone. I'm sorry, over here on my right where Louisa will be. Sorry, Louisa.

Belinda, could you please read our first pre-submitted shareholder question?

Thank you, Chairman. Shareholder, Mr. Stuart Campbell asks what insurance businesses have been sold or disposed of by Suncorp over the last 15 years? And what insurance businesses are now transacted by Suncorp?

Thank you, Mr. Campbell. And those in the room would have seen this slide that Steve showed before about the transformation journey, which I think tells a very big story. Suncorp has recently undertaken a portfolio review, which led to Suncorp selling some of our businesses to simplify our operations and sharpen our focus on core insurance activities. Suncorp's simplification program has been a key focus, particularly over the last 7 years. However, as per your question, over the past 15 years, this includes the sale of New Zealand Life insurance business, Asteron Life to Resolution Life, which was finalized in 2025, the sale of Suncorp Bank to ANZ completed in July 2024, divestment of our Wealth business in 2022, exit from the RACTI joint venture in 2021, cessation of the underwriting and selling of travel insurance in February 2021, divestment of the Capital SMART Cash Repair and ACM Parts businesses in 2019, the sale of Resilient distribution businesses in 2019, the sale of our Australian Life insurance business in 2018. Now you can see why the Audit Committee Chair role is so important.

These divestments reflect Suncorp's strategic intent to streamline our portfolios and concentrate on the general insurance business. Today, Suncorp operates as a pure-play general insurer with a strong presence across Australia and New Zealand.

Our business is structured around 5 key portfolios, home, motor, commercial, personal injury and New Zealand. And as I mentioned in my opening address, Suncorp operates well-known brands that include AAMI, APIA and Shannons in Australia as well as Vero in New Zealand.

Is there another question, please pre-submitted Belinda?

Thank you, Chairman. We have received a question from shareholder, Mr. Nick Wickham, who asks why did the company wait so long to return the bank sell capital to shareholders? How much interest was earned on those billions during the period? It was not returned to shareholders. Thank you.

Thank you, Mr. Wickham. As mentioned in my address, the sale of Suncorp Bank was completed on 31 July 2024 following the receipt of several regulatory and legislative approvals. However, after completion, a number of key steps were required before the capital return could proceed. And this included seeking shareholder approval at last year's Annual General Meeting, which was held in October of last year, and I see many familiar faces here from that meeting. Finalizing the completion accounts with ANZ which determined the final sale proceeds, obtaining a draft class ruling from the Australian Taxation Office to confirm the tax outcomes, obtaining APRA approval. And as most of you know, APRA is our prudential regulator and then the Board making a final determination to proceed with the return of capital.

So when we assess the net proceeds from the transaction, the interest earned on the surplus capital was considered in arriving at the $4.1 billion, which was returned to shareholders in March 2025, through a $3 per share capital return payment and a $0.22 special dividend payments.

Next question, please, Belinda.

Thank you, Chairman. Next question is from shareholder, Mr. Lachlan Wells, who asks, according to Suncorp's Climate Disclosure report, the company's climate plan is based on leading frameworks from the net zero asset owner alliance and Climate Action 100. However, Suncorp is not a signatory either of these frameworks. Can investors rely on you to meet these standards? Or should we assume that you will not, given the lack of formal commitment?

Thank you, Mr. Wells. Aspects of our climate transition commitments are guided by the globally recognized external target setting frameworks such as the science-based targets initiative and the Net-Zero Asset Owner Alliance, where guidance has been used, it's been explicitly and transparently stated in our climate disclosures. For business reasons, we've made a strategic decision not to pursue formal membership or endorsement by these organizations at this time.

To provide confidence in the integrity and robustness of our climate-rated metrics, we engage independent assurance firms to assess our selected metrics. And I can assure you that Suncorp is deeply committed to climate action, and we welcome the National Climate Risk Assessment 2025 that was released earlier this month.

Suncorp is now preparing itself for mandatory climate reporting next year. And under the mandatory reporting requirements, the contents that we are subject to limited in -- all of the contents to be subject to limited assurance, and that will expand to include governance and aspects of our climate-related strategy to reinforce the confidence in quality and accuracy of our climate reporting.

Are there any more questions pre-submitted, Belinda?

[indiscernible]. Sorry for the interruption.

No, no. Thanks for letting me know.

Thank you, Chairman. There are indeed additional questions, and there are 4 that have been submitted by a shareholder, Ms. Natasha Lee. The first question is, while there has been a lot of investment in AI technology and upgrading of staff skills in AI, what safeguards have been put in place to guide against bias, AI hallucinations and other issues that can arise from using AI?

Thank you, Ms. Lee. We had a Board meeting yesterday, and this is a topic we discussed a lot. For the benefit of shareholders present today, our investment in artificial intelligence, or AI, is seen as a significant enabler to Suncorp's strategy. It's my personal belief that we all need to educate ourselves and better understand AI.

At Suncorp, we provided employees with a number of educational offerings and upskilling programs and this will be an ongoing journey, as AI continues to evolve rapidly. Suncorp's risk appetite statement specifically requires that all material models, including artificial intelligence be designed in an ethical manner in alignment with Suncorp's data ethic commitments, which are aligned with Australia's AI ethics principles. These data ethics commitments include reliability, safety and fairness, which incorporates the risk of bias, AI hallucinations and other issues that can arise from using AI.

Suncorp has operationalized our data ethics commitments using a specialist AI risk and control library, which is applied to all material AI use cases. Some of the specific AI controls being implemented include comprehensive testing, preventative and detective monitoring by our people and independent AI models, former model reviews and use the feedback mechanisms.

We continue to invest in developing our AI governance and risk management capabilities, and it's important we continue to be at the forefront of managing any new risks associated with AI.

Next question, please, Belinda.

Thank you, Chairman. Ms. Lee's next question is, while we have reported increases in customers using conversational AI, how has the experience been for those whose language is not English or Australian for that matter?

Thank you again, Ms. Lee. Like most large organizations, Suncorp is experiencing a growing demand from multilingual -- for multilingual support from our customers, and the rapid growth of powerful generative AI technologies has really improved how we can communicate with our customers, and we are continuing to explore opportunities to further assist our customers from non-English-speaking backgrounds to transact with us. For example, we're expanding our chatbot capabilities through Bingle Buddy, which will soon support 8 of the most spoken languages in Australia. And this enhancement will allow customers to interact in their preferred language while receiving responses in English. Personally, I find this very exciting and it's also a passion project for Director Tanner, on your right, my left. We're fast reaching a point where we'll be able to converse with our customers in any language, which is just wonderful. Next question, please, Belinda.

Thank you, Chairman. Ms. Lee's next question is, while investment income has increased, this has largely come from interest earnings and net gains on financial instruments. However, given the interest rates are being cut, this result will be difficult to sustain, especially if there's a bad weather event. Are there strategies in place to maintain good interest rate returns in this market.

Thank you again, Ms. Lee. We do have a clear strategy in place that balances risk and returns appropriately considering both the needs of our policyholders and our shareholders. While declining interest rates impact interest income, obviously, we can maintain an appropriate interest income by diversifying into other asset classes. And we do this carefully by carefully evaluating the potential benefits, the market risks and the capital considerations. And we also assess our asset allocation and identify opportunities that offer strong risk and return rewards to maximize returns with our well-defined risk appetite. Next question, Belinda.

Thank you, Chairman. Shareholder, Mr. Stuart Campbell asks, what insurance businesses -- I'm sorry, that one was already asked and answered, I apologize. Ms. Lee's final general question is, on know our dividend and trust income is flat to $57 million, but your equity holdings increased from $701 million to $932 million, while Unit Trusts have decreased slightly. Can you advise why that dividend income was flat?

Thank you again, Ms. Lee. Dividends and unit trust distributions can fluctuate depending on the earnings and dividend policies of the underlying companies that Suncorp hold its investment portfolios in, and increases in equity values driven by capital gains will not necessarily lead to higher dividend distributions. And it's important to consider both dividend income and capital appreciation when assessing the return on equities. However, what is clear is that the equity returns were strong for the financial year '25 with our equity exposures delivering above benchmark performance. Are there any questions received prior to the meeting, Belinda?

Thank you, Chairman. That concludes the general questions received in advance, and we can now move to questions in the room.

The waiting shareholders.

Shareholders, please hold any questions relating to specific resolutions until the time those resolutions are considered. And please let the team member at the microphone know who you are, so that they can introduce you to the meeting.

Chairman, may I please introduce John Whittington, ASA, who is a proxy shareholder.

Welcome, Mr. Whittington. You're very fast out of the seat there.

Good morning, Madam Chair. My name is John Whittington, and I'm a volunteer for the Australian Shareholders' Association. Today, we hold proxies from 191 ASA members and non-members for over 0.75 million Suncorp shares. Our thanks go to you, the Board and all Suncorp employees for producing such a strong result.

I'd also like to take the opportunity to thank you, Madam Chair, for your considerable commitment and achievements over the past decade as Chair and director of the company and wish you all the best for your post Suncorp future.

Thank you.

I've got two questions here, one at a time or both together?

One at a time might be better for the people in the room, I think.

Okay. Madam Chair, on Page 9 and 13 of the annual report, it indicates that the natural hazard cost of $1.355 million -- sorry, $1.355 billion with $205 million below the annual allowance of $1,560 million. And that adds a lot to the bottom line. Was this due to specific industry -- specific initiatives undertaken by Suncorp or natural year-on-year variation? And how sustainable are those outcomes in future years?

Thanks. Mr. Whittington. Which page were you referring to in the annual report?

Page 9 and 13.

Page 9 and 13. I think I made some comments in my opening remarks as did Steve, but I might get Steve to speak to the annual report.

Thank you, Mr. Wittington. And obviously, the favorability to the natural hazard allowance in the financial year does flow through to the bottom line. I would like to point that over the past 5 years or so, we have significantly increased that allowance, and that's a reflection of both severity of weather and events and frequency of weather and events. I think everyone in the room here would have heard and experienced some of that.

One of the other elements that has supported that actual outcome in FY '25 has been the cyclone reinsurance pool. So obviously, we had the Cyclone Alfred event and about 3 or 4 years ago, the federal government created the cyclone reinsurance pool that all the insurers contribute into and all the policyholders contribute into. And so that obviously took a fair element of the financial cost to the Cyclone Alfred event, bearing in mind that we still hold the operational accountability of managing around about 35,000 claims. So it's a very big operational load that the organization is carrying at the moment.

In terms of the future in the hands of the gods to some extent, I would call to the point that the favorable reinsurance renewal that we just completed, we have taken the opportunity to further increase that allowance, build more resilience into it, prepare ourselves, obviously, in a world where these events are increasing so that we can absorb the financial cost within the allowance not exceed the allowance at the expense of our shareholders. So very hard to predict what FY '26 is going to be in the future. But the overarching point to make is that the resilience that's built into that allowance now is significantly greater than it was 5 years ago. And we think it puts us in a good position to be able to deal with any of the elements of weather and natural hazard events into the future.

Your second question, Mr. Whittington.

Madam Chair, your report acknowledges the ongoing affordability challenge of insurance. The insurance industry as a whole has a reputation for charging loyalty premiums where loyal retail customers have created much higher prices than new customers. Not only does this make affordability worse, it creates extra customer service and churn costs and is likely to reduce Net Promoter Score, one of your key performance metrics. What is Suncorp doing to eliminate loyalty premiums across the industry?

I'd just like to make a couple of comments in the first instance just around affordability because it is such an important topic, and Steve might wish to add, but we absolutely recognize the cost pressures that households continue to experience, and we really are committed to tackling the drivers that put pressure on insurance premiums. And I think the investment we referenced before that we'll be making in technology and using artificial intelligence can reduce our own costs and improve our overall customer satisfaction.

But there's definitely a need, as I mentioned in my opening remarks, for investment by this country in mitigation projects just to better mitigate the risk for communities, and that includes incentivizing customers to protect their own homes, their own home resilience. Certainly, better land use planning. As I mentioned in my opening remarks, counsel is really on that. And really also lowering taxes, I have a slide, which is one of my favorite slides, which I'll show later, which basically shows -- well, it's up now, the impost of state and territory taxes on insurance premiums. All of these issues have to be addressed if we're really going to tackle the affordability challenge. Do you want to add anything, Steve?

I think the only other point to make, Mr. Wittington is that the fundamental tool of pricing and insurance is risk. And as insurance companies here in Australia, Suncorp particularly and around the world become more granular in the way that they can price, we are able now to identify a number of different payrolls that go into a home insurance medium for example. So obviously, flood risk is one of those, various working claim perils like burglary and other risks, but we can model very clearly now the impact on an insurance premium of natural hazard costs. And obviously, those people who, as I made the point in my address, who are unfortunate enough to have built or bought in areas that they should never have been a layer to have built or bought in areas that should never been allowed to build the volume dealing with some of the impacts of that high peril regime that flows obviously through the premium. Additional point I'd make on top of that is that the taxation system that we have around insurance means that those higher-risk -- unfortunate higher-risk customers pay more tax.

So on top of the home insurance premium is a GST on to the GST and the home insurance premium stamp duty and in New South Wales in particular on top of the home insurance premium with the GST and the stamp duty is a levy, emergency services levy. And so we've consistently, as an industry, been making the point that it is regressive to be imposing taxes of this nature on home insurance and to reform the tax system would be a fantastic initiative for improving affordability of insurance right across the board.

And just -- also just circling back, we do not offer a loyalty discount program.

You do not offer it.

Sorry, loyalty discount.

Loyalty tax.

Loyalty discounts or loyalty premiums because that's the thing that really upsets customers is where they quoted at a high price, where if they just came in as a new customer, they get a substantially lower price. And that's the question -- that's the fundamental part of the question I was asking, which I don't think has really been answered yet.

We will make the point. We do not offer -- we don't provide loyalty tax. The sources of pricing that we attribute to a home insurance premium or any interest premium are the underlying risk factors that emerge in the writing of that policy.

Thank you. We have a question from microphone #1.

Chairman, may I please to introduce Ben Galvan, shareholder from Finance Sector Union.

My name is Ben Galvan from the Finance Sector Union. And I'm here representing our members across Suncorp who are employed by Suncorp.

Suncorp has been a leader in adopting new technologies, including artificial intelligence models. As these tools are introduced, what is the broad goal of AI capability improvements at Suncorp? And in particular, are you going to ensure everyone benefits from these improvements, including your employees?

So including?

Including your employees.

Thanks, Mr. Galvan. And thank you also for your personal constructive engagement through our recent enterprise bargaining process, the team of advisers at the Board meeting.

As you know, artificial intelligence has been around at Suncorp for time because insurance is a data-rich business, and we actually have a very mature set of AI capabilities and indeed, experts in our organization. And we're building and integrating AI use cases across our business. And there's no doubt that it will transform the customer experience because we're getting rid of repetitive tasks for our people. There's still a lot to be worked through in the operational transformation. And there will be potential changes to roles in some circumstances. But it's quite extraordinary how much training Suncorp is all really doing of our general workforce around upskilling and reskilling so that people can actually use these tools in doing their job.

So obviously, we as a Board look closely at the commitment to continuous retraining, reskilling and helping our workforce do that transformation at the same time remaining true to delivering the best outcomes we have. So I'm sure that we'll continue to have this conversation with you as it evolves. And CEO at the recent results presentation did give investors some examples of some of the use cases and early days, but it's looking promising and a good experience for our employees. Thank you, Mr. Galvan. Microphone #2.

Chairman, may I please introduce Rod [indiscernible], who is a shareholder.

I'm pleased you got the ambulance here because I get a bit nervy and I won't stop midstream.

That's all right. You can just take your time. It's fine.

I'd like to compliment the management and the Board for putting forward the return of capital with consolidation because I don't know if you people took into account, but whether you took in account about the cost of living because when I looked at the shareholder here, 83,000 of them are shareholders with less than 1,000. And if we include up to 5,000, that's 130,000 shareholders that much probably could benefit.

The other point I want to point out investment relations can put a face to me now is all the promotion about on-market buyback and even the return of capital we consult, it's based on theoretical. The only guarantee outcome out of those two is the number of shareholders on the registry. The rest, it's basically I'm happy to go with the return of capital with consolidation because it is -- from a risk assessment point of view, but if it doesn't go right, at least all of us benefited in some way.

So -- and what I can see, I'm just a hobbyist investor, not a room serious investor is all the financial metrics that promotes for support for on-market buyback is very similar to what the return of capital consolidation achieved, the way I understand it.

And I'm a bit dubious. I don't know if Investor Relations reported to you about my question since what I'd like to ask you people is from the Board experience, and I imagine you have been in a number of years, with on-market buybacks, who predominantly gets that pool of $400 million -- are likely to get the $400 million. My suspicion is it's probably the big end of tail. Can you confirm that?

Thanks, Mr. [indiscernible]. I'll make a couple of comments, then I can ask the CEO to comment or even the CFO, who's in the front row. So firstly, the Board is really active in looking at how we manage our capital and very disciplined, and we have to be very disciplined because we have to be here for the long term. And the return of capital as a result of the bank sale was considered through the lens of both retail shareholders and institutional shareholders. And we are very mindful of the fact that we have such a significant retail shareholder base well represented here today, including by the Australian Shareholders' Association. And the Board always will have regard to the totality of our shareholder base.

So in the buyback, shares are purchased on market from existing shareholders who choose to sell their shares at the prevailing price. So we don't -- there's no disclosure of the counterparty selling their shares but updated distribution of holdings will be included in our 26th annual report.

Just asking probably a broader experience, just a general remark, who ends up with most of the money in a number of companies or buybacks?

I mean I might just take a step back, and I'll have a shot at this because I was the former CFO and quite excited about this topic. But if we had our druthers, and we had no limitation around franking credits, our disposition would be to return capital through a special dividend. Now obviously, with the sale of the bank and the business now having a significantly higher contribution of its earnings coming out of New Zealand, our ability to generate franking credits has been reduced over the sale process. So we would love to distribute through special dividends. I don't think we want to put at risk at any point, the ordinary dividend being partially franked because I think everyone in this room benefits from the franking credit distribution. So that's the first thing. If we could do it through a special dividend, we would do it.

Undertaking a capital return through an off-market buyback really is not effective anymore and you won't -- you really don't see them in Australia. So you come back to an on-market buyback. Now whoever participates in an on-market buyback, the principles of it are very similar to what we did with the bank sale. In other words, the shares on issue reduce, the returns stay the same and grow, the EPS improves and the return on capital improves. And so while the shareholder doesn't necessarily get in a form of a special dividend, they get it through the capital growth of their ordinary shares.

But you treat that through the return of capital with consolidation, the metrics are pretty similar.

It's a similar principle, but typically, consolidation of shares and that process is a very heavily administrative process and it takes a long time. As you saw in the bank, you have to get the tax office, you have to get other approvals, and that takes some time. So I think -- and we look at all of the options, the principles of a share consolidation and on-market buyback are broadly the same. It's more efficient, faster and easier to do an on-market buyback, and the benefits of it, I believe, whoever participates in it flow through to all of our shareholders.

But I'm trying to get out of your people. Who are the greatest participants in the on-market buyback?

It depends.

Well, it will be the largest shareholders.

And thank you for saying that because a lot of people won't admit it. I've asked them.

Well, I mean, I think that's just the nature of on-market buybacks, but my point is that the share count reduces, the EPS increases, you're benefited.

Because something happened with the return on capital with consolidation. Then the next question I'm going to ask is I've been known to. You might not like this, but I've been known and like I won't say it. So why do the top end of town like on-market buybacks. They seem to be of this -- with AMP and all those places before we get into and even David did -- the top of the town ask you for the on-market buyback or company as a whole consider those on-market buyback.

We don't talk to the top end of town and run the company through the top end of town. The top end of town, as you described it, would prefer a special dividend because they get the franking credits.

I doubt it very much.

No, they do. They like the special dividend. They like the franking credits because they can distribute those franking credits ultimately through to their end custodian through the custodian to the end shareholders. So I think the hierarchy of capital return for all shareholders, irrespective of the big or small is special dividend, fully franked on-market buyback, and obviously, off-market buybacks are not possible, and yes, if you are selling a business off scale and you have a significant capital return like we did with the Australian Life business sale and the bank, then the most efficient way to do that is to go through the longer administrative process with all the authorities and do a share consolidation, which is what we did with those asset sales. But for ongoing capital return. And we are hopeful that the on-market buyback process will be ongoing because we still remain with excess capital after the $400 million that we're proposing in FY '26. And we believe that over time, we will continue to accrete capital into our balance that the on-market buyback is the most efficient and effective way for us to continue to return capital to shareholders.

Thanks, Steve. Thanks, Mr. [indiscernible]. I might allow some other shareholders to ask a question, if that's okay. And I assure you, the CFO will meet you after the meeting and dig further into this. Jeremy, got that? Thanks, Jeremy. Thanks, Mr. [indiscernible].

The next question is from microphone #1, I believe. We'll go with microphone #2.

So Chairman, may I please introduce George Bomber, who's a shareholder.

Welcome, George. It was nice to speak with you earlier this morning.

Madam Chairman, I must say you did a great job over the previous years, and thank you for your services.

Thank you.

I think what the gentleman prior was trying to ascertain was he felt that minority shareholders weren't looked after. If you're doing a share buyback, it's quite possible that you could write to all the shareholders and say we're doing a share buyback at x number of dollars, if you'd like to participate, send the form in, and you can participate in that. And that might solve the problem that gentleman is talking about the minor shareholders not being as well looked after some major shareholders. I just wanted to clarify that point.

My other question was how long does ANZ have to keep the Suncorp name. And if it's a long-term project, maybe we should now be Suncorp insurance. Some of the things that the ANZ Bank have done since they've taken over to the banking haven't been very good for customers. And I think that the association of the 2 names, if they're going to keep it for a long time, should be clarified in that regard.

The other thing you were talking about before was the income that you've got and you -- one of the things that you mentioned was the advantage of capital gains. Now we have a government in Australia that is silly enough to think that they are going to tax unrealized capital gains. And if that's the case, that is going to have a major pullback in your income because you've got less money than working to produce the income because you pay tax on the capital gains and you don't have that money keep growing.

Thanks, George. I'll just make a comment on the brand sharing arrangements. And then Steve, you can talk about taxes. So when we agreed the sale of Suncorp Bank with ANZ, we did agree with a brand-sharing arrangement of the Suncorp brand for a period of up to 5 years. We're now just past 1 year on that brand-sharing arrangement. I can assure you, again, at our Board meeting yesterday, we keep an eagle eye on our brand health and our reputation. And in fact, in our long-term incentives, we have a reputation metric, which needs to be satisfied. So this is something the Board thinks about. But it's certainly not expected to go any longer than 5 years, the brand sharing, may be shorter. And the people responsible for our brand also here today and heard your comments around Suncorp insurance.

Look, I don't think I'll buy into the capital gains. I'm not an expert on capital gains tax necessarily. I am very much focused on tax reform and insurance. GST, as I mentioned, stamp duty and emergency services levies. And I think the only way to really fundamentally reform those taxes and the impact on insurance policies and pricing is to have broad tax reform, and if they have broad tax reform, I can pick that up and they can also pick up your capital gains tax issue.

Can I continue?

I just need to -- I've got someone in the queue, Mr. [indiscernible] from microphone #1. So if you just let Louisa know, she'll put you in the queue. Thanks.

Chairman, may I please introduce Lana [indiscernible], who is a shareholder.

Welcome, Ms. [indiscernible].

My first question -- I have two questions. My first question, impinges on previous speaker. And that is in view of the recent disturbing allegations against ANZ. Have we autonomy to be able to maintain the ethical standards that have been discussed earlier today, especially given we've only got 4 years as us. And after that, we sort of ANZ. Can we go on being ethical in the way we should?

And your second question, I'll take them both at ones if that's okay.

Well, the second question is more about the people aspect of policy. I suspect there are many others like me who are old and who like having people at bank branches. Now we're more and more being steered into using machines, ATMs. And they're all very good and convenient at times, but they can't answer questions. They can't help us sort out a difficult question, for example, what to do about a term deposit. There are various things that machines just can't do. Even AI, let us not forget, is artificial intelligence, and it can't quite rack up with the memory and experience of a banker who has been in the business long enough to remember previous trends, previous outcomes that AI might not be able to compute.

Thank you, Ms. [indiscernible]. In terms of our own operations, I assure you that ethical conduct and imposing -- enforcing our code of conduct is something that the Board and the People Committee looks at regularly. In terms of the bank, the bank is now owned by ANZ, and it's actually not appropriate for me to answer questions that really should be addressed to ANZ as I'm not in their boardroom. But we do have -- Ms. [indiscernible] we have 4 people from ANZ who are outside today. Mr. Bush, Ms. Hasse, Ms. Irving and Mr. McFadden, and they have been asked to join us here today outside to really give shareholders like yourself an opportunity to ask those questions around banking, whether that be the availability of people in branches, how to use technology, et cetera. So I'm going to ask the lady sitting in front of you, [indiscernible] guide you out at the end of the meeting to meet with the ANZ team. Thanks, [indiscernible]. Microphone #2, Louisa.

Chairman, may I please introduce John Whittington, ASA, who is a proxy shareholder.

We haven't got passed the first matter at Mr. Whittington, you're up twice.

Madam Chair I've got two questions for the Chair-Elect. So again, do you want to one at a time or...?

Yes, give us -- I mean, we need to get this meeting done before dinner. So you can give us -- give them to me both, and I'll decide whether or not to give them to the Chair-Elect because I am still the Chair.

Okay. Well, it is -- for Mr. West, one of the basics of retail shareholders is being diluted without combination in capital raisings. Will the Chair-Elect commit to retail shareholders today that if Suncorp was to raise capital during his tenure that the preferred method of capital raising will be a by a renounceable offers such as [indiscernible], such offers as the only that treat retail shareholders fairly and equally?

The second question?

And the second question is, despite our requests over recent years, Suncorp is in the minority of its peers by not providing an AX release between 1 and 2 weeks before all analyst briefings given -- giving retail shareholders the details of how to participate in such briefings and in listen-only mode, and therefore, be on an equal information footing to institutional shareholders. Will Mr. West commit to ensuring retail shareholders are treated equally and such ASX releases are made during his tenure?

Thanks, Mr. Whittington. And just for the benefit of other shareholders in the room, Duncan West and myself did meet with Mr. Whittington and others from the Australian Shareholders' Association Head of this meeting. And we have previously answered this question, but I think Mr. Whittington, Duncan speak very briefly to that, but you do know the answer, sir.

Yes. So to your -- thank you for your questions, and I look forward to many more in the future. On the second question, the answer to that is yes, we will commit to that. On the first question about capital raising, I can't commit to the future approach to capital raisings. Obviously, at the time of any potential capital raising, we will look at all of the factors that are around at that point in time and choose the most appropriate approach depending on the circumstances. Obviously, as a Board, we are, have been and will continue to be very mindful of all shareholder outcomes, including but not limited to the fairness of those outcomes, and I think we have a strong track record, as a Board of taking into account all shareholders, including retail shareholders when making capital decisions.

Thanks, Duncan. Steve, perhaps...

Yes. I just want to make an additional point, and we've talked a lot about capital returns and, now we're talking about potential capital raisings, which figures costs we don't need to do other than for something that we would acquire at some time down the track. But I would make the point that through Christine's tenure, the Chairman's tenure, we were probably one of the very few financial services companies that didn't need to raise capital through COVID. We never diluted our current shareholder base with dilutive capital raisings. And I think that's a very proud statement to make. We were one of the few. So I thought I'd make that point in addition to the discussion on capital returns and raisings.

Thanks, Steve. Thanks, Duncan, and thanks, Mr. Wittington. I might -- doesn't look like we've got more questions in the room on this.

Sorry, we've got a couple more questions. Chairman, may I please introduce Gary Bilby, who's a shareholder.

Thanks, Louisa. Good morning, Mr. Bilby.

Chair, during your presentation, you indicated the focus is going to be on the insurance business. I'm confused because then you sell off the New Zealand Life Insurance. So my question, I've got two questions, this is one of them, is the focus now on insurance business only in Australia? The second question is, I have real concerns concerning about cybersecurity, does Suncorp have insurance if things go pear shape?

Two good questions. Thank you. The first one is, as I mentioned in my opening remarks, we have general insurance businesses in Australia and in New Zealand. We have divested of our life insurance businesses, but we have a range of different insurance. We have our commercial insurance portfolio in Australia, in New Zealand and our personal loans portfolios. And obviously, it includes personal injury insurance, CTP insurance, but we do not have a life insurance business anymore. We -- as part of the simplification program, as Steve put up on his slide, that was definitely a decision by the Board that we would no longer participate.

The second question in relation to cybersecurity. Yes, we do have lines of cyber insurance. But for myself and the Board and certainly the Risk Committee is a far deeper look than just what insurance is available. So we have -- we run a number of different simulations and scenarios during the course of the year with the team to look at our own cyber resilience. We bring external experts into this because this has been a growing phenomenon. As I've said during my tenure, I've seen a tenfold increase in the number of scams and frauds. And cyber criminals are at the forefront of using generative AI and artificial intelligence tools. So this is something we constantly look at. But yes, we do have lines of so overall insurance cover. Thank you.

And we have another question from microphone #2, and then we might go to the next agenda item, I think.

I think we've got two more questions here. Chairman, may I please introduce Rob [indiscernible], who's a shareholder.

Am I committed to continue on the same theme as before?

No, sorry, Mr. [indiscernible] because we've got other people -- we've got a lot of business to get to. And I did say to you that our CFO, Jeremy Robson will talk with you offline at the end of the meeting on that topic. And...

But I'd just like to make one statement. The way I understand here is, I'm trying to make it a clinical, the way I see it, the on-market buyback is basically used in everyone's entitlement theoretically. And the 220, they seem to love it for some reason, this on-market buyback, and then they would claim that what you, as a company, is doing a good job, yet I consider them if you're doing a good job, and they go on the on-market buyback, they basically deserted us. They're deserting the company, which we -- possibly you people are artificially pushing the price up of the share market, the price of Suncorp to the market. I'm staying loyal to you. Why don't I know I can buy, get on market, but don't have faith in the company. But obviously, people who utilize the on-market pace, especially the top 220 and so on, I consider deserting the company.

Okay. Thanks, Mr. [indiscernible], and our CFO, Jeremy Robson, will catch up with you at the end of the meeting. I think the CEO did speak well to that topic.

I'm actually now going to go to online questions. I'm sorry -- I have one more at microphone #1.

And one more, and one more at 2.

At one more microphone #2. Okay. Well, go online while we're waiting for those details.

Thank you, Chairman. We have received some questions online for this item of business. The first question is asked by Mr. Stephen Mayne. The retirement of Christine McLoughlin after today's meeting will mean that the largest 30 companies on the ASX by market capitalization will all be chaired by a man. Having just successfully chaired an ASX 30 company, could Christine, please comment on why Australia has one of the worst records globally in terms of women rising to chair are largest public companies? Also, thank you for pioneering AGM best practice with hybrid meetings, early proxy disclosure and extra voting data. Does Duncan commit to continuing this next year?

Well, I'll take all of that. Thank you. Stephen, I would love to be able to change the world. I'd even love to be able to change something in this country. I can assure you around this Board table, there is a genuine commitment to diversity in the broader sense. And I can hope you can see that from people in front of you today. And I know that the Chair Elect and the Board will continue to have that focus and Steve, in leading his -- building his own team has committed to diversity. Our women in leadership rate is around 49% at the moment.

Thank you for your feedback, and we will certainly continue with the best practice that we've adopted at this meeting. And when I leave this role, I'll see if I can change the world. I've just got a couple of more questions in the room. So I might go back to the room before we finish online. So then we have George again.

Yes, just the final question from this microphone. May I please introduce George [indiscernible], who is a shareholder.

Madam Chairman, thank you. One of the considerations today and you look at the Board in the top 200 companies and most of them have between 5 and 9 members. We have 11 members on the Board here. I think sometimes you've got a -- say, a number of people contributing to the same factors and their knowledge. And I think sometimes a Board of that number starts to become unwieldy, and it makes it harder to operate. And I think that as some of these people retire from the Board, maybe you should consider not replacing them because I think that sometimes a smaller number can work quicker and make decisions better because they're more concise.

The other thing that I'd like to inquire about was recently, Suncorp made -- gave some shares to people that worked in their branches. I would like to know were those shares were acquired? Were they acquired on market? What details were given to the people who received those shares. I spoke to people at my local brands. They had no idea what to do with them. They said, "George, what should I do with them?" I gave them some advice, and I said you can sell them on market, if you like. But I don't know whether they were given a cost base and then if they sold them. If they were given them as a free gift, were they advise that the cost of -- the value of those shares was taxable. Were they given that information that they could include that on their tax return? And so I think that if you're going to give shares to employees that are unfamiliar with shares, you need to be very precise and give them all the information that is required so that they don't finish up getting in strife with the tax department. Thank you.

Thanks, George. I'll speak quickly to Board size and then Belinda, who in her many different roles is also responsible for the people function. So you can perhaps speak to the second question about people in branches who received shares.

In terms of Board size, we remain -- Suncorp remains a highly regulated company post the sale of the bank. And we do look at the size and composition of the Board through the lens of issues we are addressing at any point in time. And there's an incredible pace of change at the moment, as I mentioned in my opening remarks, whether that's technology, cyber resilience, energy transition, geopolitical issues, supply chain, climate. So it's really important that we have a board that is contemporary. And I think what will happen over time is that the Board led by Duncan will continue to address what is the appropriate size, but really, even more importantly, what is the appropriate skill set. And that will include an orderly runoff as directors retire. So we certainly discussed this in the last couple of months as a Board and the entire Board is committed to making sure we have the right skills and the right size. So thank you for asking that question. Belinda, perhaps on the guidance of shares to employees.

Thank you. Firstly, the question, the shares are acquired on market, and I think we've covered how that occurs already. In terms of advice, a generic tax summary is provided to employees at the time. However, we do not provide personal tax advice to any individual employees.

Our CEO will make a couple of comments.

Just to add one point. Isn't it a great thing for all our employees to be shareholders, and I'd like them all to be customers too. And so I take your point for people who are unfamiliar with shareholding, then it can be a bit daunting and there are tools available to them and obviously, advice that they can get. But the concept here is we want all of our share -- all of our employees to be shareholders just like everyone in this room. So that's the goal. This year, we have provided gift shares to our employees. It's around $750 worth of gift shares, and I think overwhelmingly, the team enjoy that, and they like to be linked into the success of the organization, just like all of us in the room here.

Thanks. Thanks, Steve. Thanks.

[indiscernible].

Well, as I mentioned, there's material available for the employees to undertake all of that analysis with their tax returns.

I think we'll keep moving, if that's okay. We've got another question in the room, and then I'm going to go online.

Chairman, may I please introduce Clyde Ashton with a shareholder.

I noted the financial returns suggestion to the Nomination Committee. Due to its important role in relation to the Board, can you please advise the make up of the this committee?

The Nomination Committee at Suncorp is the entire Board. So I chair the Board and I chair the Nominations Committee, but in the context of chair succession, Lindsay Tanner has took the role of independent director, and he led the chair succession process, which is another part of the role of the Nominations Committee. Thank you for the question.

I'll just go back online. I think we have another question online.

We do. Thank you, Chairman. We have another question from Mr. Stephen Mayne, who asks, how long has KPMG been our external auditor? When did their last phase to full competitive tender? And how many competitive tenders run during Christine's time on the Board? When is the external audit next scheduled to be tendered?

Thanks, Mr. Mayne. We can't comment on when the next audit tender will be, but the Board is committed to regularly reviewing the quality and independence of our external audit arrangement. That's just part of good governance. Obviously, when we do go through a process, I won't be chairing the Board, but that will be advised in the appropriate way, shareholders will be informed.

KPMG were first appointed as Suncorp auditors in 1996. The last competitive tender was held in 2017, '18, and I was on the Board, and that information is publicly available. And that is the only competitive tender during my tenure on the Board. But KPMG importantly does have a partner rotation policy, and that does require the signing and engagement partners who change every 5 years in accordance with the Corporations Act. And as I mentioned earlier today, Scott Guse is retiring as he has reached his tenure, and David Kells will be taking his place as the lead partner. Another question online?

Thank you, Chairman. Mr. Mayne asks another question. What process did we run to select Duncan West as our next Chair? Was a headhunting them involved? And did we interview any external candidates? Were multiple internal candidates competing for the physician with a formal pitch and vote or was this a long-term succession plan which was only subject to Duncan winning the trust of his colleagues since joining the Board 4 years ago? Was it recruited at the time as a potential future Chair?

Thank you, Mr. Mayne. So for all new Director appointments, we do have an external search process using an external firm, and we do have searches in the market at the moment. However, before the Board succession, as I mentioned earlier, Director Tanner led a process and one of the first questions that was put to the Board was whether it was appropriate to go externally as well as internally. And the unanimous view of the Board was that it is preferable to have an internal candidate. If we had people who would be willing to take on the role, they're not easy roles and they're quite demanding. And we were fortunate in that we did have people around the Board table who more than able to chair this company.

Duncan was unanimously identified by his colleagues as the preferred or an outstanding candidate. He did not say that about himself, obviously. And there was then a process which -- with the Board when Duncan addressed the Board about how he would take on the stewardship role and his beliefs around the future strategy for the company and other matters that one would expect to Chairman Elect to turn them on to. Lindsay, do you want to add anything? No. So it was very much conducted in a robust way, Mr. Mayne.

Thank you, Chairman. That appears to conclude the questions received via the online platform. And I can confirm that there were no questions received on the phone lines.

Thank you, Belinda. For the information of everyone participating, I can update you that we now have a total of 526 shareholders, proxyholders and other attendees joining the meeting must be selling tickets, and they're not getting sandwiches if they're coming in online. So having now addressed general questions and comments, we'll move to two remuneration-related items of business.

If you're here with us in Brisbane and you'd like to ask a question on these resolutions, please move to a microphone now. First, I'd like to introduce the advisory vote on the financial year '25 remuneration report, which all shareholders have had the opportunity to review. Your Board believes the remuneration arrangements, as outlined in the remuneration report are strategically aligned and drive high performance. The Board also believes it's awarded fair and reasonable incentive outcomes to the CEO and executive leadership team, having regard to the overall performance of Suncorp.

In setting our remuneration arrangements, we have a program of active engagement with institutional investors, proxy advisers and the Australian Shareholders' Association who are here today. And we also take into account informative feedback from shareholders more generally. We note that each director has a personal interest in their own remuneration from the company, as described in the remuneration report and the Board recommends shareholders vote in favor of this resolution.

I'm now going to put up on the screen, direct -- details of direct votes and proxies lodged prior to the AGM. People in the room should be able to see that, please? Belinda, are there any remuneration questions we received in advance of the meeting.

Thank you, Chairman. Yes, we have received a question from shareholder, Mr. Stuart Campbell, who asks, given the reduction in activities now transacted by Suncorp following the sale of the Banking and Life businesses, how does the Board support the level of remuneration paid the CEO given the reduced level of responsibility?

Thank you, Mr. Campbell. CEO roles in companies that are the size of Suncorp require an incredibly significant commitment. And the complexity of CEO roles has also increased more generally driven by the factors that was mentioned earlier today, economic pressures, technological disruption. And our CEO's remuneration is externally benchmarked each year to ensure that it's reasonable and competitive. Our People and Remuneration Committee, chaired by Sylvia Falzon on your right, determines the CEO's remuneration, having regard to the CEO's accountabilities and performance. And that Suncorp remains a large ASX-listed, highly-regulated organization. In fact, this year, we became subject to the financial accountability regime for our insurance business.

For the financial year '26, the CEO received no increase in fixed pay and there was no change to his target short-term incentive or long-term incentive opportunity. The CEO's maximum short-term incentive was adjusted to reflect maximum potential, what was happening at other companies post the introduction of CPS 511 and to drive -- further drive performance noting that any STI award above target will only be realized if the CEO outperforms challenging STI measures. Because of the application of CPS 511, which is a regulatory guidance note issued by APRA, 60% of any STI earned above target will be deferred over a 4- to 6-year period. Next question please, Belinda.

Thank you, Chairman. That concludes the questions received in advance for this item of business and we can now move to questions in the room.

Thank you. I think, Louisa, you have a question at microphone #2.

Yes. Chairman, may I please introduce John Wittington ASA, who is a proxy shareholder.

Madam Chair, it's John Wittington for the Shareholders' Association. As in previous years, the report is one of the better I have read and to a large degree, communicates the structure and outcome very well, uses good graphics and doesn't take interminable internal number of pages on unnecessary detail. We also commend you for this year, providing the history of short- and long-term incentive payout percentages on Page 64, as this is very helpful to retail shareholders to determine whether you're an easy or a hard marker. Well done to all of those involved.

I just want to pick up slightly on your last response. Last year, as part of APRA requirements, you reduced the CEO's short-term incentive from 150% of fixed pay to 100%. But at the same time, you offset it by increasing his long-term incentive from 100% of fixed pay to 150%. So even result. Next year, you'll be increasing, as you mentioned, the short-term incentive to 125% maximum.

Maximum opportunity.

But there is no offset reduction in the long-term incentive. This means that the CEO is getting a potential 25% pay increase. And I can understand your relativeness to the other, but that's a pretty substantial pay upside. What justified that?

Thanks, Mr. Whittington. And again, we did have the benefit of meeting with you and your colleagues ahead of the meeting. But for other shareholders, last year, when the CPS 511 requirements had to be met dictated by APRA, our regulator, we, like other companies, were looking at what we would need to do to our remuneration structure to enable us to comply with that. And there is a significant deferral component required in total remuneration to satisfy CPS 511.

We spun the pendulum, I think, a bit too far in relation to STI target and maximum and the feedback we got from certainly institutional shareholders and yourselves after that was where was the incentive for the upside. And so the People and Remuneration Committee, and I'll give Sylvia a chance to comment, did consider this and believe it's in the best interest of shareholders and fair given where our peers are to create a maximum STI opportunity of up to 125%, but target will remain at 100%. Sylvia, did you want to add anything? I probably said it all.

Thank you for the question. And to Christine's point, when we engaged with various shareholders, this was a question that they asked us, and in particular, when you look at the executive team that report through to Steve, their maximum potential is at 150. So the question was, will you have a CEO whose maximum potential is at 100, that it didn't seem that it was aligned in terms of outperformance.

So to Christine's point, we did overreach in making that decision in the first year, we had the benefit of also seeing what other organizations have done. And in relation to that, we were reflected on what is more appropriate and fair in terms of the remuneration arrangements for the CEO, hence the change.

Thanks, Sylvia. And also, Mr. Whittington, your comments on the quality of the Remuneration Report. Sylvia as Chair of the People and Remuneration Committee has been committed to that. So that was welcome feedback. Thank you.

Other questions in the room in relation to the Remuneration Report? We'll go on -- yes, Mr. [indiscernible]. You need to use the microphone. Is it in relation to the Remuneration Report?

Yes. I just going back to return of capital, which are obviously adjust some of the metrics? How do you compensate that took -- taken out of the remuneration part? Did I make myself clear or mumbling? What I'm trying to say is if we go by EPS, it would push it up and people use that to advantage their remuneration, how do you compensate for the effect it would have towards a remuneration?

We take account when we're setting our targets of what our capital strategies are. And you'll recall when we were selling the bank, we actually changed the metrics to...

It doesn't have any impact.

There's no impact.

There's no impact.

The capital had no impact on deciding what to reward Steve.

Right. Okay. I'm now going to go online.

Thank you, Chairman. We can confirm there are no questions on the phone lines, but we will have received some questions online, and we will now go there. We have received the first question from shareholder Louis Gomez, regarding remuneration question one. He asks, with regard to the STI metric cash return on tangible equity, why are the targets not released in advance? Most other companies of similar metrics do release their targets. Sun has only one serious competitor, which has its own metrics. This information is hardly commercially sensitive, and after releasing these targets, prevents shareholders from assessing progress in this metric and limits transparency in the assessment of this metric. Thank you.

Thank you, Mr. Gomez. We actually do believe this is commercially sensitive because it's a target that's set for something that's to occur 3 years out. And there's certainly sensitivity around actual and stretch targets. The threshold and stretch for the LTI having -- determined having regard for the 3-year business plan, cost of capital and investor expectations. And we do have a view that we will retrospectively disclose. And so you'll see what it was we set after the event, but we've taken the decision as a Board not to prospectively disclose. Other questions online?

That appears to complete the questions that we have received online.

As that addresses all the questions and comments on the remuneration report. I think, Sylvia, again, for your hard work in chairing that committee and producing that report. Would you please now vote using the voting card in the online portal, the Vote+ app or your paper voting card. If anyone needs any help with us, just put your hand up, we've got people here from the registry that can help you. There's one down here.

Details of direct votes and proxies lodged prior to the AGM in relation to this resolution are again on the screen. Taking into account the direct and proxy votes shown on the screen and the total number of shares being voted today, it appears resolution 1 will be passed.

I thank Sylvia for all of your efforts in the report. And now I'm going to go on to the next item of business, which is to seek shareholder approval for the grant of 149,024 performance rights to your CEO and Managing Director, Steve Johnston.

These performance rights will represent the CEO's long-term incentive remuneration for the financial year '26. The purpose of the long-term incentive allocation is to focus your CEO on Suncorp's long-term business strategy, align his interest with those of shareholders and support the creation of long-term shareholder value. As I mentioned earlier, CPS 511 requires long-term incentives to have both financial and nonfinancial measures. And as set out in the Notice of Meeting, Suncorp's performance measures are based on relative total shareholder return, cash return on tangible equity, relative customer Net Promoter Score, and relative trust and reputation. Further details are included in the Notice of Meeting, and the Board with Steve Johnston abstaining, recommends shareholders vote in favor of this resolution.

[Voting]

I'll now put up the details of direct votes and proxies lodged prior to the AGM in relation to this resolution and now on the screen. Would any shareholder here in Brisbane, who wishes to ask a question on this resolution. Now move to the nearest microphone. I don't think we have any questions in the room. So we'll see if there are any questions online on this matter.

Chairman, I can confirm there are no online or phone questions for this item of business.

Thank you. So given there are no questions on this resolution, we will now confirm that we can vote. So you have your voting cards. In the online portal, the Vote+ app or your paper voting guard. And as I mentioned, details of the direct votes and proxies lodged prior to the AGM in relation to this resolution are again shown on the screen.

Taking into account the direct and proxy votes on the screen, our total number of shares being voted today, it appears that resolution 2 will be passed.

The next 3 items of business are to consider the election and reelection of 3 members of your Board. If you're in the room and would like to ask a question on any of these items, please move to your nearest microphone.

First, as I mentioned earlier, David Whiteing seeks confirmation of his appointment to the Board through seeking election by shareholders today. To add to my earlier comments, David's technology-related experience is relevant for Suncorp's next chapter as a dedicated general insurer, enabled by significant technology investments and a major transformation program.

In addition, David's perspectives in relation to increasingly important matters such as cyber risk and data security, complement the existing skills of the Board. This includes helping Suncorp to respond to the requirements of CPS 230, another APRA regulatory guideline, as they relate to managing operational risks arising from Suncorp's outsourcing and supplier arrangements as well as David's strong connections to global technology providers. Additional detail is set out in the Notice of Meeting, including that the Board satisfied that David is an independent Non-Executive Director and we fully support his election today.

I'd now like to introduce David to speak further about his experience and commitment to Suncorp before inviting any questions on your election. Thanks, David.

Thank you, Chairman, and good afternoon, shareholders. This is my first Suncorp AGM, and I'm honored to be here seeking election to the Suncorp Group Board. It is an exciting time to be joining the company, particularly as we embark on this new chapter as a stand-alone trans-Tasman general insurer. Since joining the Board in February, I've been incredibly impressed by the way in which Suncorp has approached and prepared for this period of significant change.

During this time, I've also been able to contribute to the Board's consideration of the full set of capabilities required to successfully make its transition to be as prepared as possible for the future that will continue to be up by rapid change and uncertainty and to realize Suncorp's full growth potential.

I believe my experience gained over more than 30 years leading complex business and technology across multiple geographies and industry sectors, including financial services positions me well to deliver ongoing value to the Board and Suncorp's strategic direction, which is underpinned by key technology investments.

The global nature of my experience also allows me to bring diverse insights on emerging innovations in other markets and perspectives relevant to Suncorp's strategy and ambition. I have a strong understanding of the regulatory landscape and the constraints and challenges of the dynamic environment in which we operate. I take great pride in my forward-thinking leadership approach and ability to flex and adapt on any given agenda as required.

Given the pace of change we are dealing with, my expertise in large-scale business and technology transformation provides me a strong grounding on how technology can accelerate and underwrite strategic intent. And I believe my exposure to important matters such as cyber risk and data security, brings additional value to your board.

Finally, my holistic systems thinking approach that considers people, culture, policy and process continues to serve me well and underpins my strong track record in responsible decision making and governance. I believe that if reelected, these complementary skills and experience will assist the Board in providing effective oversight of Suncorp's growth aspirations in such a rapidly evolving landscape, and I trust I will have your support from my nomination to the Board. Thank you.

Details of direct votes and proxies lodged prior to the AGM in relation to David's election now appear on the screen. Belinda, did we have any questions received in advance related to David's reelection?

Thank you, Chairman. We have received a question in advance from a shareholder, Ms. Natasha Lee, who asks, while you have almost achieved your target of 40% women on the board, Overall, the Board seems lacking in other forms of diversity, and the focus should be not only on women on the Board, but having a board that better reflects the diversity of the community. Will the Board commit to ensuring greater diversity on Board?

Thank you, Ms. Lee. I think you can see that we have a track record of commitment to diversity. So perhaps given that I'm vacating the chair, I might give the incoming Chairman, Duncan West, an opportunity to comment on this. Your personal commitments.

Thanks, Christine. Certainly, I and the Board acknowledge that diversity extends beyond gender and includes a broad spectrum of attributes such as cultural background, age, and professional experience. Suncorp has a strong and long-standing commitment to diversity and inclusion, both at Board level and across the organization, and this is something I am committed to too. While gender balance remains a key focus reflected in our current female representative -- representation on the board and in senior leadership roles, we also recognize the importance of broader diversity in shaping effective governance and decision-making.

Board renewal, as we've mentioned earlier, is an ongoing process, and the appointment of future directors requires consideration of a range of factors to ensure that the collective composition of the Board is balanced with appropriate skills to effectively govern management's execution of Suncorp's strategic priorities.

Thanks, Duncan. Next question, please, Belinda.

Thank you, Chairman. Shareholder, Mr. Stuart Campbell asks, given the reduction in activities now transacted by Suncorp following the sale of the Banking and Life businesses, how does the Board support the current level of Board members and substantiate the increased quantum if director's fees being paid. Surely reduced size business requires less oversight and governance.

Thanks, Mr. Campbell. I think I did address this question earlier, but just to reconfirm that Suncorp has undergone a significant transformation journey over the past 5 years. But the environment we continue to operate in has significantly grown in complexity, from both an operating and a regulatory perspective. And this has added to the Board's workload despite the divestments that yesterday, I chaired my 112th Board meeting of Suncorp. So in addition to the introduction of the financial accountability regime, which comes with an increase in personal accountability on directors in financial services, there are challenges in attracting suitably qualified directors into the financial services industry.

So we must remain competitive on our fees. But I will highlight that our directors fees have remained unchanged since 2016, apart from the legislated increases in superannuation, although we did seek an increase in the potential fee pool last year so that we could facilitate an orderly renewal. When we look at Board composition, we really look through the lens of what the issues that we're addressing at the time. And I think I mentioned this in my earlier answer. So thank you. Is there any more questions Belinda?

Thank you, Chairman. That concludes the questions received in advance for this item of business, and we can now move to questions in the room.

Louisa, microphone #2.

Chairman, may I please introduce John Whittington, ASA, who is a proxy shareholder.

Madam Chair. The last one for your tenure.

Thank you, Mr. Whittington. That's good. [indiscernible].

The earlier question Ms. Lee sort of half took my first question, but I just wanted to clarify one thing is she suggested that gender diversity was a and not according to my calculations with the appointment of Mr. Whiteing, it no longer meets the 40% female target, and in fact, that's, we look for 40% female and 40% male. And we feel our departure is going to get worse. So certainly, I appreciate Mr. West's comments, and we'll be holding him to go in the future with keeping gender and other diversity moving forward.

Thanks, Mr. Whittington, and I can assure you, this entire Board is committed to ensuring that we maintain diversity. We've got 2 searches that are current in the market at the moment, and we will ensure that we -- by the time we're sitting in front of you at next year's AGM, we have achieved the back of the 40% target.

Okay. Madam Chair, it seems that Mr. Whiteing...

You said that was my last question.

Well, my last time up.

You last time up. How many questions Mr. Whittington?

Madam Chair, it seems that Mr. Whiteing has not yet acquired any Suncorp shares and Ms. Brown has not added to the taken shareholding she had last year. We would encourage both to increase their stake in the company earlier rather than leave it to the last minute. Indeed, if the company's growth prospects are set as described in the annual report, it would be better financially for them to do so sooner rather than later.

Well, Mr. Whittington, as I discussed with you when we met, our directors have up to 4 years to satisfy the minimum shareholding requirements. And David joined the Board in February and Gillian has only been here for, I think, coming up 2 years. But the -- to prescribe when people have to buy shares makes an assumption about two things. One is whether there's any sensitive information that they're privy to and they're precluded from trading. And the second is people's personal circumstances. So our view is that it provided the non-executive director to satisfy the requirement within the 4 years from the October following their appointment and comply with our requirement, which is equivalent to 100% of their base net fee then that is that suffices.

I wasn't suggesting you prescribe when they buy, I was just encouraging them to do so sooner rather than later.

I suspect they've got their own financial plan, but thanks, Mr. Whittington. Other questions in the room?

We've just got one more from the floor. Chairman, may I please introduce Rob [indiscernible], who is a shareholder.

Thanks, Mr. [indiscernible]. Now we're not -- we're now talking about the election of Mr. Whiteing.

I'd like to put my position in first about how I feel about technology. I personally don't trust it. And I see values in it like on the land system and from Internet point of view, the advertising and stuff like that. But I don't have faith, I don't -- I'm pretty -- well -- I know a bit about technology because I used to sort of work in that area. And like a lot of mentioned at last slide, previously when technology was introduced, it never relied, it gained efficiency internally. It never relied on making its profit from the consumer. And what I wanted to say is, I notice you -- it says that your forward thinking. What do you think of this plain thing, and then they ask people to vote.

That's a different question to a technology question.

Well, it is technology because I made inquiries with Computershare and Link Market, MUFG and they said that I can interface with the display you've here. I think I mentioned it about 2 years ago to you, and all we need is for them to sit on a panel and there's no need for you people to know the votes at all. And when you put up your display, they can interface with the display of the vote. The only concession, I believe, when it comes with the resolution is possibly you need updated information during a merger and takeover. So I'll ask him whether David agrees that we have the skill, the technology to do that.

I might answer the question if I can because David is incredibly knowledgeable and experienced in technology, but just the issue with the display of the votes. It's actually best practice now, as Mr. Mayne pointed out before.

You people are pushing technology on the consumers and everyone and I'm trying to push technology on new people to use all the functionality that's available.

And we get the data that's put up, it's verified. So the data that's put up is for the benefit of shareholders in the room to know that those shareholders -- how those shareholders and proxyholders who are not in the room have voted. And the other thing with technology, Mr. [indiscernible] is we now have 549 people online participating in this AGM and that's 549 people who presumably couldn't travel to Brisbane. So this is something that's valued by many of our shareholders.

I'll go along with that technology. But I'm saying as far as I can for my better research on the technology capability, there is no need anymore for you people to be updated regularly during voting system. On my understanding, what I've researched is that you can bring up the registry company and ask them how the votes are coming in. And then it just improves transparency because from what I can understand, you can ring up someone and say, please change your vote, things aren't going along as we were hoping to.

Like I said, I'll make a concession for mergers and takeovers because you need to have a bit of an idea. So do you...

I would just note your comments, Mr. [indiscernible].

I'll ask do you agree that we have the technology to do what I suggested today but I am asking.

We have the technology. On how we use the technology is really a decision for the Board, and we note your comments.

So you do not like transparency, better transparency.

I think we are incredibly transparent. That's why we're putting the votes up, and they are -- all of the numbers are verified by our registry. Thank you.

Thank you, Chairman. I can confirm that there are no online or phone questions for this item of business.

Thank you, Belinda. As that addresses all questions and comments on David's election, would you please now vote using the voting card in the online portal, the Vote+ app or your paper voting card?

Details of direct votes and proxies lodged prior to the AGM in relation to David's election are now showing somewhat controversially it seems on the screen. Taking into account the direct and proxy vote shown on the screen and the total number of shares being voted today, it appears this resolution will be passed. Congratulations, David.

I'll now move to the reelection of Ian Hammond. As I mentioned earlier, Ian has an extensive knowledge of financial services industry and expertise in financial reporting and risk management. I'd particularly like to acknowledge his significant contribution as Chair of the Audit Committee. During his tenure, Ian has played a crucial role in the sale of Suncorp Bank in New Zealand Life, the business interruption response post-COVID and the introduction of IFRS 17. More detail is set out in the Notice of Meeting.

Ian joined your Board in 2018, and he is seeking reelection for his third and final term. I and Ian's fellow directors are fully supportive of him standing for reelection today. I'll now invite Ian to speak about his experience and continued commitment to Suncorp.

Thank you, Chairman, and good afternoon, fellow shareholders. Thank you for participating in the meeting. It has been a privilege to serve you since joining Suncorp's Board in 2018. And with my -- the support of my fellow directors, I'm pleased to offer myself for reelection for another term. I am both a shareholder and a customer of Suncorp, and I believe I make a valuable contribution through my extensive experience in financial services industry and my expertise in financial and risk management.

As Christine said, I'm currently the Chairman of the Board's Audit Committee and a member of the Risk Committee. I have spent a significant proportion of my career providing assurance and advisory services to a large number of Australian and international insurance companies, particularly during the 26 years I spent as a partner of PwC, which included leading the audit of some of Australia's largest financial institutions.

I have also held a number of non-executive director roles on the boards of both large ASX-listed companies as well as community organizations, exposing me to a broad range of perspectives across a diverse group of stakeholders. I am privileged to Chair Mission Australia, a role that brings me closer to the everyday challenges being faced by some of the most disadvantaged and vulnerable members of our communities.

Through the delivery of major social housing projects right across Australia, I'm also afforded key insights into the construction, home repair and home maintenance industries, which are important parts of Suncorp's supply chain, particularly as we support customers impacted by extreme weather. I'm only too aware of the critical nature of this work having visited Suncorp's customers, for example, in Brisbane and the Gold Coast impacted by ex-Tropical Cyclone Alfred.

Looking ahead, I am encouraged by the customer focus of Suncorp's strategy, which at its core aims to address the complex challenges of insurance affordability and accessibility. The measured adoption of technology will underpin Suncorp's future, and it is a responsibility, I don't take lightly as a member of your Board. On that front, I am keen I have a keen interest in digital and technology trends and spend considerable time both here and abroad gaining contemporary insights on advancements in this space.

I look forward to continuing to serve you, our shareholders and would appreciate your support today.

Thank you, Ian. I'll now put up the details of direct votes and proxies lodged prior to the AGM in relation to Ian's reelection, and you should now see them on the screen. Would any shareholder here in Brisbane, who wishes to ask a question on this resolution, please move to the nearest microphone? We have no questions in the room, Belinda on Ian's reelection. Do we have any questions on this resolution online or via the phone line?

Thank you, Chairman. We have no questions on the phone line. However, we have received a question via the online platform. The question comes from shareholder, Mr. Stephen Mayne. Ian Hammond reelection question. I am puzzled. While there was a modest 7.9% vote against in Hammond's reelections on the proxies, which were commendably disclosed early. So such a question can be asked. Did one of the proxy advisers recommend against Ian's reelection. And if so, what grounds did they cite? Did Ian or the chair engage directly with any of the owners of the $1 billion-plus worth of shares, which are voted against his reelection today in order to understand their concerns and persuade them to change their vote?

Thank you, Mr. Mayne. All proxy advisers recommended voting for the reelection of Ian Hammond, with almost 92% voting in favor, which is a resounding positive. And as I mentioned earlier, Ian has been an effective and committed director for Suncorp and conducts himself with the utmost professionalism. He's chaired the Audit Committee through a challenging period. One of the earlier questions today when I talked through the various simplification steps that we've gone through, Ian at the helm with the Audit Committee has been extraordinary.

The small number of votes against were for a variety of reasons. And we do meet with all institutional share -- or we offer to meet with many institutional shareholders ahead of the AGM. And where -- we don't seek to influence how investors vote, but we're giving investors the opportunity to ask questions as we indeed do with the Australian Shareholders' Association. Thank you.

Thank you, Chairman. That concludes the questions received by the online platform for this item of business.

Thanks, Belinda. As that addresses all the questions and comments on Ian's reelection, would you please now vote using the online voting card in the online portal, the Vote+ App or your paper voting card. Details of direct votes and proxies lodged prior to the AGM in relation to Ian's reelection are again shown on the screen.

Taking into account the direct and proxy votes shown on the screen and the total number of shares being voted here today, it appears this resolution will be passed. Congratulations, Ian and thank you for [indiscernible].

The final item of business, getting close to lunch, is to consider the reelection of Sally Herman. As I mentioned, when introducing Sally, she brings to Suncorp strong expertise in running retail banking and insurance products, setting strategy for financial services businesses and working customers, shareholders, regulators and government. Sally has been a director since 2015, was Chairman of the Risk Committee for 6 years and chaired Suncorp's Board Customer Committee when it was first established. Sally has invaluable corporate memory of the Board's deliberations and has been a tireless contribution to our Board and committee discussions. The Board and I can attest that she can conduct herself with clear independence of judgment. Sally is seeking reelection for her fourth and final term to facilitate measured Board renewal which, as I mentioned earlier, is extremely important. I and Sally's fellow directors are delighted to support her reelection and delighted that she has agreed to stand.

Sally, I'll now invite you to speak to your commitment to Suncorp.

Good afternoon, fellow shareholders. It's an honor to stand before you today seeking your continued support for my reelection at the Suncorp Group Board of Directors for as the Chair says my final term. Since joining the Board in October 2015, I've been privileged to serve our shareholders through one of the most transformative periods in our history. As part of a dedicated trans-Tasman insurer, I am more committed than ever to helping to guide this organization to continue to deliver sustainable long-term value creation. As the Chair said, I'm a current member of the Risk Committee and until the end of 2023, I had the privilege of chairing that committee during a period of unprecedented challenge and change.

In this role, I oversaw the risk management framework that guided us through the successful bank sale completion and the effective management of the transitional arrangements, major natural hazard events, including the devastating 2022 East Coast floods and subsequent extreme weather events, where strong risk management was critical to supporting our customers and communities. Our evolving regulatory landscape and rapidly changing digital environment, including strengthening our cybersecurity and defense against increasingly sophisticated cyber threats. And our approach to climate change adaptation, integrating climate risk considerations into our strategic planning and operational frameworks.

I do bring to Suncorp deep expertise gained over more than 3 decades in financial services, including over 15 years Board experience in financial services organizations with a particular focus on governance, regulation and compliance. 16 years with the Westpac Group, where I ran large business units across institutional and retail banking, wealth management and insurance and also executive experience in Australia and the United States which provided me with very diverse perspectives on financial services markets and exposure to leading complex transformations and navigating crisis periods, including the global financial crisis.

I do believe this experience supports my reelection and importantly, enables me to continue to provide continuity on the Board while we undertake Board renewal that the Chairman has talked about. This will ensure that your company maintains the highest standards of governance and strategy oversight as we execute our strategic plan.

I want to take a moment to thank Christine McLoughlin for her outstanding leadership of the Suncorp Board. She is the person of the highest integrity and with a deep commitment to our shareholders, employees and customers. She's led by example, always going into communities affected by natural disasters to support both our customers and the Suncorp team on the ground.

On a personal note, I have loved working with Christine and wish her every success.

Thank You, Sally.

I am energized by the opportunities ahead and will be honored to continue to serve shareholders in the next chapter for Suncorp. Thank you for your confidence, and I respectfully ask for your vote.

Thank you, Sally, and thank you also for your very generous, kind words. Details of direct votes and proxies lodged prior to the AGM in relation to Sally's reelection, now appear on the screen. Would any shareholder here in Brisbane, who wishes to ask a question on this resolution now I move to the nearest microphone. Belinda, that appears to show there are no questions in the room. So do we have any questions on this resolution online or via the phone?

Thank you, Chairman. We have no questions on the phone, but we do have an online question received. It comes from shareholder, Mr. Stephen Mayne. Sally Herman is the nominee director of premier investments on the Breville Board. Could Sally please comment whether she's in regrets about the way she and her colleagues on the Premier Board played the Myer situation as it all went to a pear shape at Myer this week? Please do so we can only talk about Suncorp matters today. Director CVs matter for shareholders, particularly given the index investing in compulsory super forces, millions of Australians to be exposed to the performance of all ASX 200 directors.

Thanks, Mr. Mayne, and I am going to disappoint you because it is totally inappropriate at a Suncorp Annual General Meeting with Suncorp shareholders to quote on the deliberations or actions of other companies. So please ensure that questions are relevant to Suncorp. Are there other questions online?

Chairman, that concludes the questions received via the online platform for this item of business.

That addresses all of the questions and comments on Sally's reelection. No, I'm sorry. No. Microphone #1, who we got [indiscernible].

I've been very surprised.

Sorry, what is your name?

I'm Anna Day.

Anna Day. Thank you, Anna.

Former journalist, now retired. But what I've really noticed here is all these brilliant women here and it's been really extraordinary for me to see. I don't know why Suncorp hasn't been getting these people on television so that the world knows that women can have these high positions. Is there a policy in the company not to put the women forward?

No. Ms. Day is not a policy in the company. I think though we don't actually see it as the role of the Board to be putting ourselves on television. That's the role of the CEO and the leadership team.

So therefore, CEO.

Well, I think there's a number of them in the front row there.

And they're quite often on the television. But no, it is, Suncorp does have a very strong cohort of women on the Board, in the leadership team and in fact, across our operations. Whenever I'm visiting teams on the ground when there is disasters, we're always very well represented by our men and our women. Thank you.

So I think that's all the questions on Sally's reelection. So please now vote using the voting card in the online portal, the Vote+ app or your paper voting card. Details of direct votes and proxies votes prior to the AGM in relation to Sally's reelection are again shown on the screen.

Taking into account the direct and proxy vote shown on the screen and the total number of shares being voted today, it appears this resolution will be passed. Congratulations and thank you, Sally.

So I can now confirm that a total of 553 shareholders, proxyholders and other attendees joined us today throughout today's proceedings. So thank you for taking the time to do that because that really reinforces the value you see in AGMs. Belinda, before we move on, do we have any shareholder questions that have not been addressed during the meeting?

Chairman, I can confirm there are no further questions or comments to be addressed during this meeting.

So that concludes the business of the meeting. The poll will remain open for a further 5 minutes to enable you to complete and submit your online or paper voting card. And if you're here in Brisbane and need assistance with your voting card, please see one of the team members. And if you're online and need assistance, please contact the share registry's online AGM support team on 1 (800) 990-363. Once the share registry has counted the votes cast during the meeting, the results of the poll will be announced via the ASX later today and will also be available on the Suncorp website. A replay of today's AGM webcast will also be available on our website.

I would now like to invite Duncan West to make some brief comments as Chairman Elect, and then we'll all go and have a cup of tea.

Thank you, Chairman, and good afternoon, everyone. I'm very conscious that I stand between you and the very fine sausage rolls outside. So I will keep this pretty short.

It's a pleasure to be with you here and have the opportunity to address you as the incoming Chairman of Suncorp. As a proudly Queensland-based company with a strong retail shareholder footprint in this state, I would like to extend a special thank you to our Queensland-based shareholders, including those here today in the room. We value your loyalty.

It is an enormous privilege to be taking on this position at such an important time for Suncorp. As a member of the Suncorp Board since 2021, I have been at Suncorp's material transformation journey to date. And I am enthusiastic about the opportunities that lie ahead for Suncorp in our new chapter as a stand-alone trans-Tasman general insurer.

Having worked in financial services, including the insurance industry for more than 40 years, I deeply understand the critical importance of insurance to the economy and our communities, and the vital role Suncorp plays in supporting our customers when the unexpected happens.

As you heard through the Chairman and CEO's addresses earlier, Suncorp is well positioned to build on its exceptionally strong foundations to drive further momentum and efficiencies and deliver the benefits of being a profitable, well capitalized and customer-focused business that can invest in the future and create value for all our stakeholders across the Tasman. Importantly, this position also provides us an enhanced ability to address some of the very real challenges our customers, communities and the industry continue to face when it comes to insurance affordability and accessibility and the impacts of climate change. These urgent issues are at the core of our strategy and will remain a priority for your Board together with our executive leadership team including through our advocacy with government, regulators, the industry and communities.

On a personal level, I am committed to serve you, our shareholders and have taken steps to ensure that I have the time and capacity to give the role the attention it deserves.

I'm also very appreciative of our important Queensland heritage and the commitments we have made to the Queensland government and wider community. And with my Board colleagues, Steve Johnston and his team, we will continue to respect this.

Finally, I would like to join the CEO and my Board colleagues in acknowledging the significant contribution of our outgoing Chairman, Christine McLoughlin. On behalf of my fellow directors and all shareholders, Christine, thank you for your leadership and dedication to Suncorp. Under your stewardship, and together with our CEO, you have led Suncorp through periods of unprecedented challenges and supported the company's evolution in line with changing customer and community expectations and fast-paced workforce and technological changes. Importantly, this has been done with a deep consideration for all our stakeholders. I look forward to building on your legacy and those before you with a focus on driving long-term sustainable growth and shareholder value through the delivery of positive outcomes for our customers and communities across Australia and New Zealand.

Thank you, and I hope to meet as many of you as possible following the conclusion of the meeting.

With that, I'll now hand back to the Chairman.

Thank you, Duncan. As that now concludes the business of the meeting, I declare the meeting closed. And I'd like to take this final opportunity to thank all of you, our shareholders, for your support. It's been a great privilege to serve on your Board or past decade, including as your Chairman for 7 years. I wish Duncan, Steve and the Board well as they guide Suncorp through its next chapter. And I will continue to be a shareholder and a customer.

For those of you here at the physical AGM in Brisbane, light refreshments will be available in the foyer, and all of your Board and leadership team will come out and have an opportunity to ask further questions and just -- we'll just say hello. So thank you so much for taking the time to come in and join us today for this important meeting. Goodbye.

Good morning, and welcome, everyone. And for those that are joining us here in the office, there's volumes number of people in the office. If there is a need to evacuate, please follow the instructions of the team, and they'll look after you. And let me begin, obviously, as usual, by acknowledging the traditional owners of the lands on which we meet and to pay our respects to all elders past and present.

So today, I'm joined by our CFO, Jeremy Robson, to present our financial results for the FY '25 year. And the other members of our leadership team will join Jeremy and I for the Q&A session that follows.

So to the first slide, it's one I always start with, and it's what we refer to as our value creation framework. And it shows why grounding our organization through purpose is so important to us. Our purpose delivered through our people to support our customers and the community, in that order, will always lead to financial -- good financial outcomes for our shareholders.

So to the next slide, and here, we've captured the key numbers from the full year result. Net profit after tax of $1.823 billion was supported, obviously, by the one-off profit on the sale of the Suncorp Bank and New Zealand Life operations. Cash earnings, which back out these numbers, was $1.486 billion.

Now importantly, the underlying performance of the business, which is best reflected in the underlying insurance trading result, has increased by 20% to $1.566 billion or on a ratio basis to 11.9%. Natural hazard costs, which are always a feature of the result were $1.355 billion, and they were $205 million below our allowance. Investment returns are again a significant contributor, continuing to demonstrate the resilience of investment markets and particularly and I would point out the outperformance of our manager panel.

On the bottom of the slide, I've included the high-level GWP results, which have landed largely as we have guided. The premium moderation reflects lower input costs, more benign inflation and the outworkings of a competitive market. Now our approach -- and it's very important to point out, our approach at this point of the cycle is to manage price and volume to optimize margin while maintaining appropriate levels of growth across the portfolio. And we remain very confident that the strength of our brands and the quality of our underwriting gives us the firepower to allow us to achieve these dual objectives. Now finally, on the slide, the Board has declared a final ordinary dividend of $0.49 per share, and that brings the full year dividend to $0.90 per share, which I think is -- you have to go back to 2008 to -- when the Suncorp and Promina businesses came together to replicate a dividend, full year dividend outcome of that magnitude.

We're also today announcing a $400 million buyback, which again is the maximum possible for FY '26 given trading windows, blackout periods and average daily volumes. And Jeremy will provide more detail on capital, and I'll come back to this topic in the outlook comments later.

Now of course, our business, like any business, is about far more than just the headline financial metrics. I personally spent a lot of time this year visiting customers, communities and industry stakeholders across Australia and New Zealand, talking about the important role that insurance plays in our society and advocating for an increased focus on risk reduction on resilience and on mitigation. At each and every customer visit, I am reminded of the critical role that we as insurers play in our customers' lives and the difference we make when we get it right as we do in the vast majority of cases. Equally, I understand the impacts if we get it wrong.

Now this year, we responded to more than 120,000 natural hazard claims from extreme weather events across Australia and New Zealand and paid out $9.8 billion across all of the claims categories. Our ability to support customers in the wider community during these events has been enhanced through our investment in a disaster response center based in our Brisbane headquarters. And I know many of you have had the opportunity to visit that center. This and the establishment of a regional hub in Townsville and our mobile hubs that we deploy into claims events are core parts of our commitments as agreed with the Queensland government through the sale of the bank. These facilities ensure we're better prepared to respond before, during and after disaster strikes.

Now to the next slide, an insurance affordability has remained a topic of interest over the course of FY '25. Now here's an update of a slide that I've used over the last couple of results presentations, and it details the factors that have driven insurance pricing over the past 5 years. Now on the top left of the slide, I've shown the absolute number of natural hazard claims by year. Now even though we've landed below our allowances in FY '25, the absolute number of natural hazard claims remains in line with the most recent trends.

To the top right is the good news. After a multiyear price and capacity reset, reinsurance markets have stabilized with combined reinsurance and natural hazard costs slightly lower in FY '26 than they were in FY '25. And this will take pressure off premiums, particularly in the home insurance portfolio.

Now on the bottom of the slide are plotted cost per policy annual inflation for both Home and Motor. Now Motor first and the good news is that repair capacity has been restored and supply chain inflation has continued to moderate. It's a slightly different story in Home, however, with reductions in reinsurance costs being offset by the emergence of 2 key risk factors inside the home, Flexi pipes and lithium batteries, which are driving escape of liquid and large loss fire claims. Now I've included some detail on the slide, particularly around some trials that we've done through home repair, and we're happy to come back to that in more detail during the Q&A.

So at that point, let me hand back to Jeremy -- hand over to Jeremy, and I'll come back later in the presentation.

All right. Thanks very much, Steve, and good morning, everyone. Steve has already touched on the highlights, the group highlights, but I'd just like to reinforce a couple of key points. Notwithstanding, our net profit was up 52% to $1.8 billion, assisted by the gain on the sale of the bank in New Zealand Life as well as favorable investment markets, natural hazards and prior year reserve releases. Our underlying insurance profit was also up a healthy 20%.

It was also pleasing to deliver another rewarding year for our shareholders. We returned a total of $4.1 billion of capital from the sale of the bank. We achieved a total shareholder return of 33% for the year. As Steve said, the full year dividend is $0.90 per share fully franked. And of course, today, we've announced a $400 million buyback to be executed over FY '26 and importantly, with a residually strong balance sheet.

So now let's get into the results in a little bit more detail, and we'll start with underlying margin. The underlying ITR improved by 80 basis points to 11.9%, with 12% for the second half, at the top end of our 10% to 12% range. This reflected the earn-through of pricing and moderating input costs but with some headwinds from lower investments and prior year reserve releases. On a portfolio basis, the increase was driven by Motor and New Zealand, where inflation has eased significantly, offset by deteriorating loss ratios in both the Queensland and New South Wales CTP portfolios and elevated fire and water claims in Home.

Looking forward, we expect the FY '26 margin to continue to be in the top half of the range. Importantly, with a favorable FY '26 reinsurance renewal, we've also further strengthened the sufficiency of our natural hazard allowance now at $1.77 billion for FY '26. On a like-for-like basis, the underlying margin outlook would have been above the top end of our target range, and we believe this adds resilience and quality to our underlying ITR.

Within this margin outlook, we're also continuing to focus on organic growth as well as our investment in our key strategic imperatives of platform modernization and operational transformation. And then the prior year reserve release assumption is now down to just 30 basis points.

Let's now move to the divisional results, and we'll start with Consumer. In Motor, GWP increased 7%, reflecting the impact of moderating inflationary pressures. As expected, unit growth was softer in Q3 as we maintained a disciplined approach to pricing for inflation. Now pricing and marketing changes were implemented in Q3 giving an improved position on renewals and strike rates into Q4 and then into FY '26. In Home, GWP grew by 9% as we continue to price for higher natural hazard allowance. A broader market contraction contributed to flat unit growth in Home for the year, although we also saw improved momentum in Q4 and into FY '26.

Underlying ITR for Consumer improved from 8.1% to 9.6%. In Home, whilst the higher natural hazard allowance has been priced for, we did experience elevated severity in both fire and water claims. In Motor, claims inflation continue to moderate with easing supply chain constraints, improving repair capacity. Now looking forward, we expect margins in Home to continue to improve and Motor to moderate both towards their respective target levels.

Next then to Commercial and Personal Injury. GWP growth of 7% was across most portfolios. Now an important feature of our Commercial business is the portfolio diversification. And you can see we've included a new pie chart on the chart there that shows that diversification on the bottom left-hand side. Whilst market rates are under pressure for top end property and financial lines, these were a relatively smaller part of our portfolio. We've seen very strong growth in platforms with improved broker connectivity as well as good growth in our Fleet and heavy motor portfolios.

Underlying ITR in Commercial was largely flat across the year and remained strong albeit with some ongoing price remediation across the packages portfolio. The underlying ITR for Commercial -- for Personal Injury is below target level and has been impacted by weaker industry loss ratios in CTP for both Queensland and New South Wales, lower investment income from a reduced ILB carry and lower expected prior year reserve releases as we've been flagging. Underlying ITR for Personal Injury is, however, expected to improve strongly as -- following pricing changes in New South Wales CTP in January and in the announced and expected price increases for Queensland CTP. We continue to engage constructively with the Queensland government for scheme reform, which is also expected to continue to improve returns to sustainable levels over time.

Turning then to New Zealand. And really the standout feature was the underlying ITR at 19%, with the earn-through of the rapid pricing response to the significant increase in input costs in recent periods and then with current period claims inflation and reinsurance costs moderating significantly. The New Zealand business is also diversified, and GWP growth of just over 1% was mixed across our portfolios. In Consumer, Home growth continued to be strong with both AWP and unit growth. And in Motor, we saw ongoing unit growth, albeit with reducing premiums reflective of the strong margin position.

GWP growth for Commercial in New Zealand has been impacted by the softer competitive market conditions as well as clients shifting to higher risk retentions. Going forward, we expect to -- we continue to expect margins to normalize towards the top end of the target range for New Zealand in FY '26 as price increases have now moderated in line with inflation.

Moving then to reinsurance. Now as previously flagged, we undertook a comprehensive strategic review of reinsurance last year. We engaged with a broad range of strategic partners and global experts. We explored all reinsurance markets, both traditional and alternative, including whole of account quota share and aggregate covers. Our key objectives were to optimize capital efficiency relative to our cost of equity and manage volatility, all with the overarching objective of maximizing long-term shareholder value creation.

Our review emphatically concluded that the comprehensive program finalized for FY '26 best met these objectives and we are confident in our underwriting capabilities and our ability to identify and retain profitable exposures for our shareholders. The program sees improved efficiency, with some changes from the FY '25 program achieving a very similar level of risk retention but at a significantly lower cost. Now whilst favorable rates were achieved on the main cat program and this market remains very constructive, the market for aggregate covers is markedly different and remains more constrained and expensive.

Now then to natural hazards. Having increased the natural hazard allowance from $1.36 billion to $1.56 billion in FY '25, our natural hazard costs for the year were below allowance by $205 million. Now this reflects favorable experience, particularly in the first half as well as the impact of the ground-up cover from the cyclone reinsurance pool. You'll see the cost of attritional events has increased with additional claims management resourcing following the parliamentary flood inquiry and then ongoing investment in our natural hazard claims management capability.

The allowance for FY '26 will increase further to $1.77 billion, as I said. Now about half of this increase relates to portfolio growth and inflation, but the other half relates to an investment in the level of sufficiency and resilience of our natural hazard allowance. To put this into context, our modeling shows that based on our current reinsurance program, our current exposures and costs, so like-for-like basis, the FY '26 allowance would have been sufficient in 7 out of the last 10 years and 4 out of the last 5. And then over that 10-year period, we would have cumulatively been below the allowance by around $1.5 billion, and that's profit that would have been retained by Suncorp shareholders and not paid out to third parties.

On then to investment performance. The underlying -- the average underlying yield on insurance funds was lower, reflecting risk-free returns in line with the prior year but with a lower ILB carry. And then our investment managers continue to perform strongly across both funds albeit at a lower level. Now you'll see that we've made some changes to our investment allocations in FY '25 with a reduced allocation to ILBs and insurance funds and some rebalancing from cash and convertible notes across other asset classes and shareholders' funds.

Going forward, we'll continue to adjust the investment allocations to achieve a closer match to our latest strategic asset allocation. We expect an ongoing reduction in exposure to ILBs and a modest allocation to structured credit and insurance funds and then a further reallocation from cash to infrastructure and property in shareholders' funds as suitable opportunities arise.

And then finally, on investments, our insurance funds remain well matched to the underlying claims and the investment portfolios continue to be of a high quality.

Let's then turn to expenses. And I focused here on the general insurance expenses given the changes to the group structure. Operating expenses here increased by 7%, and this was largely in our growth-related costs driven by the investment in the Digital Insurer policy admin system, which is now live in AAI New Zealand; a new people enterprise system; and an investment in AI capability and use cases.

We also increased our spend on marketing, particularly search engine marketing in Q4. You'll notice that run the business expenses increased modestly as productivity improvements continue to help offset wage and technology inflation. And our total expense ratio reduced by 100 basis points to 18.6%, slightly better than the guidance provided at the first half.

Going forward, we continue to aim to keep our run cost as low as possible through operational efficiencies and as we continue to invest in our key strategic priorities of platform modernization and operational transformation, including AI. And then for FY '26, we expect our total expense ratio to remain largely consistent with FY '25.

Now then to capital. So following capital generation over recent periods as we completed the bank sale, we now retain a very strong capital position with CET1 of $997 million, above the midpoint of our target. This has been generated over recent periods by the sale of New Zealand Life, ongoing organic capital generation and capital target changes.

Now I'll just make a few comments on the usual capital walk on the slide. Firstly, the bank capital return of $4.1 billion was completed in March, as you'd be aware. The Life capital release is now $295 million, noting that $145 million of this will become available once the second tranche of proceeds is received in July '26. The final dividend of $0.49 per share represents a full year payout ratio of 71%, around the midpoint of our target range as we'd expect. And then the GI capital usage was largely from the higher FY '26 natural hazard allowance that's net of lower reinsurance costs, business growth and changes to the strategic asset allocation.

Now having completed the bank capital return in the first half, we've today announced the $400 million buyback to be completed over the course of FY '26 commencing in September. As Steve has made the point, I'd also make the point that $400 million is our estimate of what can be efficiently achieved over the 12-month period. Going forward, capital access to our needs is expected to be returned to shareholders in the form of ongoing buybacks. I also note that we have a preference for managing capital in the top half of the range as opposed to really hard on the midpoint in order to optimize ongoing capital flexibility.

Now I'd just like to quickly finish up by touching on the financial settings that we believe will drive long-term value creation at Suncorp. Firstly, we're committed to profitable and sustainable growth. We've demonstrated this in a disciplined approach to motor pricing as well as our approach to the current softer rate cycle in commercial. We've got good growth opportunities across all of our portfolios but particularly in commercial. And our focus on platform modernization and operational transformation is designed to deliver leading customer experience and competitive pricing both to drive growth.

Secondly, we delivered strong and resilient risk-adjusted returns. Our underlying ITR targets now include even more resilience to natural hazard risk as well as the inclusion of a sustainable investment program to support our growth aspirations and significantly reduce reliance on prior reserve releases. Thirdly, we have a disciplined approach to capital management, as evidenced by the bank sale capital return being the same amount as committed to back in June '22, today's announcement of the $400 million buyback for FY '26 and our long-term shareholder value approach to the FY '26 reinsurance renewal.

And then finally, we have a strong and well-managed balance sheet, providing significant flexibility. We maintain an appropriately high quality investment portfolio, a comprehensive reinsurance program and a very robust capital position and target framework. And we continue to believe this is a compelling framework for Suncorp to deliver superior shareholder value.

And with that, I'll hand you back to Steve.

Thank you, Jeremy. And to the next slide, and this is one that's titled Our transformation journey. Now 5 years ago, we reset our strategy, and we had a series of Investor Days in 2021. And we set an ambition to build a simplified, a resilient and a growing Suncorp that importantly delivers for all of our stakeholders. Now this slide is a summary of our progress over the past 5 years against those 4 key objectives. Now it's reasonably self-explanatory.

The sale of Asteron Life in New Zealand brings to an end the simplification journey and has seen the emergence of Suncorp as a pure-play insurer. Now given the complexities, the simplification program alone would constitute a significant achievement. However, alongside simplification, we have built significant resilience into our BAU financial metrics. We are now consistently delivering margin to the top of our guidance range and as Jeremy pointed out, with that margin inclusive of a material reset in natural hazard allowances and record investment in the business. With the key programs of work, that will completely transform this organization captured in the middle of the slide.

So with the simplification complete, with our business financially resilient and the platform build well underway, the question inevitably turns to what's next. So let me start with some high-level strategic principles. We see ourselves as a skilled manufacturer of risk products, with superior underwriting capabilities that are enhanced by technology. Hence, our bias is to leverage that capability for our shareholders rather than the shareholders of others in the insurance value chain.

Now that's not to say for a moment that we won't look for opportunities to utilize others' balance sheets where we can achieve superior returns on capital and reduce volatility. But I apply the caveat that anything fitting into this category has to be sustainable longer term and be with trusted counterparties. Our preference is for organic growth, albeit we recognize there may be opportunities to supplement our footprint as we move deeper into the current insurance cycle and as assets become more challenged.

We will always retain a disciplined approach to our balance sheet and our capital levels. We'll always hold appropriate buffers. We'll pay at the midpoint of our payout range and using a perpetual buyback facility to return excess capital to shareholders, all along, creating long-term shareholder value, which I've mapped in the middle of the slide.

Now to the right of the slide, I've given you our 5 key differentiators, which I'll talk briefly about now ahead of an Investor Day in late October, where we'll cover them in a lot more detail. In distribution, our multi-brand strategy remains a key differentiator, and it allows us to access a broader customer base than any of our market competitors. We will continue to optimize our brand reach and market segmentation. We'll reduce brand overlap, and we'll specifically focus on geographies where we see material growth opportunities or inorganic activity is disrupting current customer flows.

Digital remains our preferred method for routine sales, service and claims lodgment. However, as we build out our platforms and we continue to invest in AI, we see a great opportunity for straight-through processing and fulfillment of more complex processes with limited to no human intervention.

Now at the core of our strategy is our platform modernization and operational transformation programs of work. Platform modernization is the single most important investment in Suncorp's future. Started with data, which is now fully cloud-based across Australia and New Zealand, our broader public cloud footprint now represents 93% of all technology workloads, which enabled us to completely exit our legacy data centers over the course of the past year. We then move to pricing, which is now in place across Australian Home and Motor and is soon to be deployed across the Vero New Zealand business.

Our multiyear investment in policy administration is the centerpiece of any modern insurance platform. We'll have more to say about this at Investor Day, having already gone live with Duck Creek PAS in our New Zealand JV partner, AAI, and we're now deep in delivery across our AAMI brand in Australia. Now I'm pleased to say that what we've already seen in AAI has reinforced our business case, and the benefits that we expect will be realized over time.

At the heart of our operational transformation has been the emergence of AI. It works hand in glove with our digitization, automation, partnering and best-in-claims programs to deliver business improvements but importantly, through the lens of the customer. That's because we know that if we improve and automate processes, we use AI tools to do so, we will have the dual effect of improving customer outcomes and making our business more efficient.

At our last Investor Day, we described our adoption of AI through a mix of, firstly, third-party AI utilities, also AI capabilities that are embedded in our core system, new core system build. And finally, our deep -- own deep AI capability and the partnerships that we've built.

Now almost 12 months on and the program of work is really taking shape. As you can see from the slide, we already have over 100 AI and machine learning models currently in production with many new AI use cases planned to be progressively rolled out and finding their way into our business over the next 12 months. Now as I said, we'll update you on all of this in a lot, lot more detail at our Investor Day in late October.

Finally, before we move to Q&A, I'd like to briefly turn to the outlook. Gross written premium growth is expected to be in the mid-single digits as pricing moderates in line with easing inflationary pressures in some portfolios. The underlying ITR is expected to be in the top half of the 10% to 12% range, but that's inclusive of the additional resilience buffer that we've incorporated into the natural hazard allowance.

Prior year reserve releases in CTP are expected to be around 0.3% of group net insurance revenue. The operating expense ratio is expected to be broadly in line with FY '25 but with an increasing proportion of that expense base allocated to growing the business. And finally, we'll maintain our disciplined approach to the balance sheet targeting a payout ratio at the midpoint of the 60% to 80% range of cash earnings but of course, weighted, as we usually do, to the second half of the financial year.

Now the announced buyback will proceed through FY '26. As we pointed out, the $400 million reflects the maximum practically possible given trading blackouts and daily volumes. However, given our pro forma capital position, post the buyback remains very strong, and of course, always subject to any extraordinary events, we would expect the buyback facility to continue into FY '27.

And so with that, we'll move to Q&A.

Kieren Chidgey from UBS. A couple of questions. Maybe just starting back on Slide 11. Just interested in sort of the different quarterly trends that played out in Home and Motor through the half. Can you just discuss in a little bit more detail what actually occurred in third quarter? And I think you mentioned sort of changes to pricing and marketing that were implemented during fourth quarter and maybe at the end of third quarter. So was it a change in your willingness to accept slightly lower pricing or moderate a little bit? Or have you seen the competitive backdrop change a little bit as we move through fourth quarter?

Why don't I make a few high-level comments. Jeremy, can supplement them, of course. And then I wouldn't mind getting the CEOs up to -- because the nuances in each of the portfolio are slightly different. But the general thematic remains the same, and the word I would use is disciplined. We -- Lisa, myself, Jeremy and others had a lot of experience in insurance. And what we know is that if you get behind on your pricing, it takes a long time to catch up. And so through the course of Q2, we did see the inevitable moderation of inflationary factors, particularly in motor insurance. We saw availability of repair shops start to open up, but it was patchy. We saw the supply chain starting to loosen up a little bit and aggregate inflation starting to come down. And we saw that obviously.

Now the other point I'd make in insurance is we all do our reinsurance renewals at different times. So if you were doing a 31 December renewal, you'll have line of sight to that probably through late November into December. And you'll get more confident about the trends that you're seeing in the portfolio. Ours is obviously at the end of June. And so you'll always get this slightly different sort of interpretation between where inflation is.

Our bias is to make sure that the inflationary factors that we're seeing are absolutely embedded and that they're at no risk of popping or blips occurring or something that we haven't seen because I'd make the point that insurance inflation is different to CPI. And if you just proxy at the CPI, you can sometimes get caught up. So we wanted to make sure that we had seen that embedded before we moved.

When we did get confident about that, when we started to get line of sight to our reinsurance renewal, obviously, through January and February, we started to believe that we could adjust the pricing and net of it all being that we wanted to make sure we are pricing ahead of inflation. And so we did move the portfolio. We moved the pricing. We increased the marketing. And the most important factor that gives us a lot of confidence is that the portfolio responded exactly as we thought it would. And you can see that in Q4. The volumes picked up, and that trend has continued into FY '26.

I'd make the other point that's a high-level point is that we've got an incredibly diversified portfolio. So if you look at our business through the prism of some of our competitors, we are different but a different composition in New Zealand. Our Commercial business is fundamentally different. And we do have a CTP portfolio, which stretches across many jurisdictions but particularly into Queensland. And we've been engaged with the Queensland government very constructively around premium rates in the CTP scheme, and we're making very good progress there.

So I think, Kieren, that's the sort of a high-level philosophical view. We're all involved in these decisions. I mean at least it takes primary accountability for it, actually does a fantastic job of understanding that. But our bias is to be disciplined around price and volume to see the inflation embedded in our business before levels -- embedded in our business before we move pricing. I think that's the right way to do it because if we get on the wrong side of that, it takes a long time to catch up.

So Lisa, do you want to quickly -- just a few comments on Home and Motor, and then I'll get Michael and then Jimmy to come up.

Thanks, Steve. So I will touch a little bit more on growth. But first, if I step back in terms of the consumer portfolio, we have margins within the target range, which I think is a really good position for us to be in. As you saw in terms of the chart on Slide 11, we did have good growth in the first half, and that growth started to come off in the second half. Steve has given a very good explanation to that.

Equally, what we did see also is less shoppers in the market in the second half. And I'm sure anyone who has watched television or listened to the radio over the last 6 months would know there's been an increase in marketing activity in the insurance market and in particular, for home and motor. And importantly, as Steve said, we have been really prudent in terms of making sure that we saw those input costs sustainably come down before taking pricing action.

So you see a difference between Q3 and Q4 in the half as well. And as Steve touched on, we deployed additional marketing and also once we were confident around the moderating inflation in Motor, some pricing changes. So we've started to see improved momentum. And whilst it's only 5 weeks of this financial year, importantly, we're seeing that momentum continue, which is good to see.

Sorry, Lisa -- mic's off. Can I just follow up? I mean, the inflation commentary on Motor is clear that, I think, one of your slides shows Home up year-on-year again in '25. Just mind giving you a little bit of color around the momentum in Home inflation through the course of the year and the second half?

Yes, absolutely. So in terms of Home inflation for '25, obviously, natural hazard allowance went up. That's a driver of that. The other input costs are working claims inflation. And we did see water and fire in particular. In terms of fire, we saw a little bit of frequency and severity -- or sorry, just severity and in terms of water, a little bit of frequency and severity play through. And that's been an input.

We do expect that to persist. We have pricing in play for that. And obviously, we're working closely with our supply chain to see if there are any other opportunities to help moderate that inflation. But for now, we believe that will persist. And also reinsurance is obviously a significant input to that.

Okay. Jim?

Michael, do you want to?

Thanks, Steve. Look, in the context of New Zealand, and I'd look at the Commercial business first, we're seeing quite a bit of pressure and softness in the commercial market around non-buys, higher retention points, foreign capital. And so in the first half relative to the second half, we've had to respond to that in terms of retaining the risk at expiring terms and trying to get the price that we that we want to get beyond which would be unreasonable. So it's very much a discipline around getting the right target price for the risk that we want on the Commercial. So that's why you're seeing that sort of half and half.

On the direct side, particularly around the Motor business, we did see quite a drop-off in sums insured in the second half of last year. But equally, we have responded -- we did see quite a bit of competition coming in, in sort of the first half that we responded to in the second half around pricing to make sure that we were still trying to grow that new business, those units. What you'll see in the pack is that we have unit growth. We will continue to have unit growth in both in the motor and the home space. The -- we mentioned earlier about the Duck Creek in AA Insurance. We're seeing real benefits of that coming through on that in terms of not just experience for customers, in terms of turnaround times for quotes but also efficiencies at the front end in terms of call center. So we're expecting that, that will be the catalyst for the growth, particularly in the AA business, Home and Motor over the '26 year period.

Okay. Michael?

Thanks, Steve. So for Commercial and Personal Injury, I guess, back to Steve and Jeremy's point, it's around diversification, not only in terms of product set but also market segment. So particularly in Commercial, you've got your top end corporate going right down to micro SME. We're primarily a mid-market SME insuring the corporates on the commercial side. So that's important to keep in mind.

If we look at the portfolio, there's probably 4 parts: compulsory third party; workers' compensation; the Platform business, which is connectivity for commercial products; and also the tailored lines business. So within CTP, the 2 largest portfolios are New South Wales and Queensland. And as Steve said, in New South Wales, we've got a 12% price increase going through from January and probably another price increase coming through in the next few months. A wide disparity in prices in New South Wales, which is unusual, so it depends on how the competitors react. But you can see the price flowing through that book. It's about margin remediation.

In Queensland, we talked about Queensland for the last 18 months. A lot of discourse with the Queensland government, very constructive. We've got $7 flowing through that book right now in terms of price increase, and we expect another price increase from October, which hasn't been announced. But that will basically make that scheme sustainable. There's still further work to be done but much more comfortable with that scheme now after talking to the government in a very constructive manner.

In workers' compensation, we grew about 5%. Workers' compensation in Australia is mainly about WA. It's very strong. I think system in WA is probably about 8%. So we've probably lost some market share in workers' comp. The reason for that is it's around margin, just trying to make sure we get the right accounts. We lost a couple of large accounts on price, and I think it's the right idea. But going forward, I expect system to be again mid-single digits, if not, more, and we should get some market share back in WA.

Our Platform business grew about 11% for the year. Key strategy, connect to broker platforms, that's the way of the future. Mainly, it's the SME packages area. Our growth there will come back a little bit over the next 12 months because, again, the margins aren't quite where they need to be, so we'll put some more price through there. But still confident that strategy is going to work very well.

And then the big one there is tailored lines. Again, I think very similar trends to what you've heard elsewhere. That top end corporate property has been under pressure. We probably lost about $30 million to $40 million in business there, and we have walked away based on price. But otherwise, it's holding up fairly well, particularly in that motor book with the underlying inflation coming through. And so in the second half, you'll see, although overall, we grew about 5% for the year, it came back to about 1.5% growth in the second half.

But again, I think if I look at where competition is, I look at what's going on, I think we're in a good position, and we are launching a new product in that area. So the Vero specialty lines coming through, launched 3 products in the March-April period, and we'll launch more products next year. So I'm very confident that we've got the right proposition for brokers there. So I hope it gives a good feel for the diversification and the nuances of each of those portfolios, which is very different.

Thank you. Jeremy, anything you want to add to that?

The only thing I would add is it covers it pretty well. It's just in Home, I think you'll see in Home, over the course of the year, our market share has pretty much held. In fact, we might have even got a little bit. So the unit growth, system unit growth in Home has been a little bit softer, so relative to market, we haven't done too badly on Home.

I'm sure you got a follow-up question to all of that, Kieren. Yes.

I won't. I'll move on to the second question. Just sort of more at a high level and maybe it's one for Jeremy. You've talked to not changing the 10% to 12% underlying ITR margin target over the last couple of years because it produces a very strong healthy return on tangible equity and potentially open yourselves up to more competitive risk if you push it higher. We're now kind of seeing that sustained, but obviously taking more adequacy through the cat budget, so your risk of reported margins being stronger in actual return on tangible equity going up. So it does feel like that's changed a little bit. Just interested in your thinking around your ability to kind of dial up conservatism and still make sure you're not losing market share and still able to generate good organic growth.

Yes. I might just make some high-level comments and Jeremy can fill in the gaps. I think, obviously, we had quite a favorable reinsurance renewal, and we're able to quite deliberately categorize that the market would get but that we would get simply because of our size and scale. And we believe that there was a [ rate ] online benefit that we got relative to the rest of the market.

Now the point is very obvious. You can do a number of things with that should you choose to. You could take it through to profit and to margin. You could recycle all of it to growth, keep your margin targets where they are and recycle it to growth. Our bias was to use that synergy benefit that we got to improve the resilience of the allowance, still deliver these high-quality returns but even higher quality with the resilience that we're building into the margin.

Now all of those options are all viable. But I think it gives, I think, our investors confidence that when we print a margin in the 10% to 12% range, particularly if it's towards the top end, then the resilience that's embedded in that -- and of course, we may be depressing slightly the underlying ITR by doing that. But to the extent that the actuals fall below the allowance, then the benefit goes to the reported ITR. And the reported ITR is cash earnings is dividend to our shareholders.

And so that's the way we thought about it. I mean I accept that there's other ways you could think about it. But building that resilience, the fundamental financial resilience into our business has been a critical story, part of our story over the past 5 years. And we think it's worked well, and we should continue within the appropriate boundary.

Yes. I'd just add that we continue to think that the returns in that top half of the range are very attractive relative to the risk profile of the business. We think that from an investor perspective, adding -- continuing to add quality into those earnings is a really important feature. So we've taken the opportunity to do that.

And I'll just add to Steve's comment on the reinsurance. There were 2 sort of series of benefits for us. Really, one was [ rate ] online relative to the rest of the market and reasonably confident around the -- there is some gap there as we deploy our scale into the purchasing process. And then also, we've changed the structure of the program.

Now the risk retention is pretty much -- in fact, it might have actually improved modestly. So the risk retention is very similar but at a significantly lower cost. So we've got a much more efficient, effective reinsurance program. We're able to deploy that benefit into it as well.

Freya Kong from Bank of America. Just following up on the natural hazard allowance. So the growth was 13%. How much of this is exposure growth versus less reinsurance costs versus prudence? Could you just break it down for us?

This is for FY '26, yes. So half of it is exposure. So none of it's reinsurance. The changes we made to reinsurance didn't impact capital or risk or natural hazards. It is -- there's some quota share runoff that does come through, but half of it -- half of that increase, the $200 million increase, is basically exposure and inflation. And then the other half, that's sort of [ $100 million, $100 million ]. The other half is just pure increase insufficiency.

And just a question on the recent reinsurance renewals as well. I guess what was the thinking behind retaining a similar sort of retention level when prices are falling? A lot of your peers in the market seem to be increasing reinsurance because the prices are lower. And do the conclusions of the big strategic review, therefore, now rule out any major reinsurance changes in the next few years? Or would you rather maintain flexibility?

Yes. Look, I think the really important point to get across on reinsurance is that it is a bifurcated market nearly. So absolutely, main cat covers very constructive market. Prices did reduce, and there's a lot of capacity, a lot of interest, a lot of appetite, et cetera, and so we benefited from that. And so we did benefit from that. That's an element I spoke about in terms of that improved outcome there. But the -- in order to reduce the retention of [ more ] risk, we're then getting into the aggregate cover part of the market effectively. That part of the market, that, for us, sits below the $350 million exposure.

That part of the market is quite different. So it is more constrained, more limited counterparties, less appetite, in our view, very expensive. The capacity has increased a little bit. There are a few more players interested, et cetera, but it hasn't fundamentally changed the level of attractiveness for us for that market. So it comes down to pretty simple economics around it.

In terms of the future, we are open minded to all things reinsurance. We'll continue to explore all things reinsurance, but our framework that I outlined around optimizing capital, importantly, relative to our cost of equity and optimizing it for volatility for long-term shareholder value creation will stay the same. And if opportunities to deploy more reinsurance fall within that framework, we'd absolutely look to deploy them. So if rates do continue to soften as we expect they might, that may well lead to some future opportunities as well.

I just want to add quickly, I mean, like the point very clearly, that there is no philosophical objection to any of these mechanisms. And the ability for us to leverage others' balance sheet to our benefit is always going to be part of our annual reinsurance discussion. So either at the Board or at management or anywhere else, we're not philosophically opposed. We just need to see it work constructively for our shareholders.

Okay. And just one more on capital. I think the CET ratio post buyback is 1.06. Can we take this as a sign that you're willing and comfortable to move to the lower end of the target range?

So the CET1 post buyback at the group level will be well above the 1.06. It will still be towards the top end of the range, slightly above the top end of the range, which is 1.35. So you might have the GI capital ratio. I think it's better to look at the group ratio. We will still be above the top end of the range post the buyback. And to the point we made a couple of times, part of the reason for that is the buyback is about the maximum amount we can do in a 12-month period anyway.

Michelle?

Michelle Leong, Australian Ethical. Can you please let us know -- I know you want to target organic growth, but there have been a couple of inorganic opportunities that a peer has taken. Did you look at those opportunities? And are you able to comment as to why that didn't suit your profile?

Well, I can confirm you would expect us to look at those opportunities. We've got a very good investment banking panel who will always bring these things to us. So we did look at them. And I'm not going to go into the pros and the cons of what we saw and what we otherwise put into our decision-making, but they weren't appropriate for us. We didn't feel that they were critical to -- critical enough to embark upon. As I mentioned in my presentation, our bias is to organic growth. That doesn't mean where assets can, like the reinsurance discussion we have, we're not philosophically opposed to doing something in inorganic sense, but it has to reach a number of different thresholds.

But having seen those acquisitions play out, knowing where they're going to be playing out, I think our process now is to build our firepower and direct our firepower into those areas where those assets are being managed within the portfolios that they're moving to and see if there's opportunities for us to grow organically out of what inevitably will be some disruption.

So I'm not going to go into the reasons why we did or didn't -- we certainly did have a look, while we didn't participate. But we think we've got huge opportunity organically. We're in the middle of a big core system redesign. We've got AI opportunities that are available to us right across the business, and that's our focus at the moment.

And should we expect if the environment turns competitive that you would act like you did in the third quarter, maintain your margins and potentially reduce your GWP growth guidance if that was to happen?

Well, obviously, we disclose as would be appropriate at the time. We've done a lot of work on our -- obviously, our forecasting in our outlook. Our philosophy is obviously to manage price and volume to maintain margin but to get appropriate level of growth across the portfolio. I think we've got -- as I mentioned, we've got the distribution firepower through our multi-brand strategy, the bias that we have to digital but also the efficiencies that we're seeing coming through the business to be able to offset the competitive dynamic, grow sustainably with -- in line with system or slightly ahead in some portfolios but maintain that margin outlook at the top end of the range.

We've got all the tools we need. So I wouldn't anticipate that outcome. But again, I'd make the point constructively that we will always focus on making sure that we're covering the cost of inflation with our pricing, and we're maintaining the margin that we believe is appropriate across the portfolio.

Okay. We'll go to the phones.

[Operator Instructions] Your first question comes from Julian Braganza from Goldman Sachs.

Just the first question on the reinsurance renewal. Can you maybe talk about the nature of the -- just the profit share arrangement that's been structured over 3 years. And also just what's been factored in your guidance just for profit share that could be earned? Yes, just keen to understand how that's playing out in your numbers over the next 3 years.

Yes. So look, it is a -- it's formed this -- an expectation of multiyear. There is a profit share. Obviously, there's commercial sensitivity around the exact details of it but upfront premium with an expectation of profit commission. And there is an expectation of profit commissions. So as we said, our natural hazard allowance on an expected basis, yes, we would expect an ordinary course of events to get the profit commission or at least get some profit commission on that arrangement. We have factored some of that into the underlying ITR outlook as you'd expect, but it's a pretty modest amount.

Okay. And approximately, how much would that be, tens of millions or is it...

I just think we'd just leave it for the moment at a modest amount, yes. It's modest. It's not a material driver to the underlying ITR outlook.

Okay. That's clear. And then maybe just to help us understand the resilience, what would theoretically be the best estimate sales allowance? Or what would your margin have been had you adopted a best estimate view of allowance? How should we think about that?

So I didn't -- maybe if you could just repeat that, Julian, I didn't quite get it.

Yes. Just to understand the [ sales ] budget and how much resilience can be built into it. If you were to take a more 50-50 kind of view on your [ sales ] budget in terms of efficiency, where would that have kind of landed? And what would your margins sort of '26 have been had you taken a more best estimate view of the budget for '26?

Yes. So I think the question is how much is the resilience buffer impacting upon margin. If we hadn't put the resilience buffer in, what would the margin have been?

Thanks, Julian. Sorry, the line is not great. So I just said before that the additional resilience that we've put into the natural hazard allowance beyond what we would have ordinarily done is about $100 million. So I think there's a sort of a neat little picture in the analyst slide presentation that shows where we expect the FY '26 margin to be, which is in the top half of the range. If you were to add -- simply add $100 million onto that -- back into that underlying ITR, that would be where we would have arrived at in terms of underlying ITR without the added sufficiency and it would have been well comfortably above 12%.

Got it. No, that's super clear. And then just a question on the volume growth. Just keen to understand sustainability of the volume growth that's coming through in the fourth quarter and just contextualizing that into what may have been assumed in guidance. Just noting that you're kind of starting to reinvest some margin or some of the reinsurance benefits in price. I just want to understand where is the sort of sustainable level for volumes and what that would look like in 2026?

Yes. Look, conscious at the second half, we obviously don't report across the portfolio by quarter. But the second half growth was across the portfolio, 3% or 4%. We're guiding to that mid-single-digit number. The team has just been through where each of the portfolios sit. But I think across the board, we feel pretty confident that, that is the right outlook for us.

In the Consumer portfolios, we do expect to continue to see rate going through those portfolios -- going through Home in response to that fire and water, for example, in response to some of that natural hazard allowance, albeit with some offset from reinsurance. So we continue to expect to see rate needing to go through Home.

I spoke about Home margins needing to remediate to the target range. In Motor, a different story, margins are above where we need them to be. We would expect to get some unit growth come back into Motor. We're starting to see that in Q4 and into the first 5 weeks of FY '26.

In New Zealand, we have -- they started the cycle a bit earlier, and at some point, we would expect that cycle to reach bottom. And so we'll expect to see some turnaround in New Zealand, also some turnaround in Consumer, particularly in the AA portfolio and unit growth there. Now we've seen the price changes. We've got the benefits of the digital policy admin system coming in.

And then as Michael said in the Commercial portfolios, we've got rate coming through, very clear rate now coming through CTP portfolios, which, by the way, has been a reasonably significant depressor of our margin in FY '25 that should come back. We've got the benefits of the investment we've made in Vero specialty lines coming through as well as various rate coming through other parts of the portfolio.

Okay. No, that's clear. And just one last question for me. In terms of -- Steve, you mentioned potential for M&A if there is a sort of stressed asset given the rate environment. Just strategically top down where would that be. Is that to accelerate your Commercial growth strategy? I know you mentioned that would be organic. But where would that -- how should we think about that?

Look, I wouldn't rule anything out, obviously, but given the nature of the market shares that we've got in these portfolios, as you would expect, the priority to be Commercial, New Zealand then Consumer.

Your next question comes from Simon Fitzgerald from Jefferies.

So just to begin me, Steven, I don't know that you touched on -- we're going to talk about this at the upcoming Investor Day. But I just wanted to get a little bit more clarity if you had any early anecdotes. I think last time, you talked about getting greater data clarity to more discriminately price for risk at a more micro level. And I was just wondering with the work that you've done, thus far, how you're sort of feeling that will pan out and what sort of early anecdotes you might have on that.

Well, I'm going to get Adam to come up, our CIO, who's obviously got good line of sight to some of the things that -- both through his position on the Board of AAI in terms of both the platform modernization, the Duck Creek deployment there but also some of the benefits of AI that we've already seen through the deployment of the 100-odd use cases that we've got in place without sort of going all the way down the path of what we'll talk about at Investor Day.

Yes. Thanks, Simon, for the question. So yes, at the investor update we gave in November last year, we kind of talked quite broadly about the 2 pillars of our strategy around platform modernization and AI and particularly the impact on our transformation agenda across the operations. We started with the New Zealand joint venture, AA Insurance. And back in April, we launched our new Digital Insurer platform. We talked about the policy admin system, but it was a lot more than that. It was a new pricing capability, new digital front ends and kind of integration into the broader ecosystem. And we've started to see some early benefits from that already in AI as Jimmy and Steve talked to. So we're seeing better strike rates in our digital channels for sales of Motor and Home. We've seen almost an elimination of manual underwriting referrals in the business. So they're all automated, the speed to competency for our contact center staff a lot quicker and just broad efficiencies across the business.

So that kind of gives us some early indications of the opportunities that we see. New Zealand also moving to more risk-based pricing across their portfolios in that direct consumer business. So that's the kind of the foundations that we've built already, and we develop on that as we take that capability into our Australian Consumer businesses and then incrementally across the other portfolios over time. So that's a little bit of color on the platform agenda.

And then on AI, we have a few data points in the presentation that Steve gave. We're starting to scale out those use cases across many different parts of the enterprise. Again, we'll start with the customer outcomes as the first and foremost agenda that we're driving there, but we are seeing improvements in productivity and efficiency as we roll those out and just starting to see the momentum of that growth quite significantly as we look to the future. So that's a quick set of highlights, Steve.

Thanks, Adam.

Great. And just one more question just around the mark to markets, Jeremy. Specifically, can I take the sensitivities that are disclosed in the investor pack and apply them to the ending value of the portfolio? Just at $152 million, if I look at the 82 basis point change on the 3-year risk-free rate, at the 2.7 million market, it should be closer to 220. And I understand that doesn't include New Zealand -- it's just the AU business, but just wondering any comments there.

Yes. I mean a couple of facets to that. So the sensitivities are a parallel shift, and they have pointed to a specific duration. Obviously, the actual duration of the portfolio is a little bit different. There is an approximate guide. So it's an approximate guide. They should hold. But maybe we can sort of get into a bit more detail offline on that.

Your next question comes from Siddharth Parameswaran from JPMorgan.

A couple of questions if I can. I was hoping to just ask about the inflation environment that you're seeing in your assumptions around inflation into next year. I think you did make the comment that you're seeing moderating inflation. But your charts suggest at least home cost inflation is rising. Motor is moderating. Maybe if you could just put some numbers to what you're seeing in Australia in the Commercial business and also in New Zealand and what you're expecting going forward.

I mean, I might just talk to the factors and get Jeremy to put some directional guidance around it. But obviously, as I talked about in, I think, Kieren's question earlier, the motor dynamic is very much one of supply chain availability and repair shop labor capacity, and that's freed up quite materially over the past 6 to 12 months for the whole industry. And so that's driving alongside the competitive market, the reductions in motor, which are to be expected.

On the home side, the macro factor is, obviously, you've got the reinsurance costs coming down, replaced somewhat by the natural hazard increase that we're putting through the portfolio. And then the fire, lithium-battery-inspired fire claims, severity and then the water. As I mentioned, we've got our home repair business. We set that out on a broad-based trial across Australia in terms of 1,800-odd properties to understand the quality of the flexi piping in those homes, and we found that up to 30% of the homes that we inspected had somewhat deficient flexi piping that needed to be repaired and then also issues with water pressure, which obviously goes to the potential for those pipes to burst.

And we're also predicting very clearly that based off some of the government research that it'll be 33-odd individual lithium batteries in every -- on average in every Australian home by next year. And obviously, as the government subsidies for the in-home batteries off the back of the solar panels starts to roll out, there'll be more.

We are seeing, in terms of water, escape of liquids, higher frequency and then higher claims cost. And that goes -- sits alongside some of the factors of the way the buildings are constructed, homes are constructed, open plan living, et cetera. And on the lithium battery elements of home fire severity, you're seeing the lithium batteries create an accelerant for larger scale damage, which -- these are issues that we can price for and we are pricing for, but they're issues that I call out industry-wide, but I do call out as being factors that we really need as an industry to raise awareness of in consumer, in the consumer dialect to make sure that they're understood and that insurance is one element of this, but safety is another one. So they're the high-level comments.

Yes. Just sort of to put some dimension around it, so the -- for Home, inflation last year was in the high single digits. And obviously, that's off the back of what Steve's spoken about with the fire and water. But equally, we had a reasonably large increase in natural hazard allowance last year as well in Home. So it's high single digits. We would expect that to come down to lower than that in FY '26. Similar sort of trends around the pricing around fire and water. Natural hazard allowance has obviously gone up, but we've had quite a significant benefit coming through reinsurance. But having said that, from a price perspective, we still need to make sure that Home gets back to within its target margin ranges having had that fire and water experience.

And then in Motor, Motor inflation last year, cost per policy was running in that sort of mid-single digits, slightly above the midpoint of the mid-single digits. Again, that's just inflation in the repair chain that has moderated quite significantly, but we have seen some price increases in parts and paint, probably less so labor. And we'd expect the inflation in Motor continue around that mid-single digit for outlook.

Commercial is more in sort of large loss space and it's been reasonably benign in Commercial and obviously, in CTP. The issue in CTP has really been around New South Wales and Queensland loss ratios for us, which -- both of which we think are somewhat industry related, but the important thing with those schemes is that we're now getting price through to respond to that.

Sorry, and the other question was just on New Zealand because we've seen some sharp drops in GWP in the second half. I was just wondering what's happening in inflation pricing and just what you're assuming for next year.

Yes. So again -- sorry, Sid, New Zealand Consumer inflation is reasonably benign. We're sort of talking in that low single-digit number for inflation across Home and Motor. Commercial has been reasonably benign as well, and we'd expect that trend to continue into FY '26.

And the only other dynamic, Sid, in New Zealand is that, obviously, it's -- we write different business in New Zealand than we do in Australia, and we do write significantly higher up the commercial stack than we do in Australia. And when you find you do that and particularly if you're underwriting and insuring some government assets, government infrastructure assets in an environment of significant increased pricing, you often find that the capacity of governments and others to take some of the risk back on their own balance sheet is more amplified. So we have seen that dynamic as well in terms of foreign capital coming in, creating a competitive environment at the top end but also those risks in force at the top end, choosing to take more of the risk back to their own balance sheet.

Yes. Okay. No, that's very helpful. Just one final question on New Zealand, where, as I mentioned, it does seem like the second half was quite weak in terms of premium growth. I mean you flagged it is Commercial that is a big driver. But just the turnaround you're expecting into FY '26, it does seem like, if you're assuming mid-single-digit GWP growth for the group, there must be a reasonable contribution from New Zealand. Just are there any signs of -- can you help us, I suppose, understand some of the signs of a turnaround that you expect either on units or on price?

Yes. I mean I might start and Jeremy and Jimmy, who -- mess it up, you can come up and clean it up. But on the AAI business, obviously, that is a powerhouse. It's a powerhouse across almost every dimension you look at from Net Promoter Scores all the way through to unit count and otherwise in the New Zealand market. We did put the Duck Creek PAS into AAI during the second half of this financial year. And inevitably, when you put a new core system in, you just have to slow the engine down for a period of time while you go through that process. That's all done now. We're through the back of that, and we're seeing the unit count start to normalize back to predeployment levels. That's one factor.

Yes. I mean, look, the -- it's a story of the 2 portfolios, Consumer and Commercial. And as Jimmy has said, I would say, is the Commercial portfolio is very diversified for us and operates -- has different dynamics across different components of it. But we did have a negative, as you can see in the pack, growth number for New Zealand in the second half. But in terms of the context of that mid-single-digit growth for the group for FY '26, we're expecting New Zealand to return to low -- reasonably low single digits. So we're not expecting a massive growth outcome for New Zealand in FY '26. But we're expecting a slightly flatter outcome in Commercial and improved unit count in Motor, particularly through the AA portfolio into FY '26 off the back of the DI implementation and the moderation in inflation and pricing changes that have already been made.

Jim, here's your chance to upgrade your outlook.

This is my chance to stuff it up. No. Look, in addition to all of that, I guess, I think, I mentioned earlier that we did see at a market level, a drop in sums insured for vehicles in the second half. And so that obviously goes to premium as well. There was more competition coming in certainly off the back of the pricing increases we put in 12 months, 18 months ago. A lot of the local competitors are starting to reprice, and so we had to be very attuned to that to make sure that we're not losing new business and we're retaining good risk. So that's another factor in the Consumer side.

On the Commercial side, as I said earlier, the premium impact, higher retention points, non-buys, foreign capital and our response to that is make sure that we want to renew the risks at the expiring terms and hopefully at the expiring price. But if we have to adjust price within our margin tolerance, then we will, which will impact -- which did impact premium in the second half.

The outlook for '26 on Consumer, it's still to grow units. We still see opportunity to grow units in New Zealand on the Commercial book, both in Motor and Home across direct and intermediated with the pricing in line with inflation and of course, indexation coming through. And on the Commercial front, we write through the full stack of Commercial specialty lines, liability, corporate, marine, then mid-market, rural, CMV. And all of those portfolios respond differently to the segments that they're in, whether it be construction, which is deflated. Agriculture is growing. So they'll all have a different profile relevant to that market in terms of margin and growth, but net-net, overall, for Commercial, reasonably flat.

The only thing I'll pick up on the inflation side of things, that, correct me, when you look at corporate, high in a [ ton ], $100 million assets and above. When you look at inflation outlook and it's depressed, that depresses the property replacement values as well, which then goes to premium. So that's the other factor that we look at when we renew corporate property prices in terms of the forward outlook on valuations.

Your next question comes from Nigel Pittaway from Citi.

First of all, if you could maybe just -- so you've given us low single-digit New Zealand. So just breaking up the mid-single-digit GWP growth for the group as a whole, obviously, you flagged the significant CTP price rises in Commercial. So are we expecting slightly higher in the mid-single digits in Commercial and slightly lower in Consumer? Is that -- is that an accurate representation? Or how does it break up?

I think it's sort of slightly above the mid-single digits in Consumer, which is sort of on track with what we've been doing in Home. So the trajectory in Home would sort of very much support that. We are expecting a little bit of -- a little bit more unit count in Motor. Again, the trajectory we've seen in Q4 and the 5 weeks so far would support that. And then in Commercial, we're seeing a little bit above the midpoint of the mid-single digits as well, and a lot of that's driven out of the expectation that the -- those parts of the market that have been under pressure around commercial property and financial lines will continue.

But we are expecting obviously improved outcomes from CTP, and CTP is a reasonable component of our GWP base in Commercial. And then those other attributes, we spoke about things like growth in Vero specialty lines.

If we go any further, Nigel, we'd have to give you our budget. So we'll draw a line there if we can.

Okay. Fair enough. Yes. Okay. So maybe just focusing a little bit on CTP. I mean, obviously, this frequency in New South Wales has continued. Have you got any closer to the underlying cause of that in terms of increased New South Wales CTP claims frequency?

I'm going to get Michael to come up because I'm not sure that I can nail the answer. We've been trying to work our way through. I mean I've got a few thesis about it, but I best hold on to myself and let Michael like Michael.

Yes. Thank you for that. So Nigel, it's a long-tail scheme. So what we do know is that frequency for the scheme is up, and so we can see that. And we can see some common law coming through as well. And so -- well, there's no -- we can't see any one causal link. I think the scheme has reacted whether it is advertising, whether it is the propensity of the claims increase from advertising, from lawyers or the like, I'm not sure. But I know that it is a focus for the New South Wales regulator and for us. So hope that's helpful. But in the short term, we've reacted very quickly on price, and if you look at the price disparities at the moment, we've acted quite quickly compared to some of our competitors.

I'll just add, Michael, that the -- we're pretty confident it's an industry issue. So we've seen others respond in pricing. And the other dynamic that's sort of been coming through is that there were some scheme changes a couple of years ago that has extended benefit profile for claimants. And so that's starting to come through the portfolio now as well.

Okay. And then maybe just finally, I mean, obviously, you mentioned the $100 million you built into the resilience in the cat allowance. I mean, is that enough? Or do you think you'd be tempted to put away more if -- in future periods?

Well, we think the extra $100 million, I'd say, a significant amount of resilience to natural hazard allowance, and you'll see the numbers I put up there around the [ 7 and 10 ] and [ 4 and 5 ] and the $1.5 billion surplus over the 10-year period, acknowledging that 10 years is not a full natural hazard cycle, of course. And so we're pretty confident around that level of resilience. But if the opportunity were to arise, then we would never say no, but I think we're pretty confident and comfortable around the level we've got at the moment.

Your next question comes from Andrew Buncombe from Macquarie.

Congratulations on the result. Just the first one is in relation to capital. You've got $250 million of debt expiring in December. You've got a strong capital position. Can you just give us some color around what your intentions would be for that as it expires? Would you intend to renew it or pay that down?

Thanks, Andrew. I mean as you'd be aware, I think we're not really able to give views on what our intention is around those notes. I don't think our regulator would be very happy with that process. So we're not able to do that but to say that our capital beyond the CET1 position, we still retain some of that stranded funding capital from the bank sale residual as well and that we'd look to deploy capital efficiently across the group and obviously, as well as the CET1 requirements, the Tier 2 and AT1 requirements will continue to grow as the business grows. So we'll look to deploy all that capital efficiently, but unfortunately, I can't give you a specific view around what we'll do with the notes that are coming up for early redemption.

Yes. Second one, maybe a bigger picture strategy question. In the last 12 to 18 months, we've spent a lot more time talking about your aspirations for growth in the commercial business division. Over the last 6 to 12 months as the premium rate cycle has continued to soften, I'm just interested in how you think about that strategy over the medium term given what's happening with the cycle?

Yes. I mean, Michael, you might want to come up as well. But look, we are incredibly excited about the performance of our Commercial Insurance business and Michael and the team's leadership of it. I think the discipline that you've seen from us in the commercial space for the past 5 or 6 years has put us entering this cycle in an incredibly strong position with margins ahead of target, and that gives us a huge buffer as we work our way through this part of the cycle.

In addition to that, the team have also developed a range of new products that I think we've already introduced to the market to good effect. The business is so well placed in terms of the broker, the Vero broker positioning, also the claims processes that sit behind it, which we've won consecutive Mansfield Award, I think, 5 or 6 years in a row. So I think -- and why I put commercial at the top of the queue in terms of any inorganic activity, I think we have a 8%, 9% market share, I think, now an aspiration to grow that business both organically and potentially inorganically over time.

And I just believe that as this cycle starts to work its way through at any point from halfway through the cycle through to its full conclusion, there will be opportunities that will emerge. And again, I think this business is in pretty good shape to at least consider those opportunities and put our framework around that to good test. Mike?

Yes. And I think, look, just a couple of comments to add to it, clear aspiration to grow Commercial, but we're very cognizant that we need to be disciplined. The worst thing you can do is try and grow a commercial business into a soft market. So say it at the beginning. But it's a long-term proposition. So the fundamentals are technology and people. Specialization is so important in commercial. It's around product breadth, having really good underwriters, knowing what they do really well. So we've invested heavily in our people. The technology stack that's coming through for commercial will give us a huge leap, and that will be over the next couple of years. And we are on old technology at the moment, so very excited by that and AI as well.

And then the big thing there is around our customers and our brokers. Our proposition has to be first class. Our NPS has been increasing over the last couple of years. If I hark back to the Investor Day last year, you saw that graph. I'm very, very proud of it. And Steve, I'm sure you know it's 6 Mansfields we've won in a row for our claims service, and we're very proud of that because that is -- particularly with the brokers, they do that time and time again. You get that working really well. It plays to our proposition. So I think that focus on that community and the broker partners is a big part of it.

And then connectivity, again, our brokers are using platforms. We've got to connect to those, very strong on the technology side. And lastly, the new product. We want a breadth of product. We want to specialize. We want really good underwriters, and we want to give our broker partners in Australia what they need and not go offshore. So I'm very confident the ground works there, but you've got to pick your time as well, Andrew. And I think that's really important.

Great. And then just a final one for me, maybe for Jeremy. You've increased the hazards allowance again above the pace of volume growth. How should we be thinking about the half-on-half delta for the underlying ITR driven by that hazards allowance change?

I think, Andrew, that we wouldn't expect to see that come through the half-on-half too much. So the hazard allowance won't be perfectly phased 50-50 half-on-half. And so I think we will see -- you shouldn't see first half -- the usual first half, second half margin drag from that change.

Your final phone question comes from Andrei Stadnik from Morgan Stanley.

Can I ask my first question around customer use of deductibles and also trends in sum insured. Like you called out in New Zealand and saw lower sums insured in the second half. But what are you seeing in Australia? So in terms of sum insured and also in terms of how customers are using deductibles.

Yes. Lisa's on her way up now.

Andrei, in terms of sum insured and excesses, I'll start with excesses first. So we have continued to see customers choose higher excess. It probably goes up about 10% year-on-year from our customers. And that's probably a little bit more in Home than it is in Motor. In terms of sum insured for the Home portfolio, we obviously do put some sum insured inflation that we're seeing in the portfolio, and that automatically flows through on renewals unless our customers give us a call.

We do -- one thing we have done throughout the year is invest in digital tools to enable our customers to look at things like what would happen with an excess change to their premium or a sum insured change. However, what I would say is we do have caps and collars on some of those sums insured as well.

That's very helpful. And my second question, kind of leading -- would be my final question. Leading into that tech side as well. Can I just go back to that third quarter slowdown in volumes? So in terms of [ a quarter ] dip in volumes in Consumer, can you talk a little bit about maybe which brands might have been impacted more relative to other brands? And then you mentioned that search, Google Search advertising spend would increase in the fourth quarter. Was that one of the key drivers of the turnaround in the fourth quarter?

Look, I don't know that there's any particular brand that I would call out. I think it was broadly -- I mean we do price this portfolio in aggregate. We don't price specifically by brand. Then, we use the multi-brand strategy to differentiate and segment as appropriate. So I wouldn't call out -- I mean, obviously, New South Wales has been an incredibly competitive market, and I think we're seeing that. So if there was a disproportionate or one brand that's, of course, slightly ahead of others, would be GIO in terms of some of the competitive pressures in New South Wales. But I don't think you could isolate any one particular brand as being more impacted by it than any others.

And in terms of search engine marketing, look, it's a factor that we deployed proactively into Q4 to get some more momentum into the portfolio. But it's one of the tools. It's only one of the tools. So obviously, once we felt that we had established a reasonable platform for where inflation was heading, once we've got line of sight to our reinsurance renewal, which we did obviously through February and March, that gave us a lot more confidence as to where inflation was tracking and gave us an ability to reset the pricing.

So pricing is obviously a tool. Digital is also a tool. And then obviously, search engine optimization, marketing is the third string to the bow.

I think, Kieren, you had a final question in the room here.

Yes. Just a final question on the investment portfolio. You flagged a strategic asset allocation review. We've seen ILB carries, I think, probably in the second half inch negative and you've trimmed exposure there. How meaningful will the asset shift be? Are there any impacts on PCA as you trim ILB? And what's your outlook for your underlying yield next year?

So the ILBs, I need to be careful flagging what we might be doing in trading in a [ fit ] market and that stuff, but it's probably something like getting on for half what we have today. The logic around it is not around where we think inflation markets are going because we don't invest in inflation-linked bonds as a punt, if you like, against inflation. It's there as a hedge against inflation. And over the years, the profile of our portfolio has changed. And so a reduced exposure to inflation-linked bonds is supported by the logic of we just need less inflation hedge in the portfolio. So it's not taking a view on rates per se, but the timing of when we would do the reduction would take into account our view on when is the right time to do it.

Yes, there will be some impact on PCA from that. As I sort of flagged, we probably expect most of that to go into structured credit. So there would be a relatively modest capital impact from that. And in terms of go-forward yields, you can have a look at the exit yield rate for FY '25. It will be substantially lower than the average for FY '25 purely because the yield curve has come down.

So our yield would be we are exposed to the 2.5-ish, 3-year yield curve. 60-odd percent of the portfolio now going to 70% would be invested in credit, and then we'd expect to get some fairly neutral on inflation carry. And we'd expect to continue to get some manager alpha.

Okay. I think we're right to wrap up. Thank you, everyone, for coming along in the room here and also online, and we look forward to seeing many of you in the next 2 or 3 weeks. Thank you.