Suncorp's first half profit has dropped 16 per cent to $530 million due to the cost of settling natural disaster claims in NSW and Queensland.
The Brisbane-based insurer on Thursday cut its interim dividend from 38 cents to 30 cents per share after net profit for the six months to December 31 declined steeply from $631 million for the prior corresponding period.
Suncorp's shares fell in response during early trade. The stock was 37 cents, or 3.5 per cent, lower at $10.33 by 1016 AEDT.
Underlying insurance trading ratio (ITR), a key measure of profitability, dropped from 14.8 per cent to 10.1 per cent, as predicted in December's downgraded guidance.
Chief executive Michael Cameron, who only took over from Patrick Snowball in October, said he is working to address both environmental and operational factors with a view to reversing the decline.
The $13.8 billion company, which owns brands including AAMI, Apia and Vero, is still targeting a full year underlying ITR of at least 12 per cent.
"My number one priority has been resolving these issues. We have moved quickly with an intervention strategy designed to restore performance," Mr Cameron said in a statement.
"Our target is to deliver lower working claims costs, which together with other initiatives, will drive a higher underlying ITR for the full year."
Suncorp's share price has dropped about 22 per cent since the start of December to $10.70 at the close on Wednesday.
Net profit at the group's Suncorp Bank unit rose 10.2 per cent to $194 million.
Home lending increased 8.2 per cent to $43 billion, with 60 per cent of new business coming from outside the bank's traditional Queensland market.
SUNCORP'S FIRST-HALF NUMBERS
* Net profit down 16 pct to $530m
* Revenue down 7.9 pct to $7.797b
* Interim dividend down 8.0 cents to 30 cents, fully franked
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