Suncorp said that it has started reaping the benefits of its Business Improvement Program (BIP) and increased investment in digital technologies.
The financial services company last year unveiled the BIP which it said would deliver material reductions in its cost base as well as improved customer experience through “operational excellence, removing pain points and designing innovative customer solutions”.
Today Suncorp said the program had delivered a net benefit of $40 million in FY18 — four times its target — on expenditure of $104 million during the 12 months to 30 June.
Reducing the cost to serve customers through improved digital capabilities was a key focus of the program during FY18, with the financial services group also investing in sales and service channel optimisation, end-to-end process improvement, claims supply chain re-design, “smarter procurement” (including a review of its technology partners) and streamlining the business.
Over FY19 the company said it would invest a further $22 million in its digital and self-service capabilities for customers as part of the program; in total it expects BIP benefits of $274 million on a $79 million spend during the year.
During FY18 Suncorp invested $146 million (pre-tax) in its marketplace program, building a digital hub connecting Suncorp’s network of brands.
As part of the program Suncorp launched its new Suncorp App and online portal, giving customers a single place to manage their relationship with the group’s brands.
Suncorp said that a significant part of the “one-off” investment in the marketplace was in an API layer to act as foundational infrastructure. That API layer “is key to facilitating future enhancements to customer experience such as open banking,” the company said.
“The one-off investment in the acceleration of the marketplace component of the strategy will increasingly deliver value to all stakeholders,” Suncorp CEO Michael Cameron said in remarks prepared for today’s full year results briefing. “The program was delivered on-time and on-budget.”
Other initiatives include launching its Suncorp loyalty program, rolling out a brand refresh, releasing seven bundled “integrated offers” to customers, and introducing a range of “adjacent offers” with third-party providers including conveyancing, home maintenance and car buying.
The Suncorp Reward and Recognition program has more than 400,000 users and has delivered a 3 per cent uplift in products per customer and a 1.7 per cent increase in customer retention.
Suncorp reported a 1.5 per cent drop in net profit after tax to $1.06 billion. Cash earnings were down 4.1 per cent to $1.1 billion.