SUNCORP GROUP LIMITED — Investor Presentation 2015

Aug 3, 2015

1

Suncorp Group Limited

==> picture [130 x 40] intentionally omitted <==

~~Suncorp Group Limited~~

4 August 2015

2

Suncorp FY15 results presentation

Introduction 1 Patrick Snowball

Conclusion 3 Patrick Snowball

2

CFO report Business NPAT | Group capital | Outlook Steve Johnston

Q&A 4 Suncorp Leadership Team

~~Suncorp Group Limited~~ 4 August 2015

3

==> picture [425 x 242] intentionally omitted <==

Introduction

Patrick Snowball Suncorp Group CEO

~~Suncorp Group Limited~~

==> picture [130 x 40] intentionally omitted <==

4 August 2015

FY15 result overview ($m)

	FY15	FY14	%∆
General Insurance NPAT	756	1,010	(25.1)
Bank NPAT	354	228	55.3
Suncorp Life NPAT	125	92	35.9
Business lines NPAT	1,235	1,330	(7.1)
Other	(44)	(26)	69.2
Cash earnings	1,191	1,304	(8.7)
Life Insurance write-down	-	(496)	n/a
Other profit and acquisition amortisation	(58)	(78)	(25.6)
NPAT	1,133	730	55.2

4

~~Suncorp Group Limited~~ 4 August 2015

5

Suncorp Group business line NPAT ($m) Profit diversification

==> picture [681 x 268] intentionally omitted <==

----- Start of picture text -----

FY12 FY13 FY14 FY15
770 600 1,330 1,235
8
12
105
883 1010 756
493
113
146 120
84
289 289 228 354
(263)
(632)
General Insurance Bank
Life underlying NPAT Non-core Bank
(60)
Life market adjustments
----- End of picture text -----

~~Suncorp Group Limited~~ 4 August 2015

Dividend

38 cent final dividend and 12 cent special dividend

==> picture [682 x 264] intentionally omitted <==

----- Start of picture text -----

Special dividend
Final dividend
Interim dividend 30
12
20
38
40
15
30
20
20 20
38
35
25
20
15 15
FY10 FY11 FY12 FY13 FY14 FY15
----- End of picture text -----

6

~~Suncorp Group Limited~~ 4 August 2015

Top line growth Growth in key target segments

==> picture [720 x 340] intentionally omitted <==

----- Start of picture text -----

1.9%
-0.5%
Short tail GWP Long tail GWP
2,041
6,722 6,690 2,003
6,391 1,911
5,842 1,810
FY12 FY13 FY14 FY15 FY12 FY13 FY14 FY15
Bank lending 3.9% Life individual in-force policies
5.6%
51,918
49,956 900
47,463^ 852
785
722
43,356^
FY12 FY13 FY14 FY15 FY12 FY13 FY14 FY15
7
Excluding Fire Service Levies
Suncorp Group Limited ^Core Bank lending only.
4 August 2015
----- End of picture text -----*

Underlying and Reported ITR Building Blocks and Simplification continue to deliver

==> picture [690 x 272] intentionally omitted <==

----- Start of picture text -----

Underlying ITR Reported ITR
18.6%
17.0%
14.0% 14.8% 14.6%
13.6%
13.1% 13.4%
14.7%
10.5% 11.2% 11.1%
13.9% 12.8%
11.1%
10.9% 9.9%
7.8%
3.8%
1.9%
1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15
8
----- End of picture text -----

~~Suncorp Group Limited~~ 4 August 2015

Group operating expenses Less than 1% annual increase

Life Bank General Insurance

==> picture [683 x 210] intentionally omitted <==

----- Start of picture text -----

2,663 2,703 2,710
291 303 281
619 624 646
1753 1776 1783
----- End of picture text -----

FY13

FY14

==> picture [29 x 10] intentionally omitted <==

----- Start of picture text -----

FY15
----- End of picture text -----

9

~~Suncorp Group Limited~~ 4 August 2015

Customer

A strengthened customer franchise

Strong outcomes across the Group

• Industry leading satisfaction in key business lines

• 4 of the top 5 most advocated national insurance brands

• Improved retention

• Deeper relationships

• Attracting new customers

==> picture [205 x 85] intentionally omitted <==

Industry leading customer satisfaction

==> picture [331 x 222] intentionally omitted <==

----- Start of picture text -----

Industry average Jun 14 Jun 15
88
87
85
84
84
83
82 82
79
Motor Home Bank
----- End of picture text -----

10

~~Suncorp Group Limited~~ 4 August 2015

Optimised Platform

Unlocking the value of our 9 million customers

==> picture [680 x 267] intentionally omitted <==

----- Start of picture text -----

Connected customers
Simplified systems
BANK LIFE GENERAL INSURANCE CORPORATE
Underpinned by SUNCORP DATA
DATA LAKE
Business Intelligence SERVICES
Sitting within a
secure and scalable cloud CLOUD ENVIRONMENT
Supported by a unique
SERVICE RELENTLESS
way of working INNOVATION AGILE/ LEAN PARTNERING
CULTURE EXECUTION
----- End of picture text -----

11

~~Suncorp Group Limited~~ 4 August 2015

==> picture [425 x 242] intentionally omitted <==

~~Suncorp Group Limited~~

CFO Report Steve Johnston Suncorp Group CFO

==> picture [130 x 40] intentionally omitted <==

4 August 2015

13

Suncorp’s shareholder promise Simplified, de-risked financial services group

Yield

Growth

• Dividend payout ratio of 60% to 80% and return of surplus capital

• Organic strategy, focused exclusively in Australia and New Zealand

• De-risked and simplified business model

==> picture [42 x 42] intentionally omitted <==

• Efficiency-led profit growth

• ‘Above system’ growth in key markets

• Multi-brand, multi-channel approach leveraging the Group’s 9 million customers

~~Suncorp Group Limited~~ 4 August 2015

14

General Insurance

$m

General Insurance profit after tax

Underlying ITR of 14.7% exceeding commitment to ‘meet or beat’ 12% Reported ITR of 11.4%

GWP up 0.1% with positive unit growth in Personal lines

% Δ

FY15

756 (25.1)

Reserve releases of $427 million Natural hazards $473 million above allowance

GI CET1 1.40x PCA

~~Suncorp Group Limited~~

4 August 2015

Gross Written Premium

Passing on efficiency benefits

Product	FY15($m)	%∆	Factors
Motor	2,770	(2.1)	Customer unit growth offset by reduction in average written premiums
Home	2,449	0.4	Targeted reductions driving high retention rates and moderated unit losses
Commercial	2,326	(0.1)	Disciplined underwriting and focus on margin
CTP	1,112	5.9	Good growth across Qld, NSW and ACT
Other	74	(5.1)
Total	8,731	0.1
Australia	7,526	(0.8)
New Zealand	1,205	5.7	2.9% in NZD terms

15

~~Suncorp Group Limited~~ 4 August 2015

16

Investment assets

Low yield environment reducing underlying yield

Insurance funds ($9+bn)

Shareholder funds ($3+bn)

• Investment income $399 million

• Investment income $163 million

• MTM gains of $176 million from decreases in risk-free rates

• MTM losses of $30 million from widening of credit spreads

• MTM losses of $56 million from decreases in break-even inflation

• Total returns on cash and interest bearing securities of $115 million

• Total returns on Equities and Infrastructure assets of $48 million

• Annualised return of 5.2%

• Underlying yield of 3.3% reflects low yield environment

Total investment income of $562 million – annualised return 4.4%

~~Suncorp Group Limited~~ 4 August 2015

General Insurance

Event costs for FY15

Date	Event	**Gross costs$m **	**Net Costs$m **
Sep2014	East Melbourne Storm	17	17
Oct 2014	SydneyStorm	22	22
Nov 2014	Brisbane Hailstorms	361	250
Dec 2014	East Coast Storms	34	34
Jan 2015	South Brisbane Hail	13	13
Feb 2015	Cyclone Marcia	149	149
Mar 2015	Narrabri Chinchilla Hail	33	33
Apr 2015	NSW Low Storms	250	135
Apr 2015	NSW ANZAC DayHail	84	62
May2015	QLD NSW Low Storms	55	52
May/Jun 2015	New Zealand events	28	16
	Other smaller natural hazard claims	285	285
Total		1,331	1,068
Less: FY15 allowance for natural hazards			595
Natural hazards costs above allowance			473

17

~~Suncorp Group Limited~~ 4 August 2015

New Zealand Earthquake

Good progress being made

==> picture [336 x 260] intentionally omitted <==

----- Start of picture text -----

Historical total claims development
$6bn
39k
$5bn
35k
$4bn
$3bn
31k
$2bn
27k
$1bn
$0bn 23k
Jun-11 Mar-12 Dec-12 Sep-13 Jun-14 Mar-15
Total Claims (NZ$) February 2011 Claims (NZ$) Claims Lodged (RHS)
----- End of picture text -----

Risk of further increases diminishing

• In total, $4.5 billion or 85% of total claims paid.

• Commercial claims: 92% contracted or settled with only five outstanding claims exceeding $10 million

• Residential claims: 77% of reported incurred claims cost paid, significantly higher than industry

• New Adverse Development Cover provides additional protection

18

~~Suncorp Group Limited~~ 4 August 2015

19

General Insurance reserve releases

FY15 net reserve release of $427 million or 5.4% of NEP

Building Blocks Simplification delivered one reduced legal claims system costs

Management have reduced settlements and duration

Absence of wage and superimposed inflation

Optimised claims processes

Reserve releases well above 1.5% of NEP

~~Suncorp Group Limited~~

4 August 2015

Underlying ITR and Operating Expense Ratio Building Blocks and Simplification continuing to deliver Underlying ITR Operating Expense Ratio

==> picture [690 x 239] intentionally omitted <==

----- Start of picture text -----

26.5%
14.7%
25.8% 14.3%
13.5%
12.1%
10.8%
24.0%
23.7%
9.0%
23.0%
22.6%
FY10 FY11 FY12 FY13 FY14 FY15
20
----- End of picture text -----

~~Suncorp Group Limited~~ 4 August 2015

21

Suncorp Bank

$m

Bank profit after tax

NIM improved to 1.85% Bank CET1 increased to 9.15% Home lending up 7.1% Business lending down 7.3%

% Δ

FY15

354 55.3

Cost to income ratio down to 53.4% Deposit to loan ratio 65.3%

Non performing loans down 20.1% Gross impaired assets down 34.5%

~~Suncorp Group Limited~~

4 August 2015

Suncorp Bank lending portfolio Conservative approach to growth

==> picture [681 x 261] intentionally omitted <==

----- Start of picture text -----

69% of business lending exposures
Lending assets $51.9 billion
<$10m
$50m-$100m
1%
Com/SME $25-$50m ,
9%
10%
(down 9.3%)
Housing 80% Agri $10-$25m 21% , < $5m ,
52%
(up 7.1%) 9%
(down 4.8%)
$5-$10m ,
17%
Consumer
1%
(down 11.8%)
----- End of picture text -----

22

~~Suncorp Group Limited~~ 4 August 2015

23

Funding and Liquidity Conservative balance sheet

Long term funding profile ($m)

==> picture [336 x 217] intentionally omitted <==

----- Start of picture text -----

1,200
1,000
800
600
400
200
0
Aug 15 Jan 16 May 16 Mar 17 Nov 17 Aug 19
Covered Senior Unsecured (Domestic) Senior Unsecured (Offshore)
----- End of picture text -----

Deposit to loan ratio

==> picture [300 x 160] intentionally omitted <==

----- Start of picture text -----

83%
71%
65% 67% 69%
61%
55%
SUN Regional 1 Regional 2 Major 1 Major 2 Major 3 Major 4
----- End of picture text -----

Source: Most recent company reports. Regional Bank data includes data for the Group, Major Bank data includes Retail and Business Bank divisions only

Suncorp Group Limited 4 August 2015

Credit quality Impaired and non-performing loans both down significantly

Gross impaired loans by segment

Total non-performing loans by segment

==> picture [682 x 217] intentionally omitted <==

----- Start of picture text -----

Retail Agribusiness Commercial (SME) Retail Agribusiness Commercial (SME)
258
154
206
125
99 95
193 226
67 199 160
62
208
182 162
125 409 392 332 362
28 26 33 31
Dec-13 Jun-14 Dec-14 Jun-15 Dec-13 Jun-14 Dec-14 Jun-15
----- End of picture text -----

24

~~Suncorp Group Limited~~

4 August 2015

Suncorp Bank lending portfolio Now significantly de-risked with 80% mortgage portfolio

==> picture [682 x 262] intentionally omitted <==

----- Start of picture text -----

2009 Lending portfolio 2015 Lending portfolio Portfolio
2009 2015
($54.4 bn) Summary ($51.9 bn) Metrics
Exposures
121 1
Com/ over $50m
SME
10%
Agri
6% Agri
9% Margin 1.68% 1.85%
Housing Com/ Housing
52%
Corporate SME 80%
& 10% Impaired
$1,474m $218m
Property assets
30%
Impairment
$710m $58m
losses
----- End of picture text -----

~~Suncorp Group Limited~~

25

4 August 2015

26

Suncorp Bank Contributing sustainable earnings to the Group

Key targets

Bank of the year

• NIM 1.75% to 1.85%

• Money Magazine’s “ Bank of the year”

• Retail deposit to loan ratio 60% to 70%

• Euromoney’s “ Best Bank in Australia”

• Drive the cost to income ratio towards 50%

• Sustainable retail lending growth of 1 to 1.3 times system

• Industry leading customer satisfaction

• A+/A1 credit rating

• Basel II Advanced Accreditation

• New banking platform – Project Ignite

~~Suncorp Group Limited~~ 4 August 2015

27

Suncorp Life

$m	FY15	%Δ
Underlying profit after tax	113	34.5
Market adjustment after tax	12	50.0
Life profit after tax	125	35.9

Individual in-force premiums up 5.6% Super new business up 23.4% driven by WealthSmart and Everyday Super

Claims experience $8 million favourable Lapse experience $7 million favourable

Strong growth in Direct sales via insurance brands

~~Suncorp Group Limited~~ 4 August 2015

Life rebased assumptions

15% Illustrative lapse example

==> picture [433 x 33] intentionally omitted <==

----- Start of picture text -----

Actual experience FY14 assumption Revised assumption
0.5%
----- End of picture text -----

==> picture [668 x 10] intentionally omitted <==

----- Start of picture text -----

2008 2010 2012 2014 2015 2018 2020
----- End of picture text -----

28

~~Suncorp Group Limited~~ 4 August 2015

FY15 CET1 movements ($m) Reduction due to increased Bank CET1 target

109 45 114 73 73 1,133 156 1,132 831 570 Excess CET1 NPAT Impact of Project Bank Target GI Target SGL & Life Growth & Other Dividend Excess CET1 30-Jun-14 FY15 Natural Hazards Ignite Change Change Target Changes Movements FY15 (ex div) on GI capital 30-Jun-15

~~Suncorp Group Limited~~ 4 August 2015

29

Suncorp Capital Ratios Strong General Insurance and Bank capital ratios

Bank CET1 ratios

General Insurance CET1 ratios*

==> picture [336 x 185] intentionally omitted <==

----- Start of picture text -----

9.15%
8.80%
8.70% [8.80% ] [8.87% ] 8.70%
7.92%
SUN Regional 1 Regional 2 Major 1 Major 2 Major 3 Major 4
Source: Latest published company reports.
----- End of picture text -----

==> picture [336 x 185] intentionally omitted <==

----- Start of picture text -----

1.40x
1.28x
1.04x
SUN Insurer 1 Insurer 2
Ratios listed relate to Prescribed Capital Amounts (PCA).
Source: Latest published company reports.
----- End of picture text -----*

Additional $320 million of capital held at Suncorp Group Limited

30

~~Suncorp Group Limited~~ 4 August 2015

Dividend

38 cent final dividend and 12 cent special dividend

==> picture [682 x 264] intentionally omitted <==

----- Start of picture text -----

Special dividend
Final dividend
Interim dividend 30
12
20
38
40
15
30
20
20 20
38
35
25
20
15 15
FY10 FY11 FY12 FY13 FY14 FY15
----- End of picture text -----

==> picture [12 x 7] intentionally omitted <==

----- Start of picture text -----

31
----- End of picture text -----

~~Suncorp Group Limited~~ 4 August 2015

32

Suncorp Group

Key targets

‘Above-system’ growth in key target markets

1

Optimisation benefits of $170 million in 2018 financial year

2

‘Meet or beat’ an underlying 3 ITR of 12% through the cycle

Sustainable Group ROE of 4 at least 10%

5 60% to 80% dividend payout ratio

• 6 Continuing to return surplus capital to shareholders

~~Suncorp Group Limited~~ 4 August 2015

==> picture [425 x 242] intentionally omitted <==

Conclusion

Patrick Snowball Suncorp Group CEO

~~Suncorp Group Limited~~

==> picture [130 x 40] intentionally omitted <==

4 August 2015

==> picture [425 x 242] intentionally omitted <==

Q&A

Financial results for the full-year ended 30 June 2015

==> picture [130 x 40] intentionally omitted <==

34

~~Suncorp Group Limited~~ 4 August 2015

Supplementary Slides

Financial results for the full-year ended 30 June 2015

==> picture [130 x 40] intentionally omitted <==

35

~~Suncorp Group Limited~~ 4 August 2015

Suncorp transformation

==> picture [684 x 257] intentionally omitted <==

----- Start of picture text -----

Optimised Platform in 2017
2009 2011 2015 2017+
Optimised
Stabilise Integrate Simplify
Platform
ENABLED BY ENABLED BY ENABLED BY
Building Blocks Simplification Optimisation
Single view of: • LSP/ NextGen • Claims transformation
• Claims • Partnering • Ongoing SMART rollout
• •
Pricing • Claims Super Simplification
• •
People • Procurement Business Intelligence
• •
Financials Technology & Procurement
----- End of picture text -----

==> picture [676 x 37] intentionally omitted <==

----- Start of picture text -----

‘One Company. Many Brands’ Cost Capital Customer Culture
----- End of picture text -----

36

~~Suncorp Group Limited~~ 4 August 2015

~~3~~ 7

FY16 Reinsurance program

==> picture [684 x 265] intentionally omitted <==

----- Start of picture text -----

6.9b
6.1b
2.5b
500m
Original cover Reinstatement Reinstatement Reinstatement
250m
200m Dropdown aggregate
Dropdown aggregate
50m
Retention
----- End of picture text -----

~~Suncorp Group Limited~~ 4 August 2015

38

==> picture [682 x 323] intentionally omitted <==

----- Start of picture text -----

FY16 Reinsurance program
Drop-down aggregate program fully placed
250m 50m xs
200m xs 50m
100m xs 100m xs
150m xs 200m 150m xs 300m
200m
150m
Retention
100m xs 100m xs
50m xs 200m 50m xs 300m
50m
----- End of picture text -----

~~Suncorp Group Limited~~ 4 August 2015

==> picture [702 x 311] intentionally omitted <==

----- Start of picture text -----

Christchurch
earthquakes,
Natural hazards since 1967
Brisbane floods,
Suncorp long-term catastrophic loss experience Cyclone Yasi,
Melbourne
Events greater than $100m, gross of all reinsurance Hailstorm
5,000
AUS NZ Long run average
4,500
Hunter Valley
4,000 storm Marcia and Cyclone
Brisbane flood, NSW Low
3,500 Cyclone Tracy Storms
Melbourne &
Newcastle
3,000 Perth Hailstorms,
earthquake Christchurch
2,500 Sydney earthquakes
Hailstorm
Brisbane Brisbane
2,000
Hailstorm Hailstorm
1,500
1,000
500
-
----- End of picture text -----

39

~~Suncorp Group Limited~~ 4 August 2015

Optimisation

The next phase

==> picture [696 x 269] intentionally omitted <==

----- Start of picture text -----

700
Optimisation Program:
600 • Claims transformation
• Ongoing SMART rollout Optimisation benefits $170m
500
• Super Simplification
400 • Business Intelligence
Simplification benefits $265m
300 • Technology & Procurement
$m
200
100 Building Blocks benefits $235m
0
Building Blocks costs
Simplification costs
(100) Optimisation costs
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
(200)
40
----- End of picture text -----

~~Suncorp Group Limited~~

4 August 2015

Simplification benefits

$225 million in FY15, $265 million in FY16

==> picture [682 x 261] intentionally omitted <==

----- Start of picture text -----

Original net impact Revised net impact
Revised
300 Simplification
Benefits
250
200
150
100 Original
Simplification
50 benefits
0
Original one-off
(50) project costs FY16
FY15
(100)
FY14
Revised
(150) Project Costs FY13
$m
----- End of picture text -----

==> picture [13 x 7] intentionally omitted <==

----- Start of picture text -----

41
----- End of picture text -----

~~Suncorp Group Limited~~

4 August 2015

Suncorp capital at 30 June 2015 $570m excess CET1 on a post-dividend basis

$m General Insurance Bank Life NOHC and other entities Suncorp Group total	$m General Insurance Bank Life NOHC and other entities Suncorp Group total	$m General Insurance Bank Life NOHC and other entities Suncorp Group total	$m General Insurance Bank Life NOHC and other entities Suncorp Group total	$m General Insurance Bank Life NOHC and other entities Suncorp Group total	$m General Insurance Bank Life NOHC and other entities Suncorp Group total
CET1	3,069	2,802	438	320	6,629
CET1 target	2,298	2,678	334	106	5,416
Excess (pre-div) 771 124 104 214 1,213
Dividend (643)
Excess (post-div) 570
CET1 coverage ratio (pre-div)	1.40x	9.15%	1.77x
CET1 targets	1.05x	8.75%	Amount equal to sum of PCA plus a target excess

42

~~Suncorp Group Limited~~ 4 August 2015

Suncorp market shares Growth opportunities

Incremental growth opportunities in markets where we are a leading player

Home and Motor Insurance 29%

QLD CTP 51%

Growth opportunities from entering new markets and expanding in OUR HOW existing markets

CI Aust CI NZ PI NZ[# ] CTP NSW 16% 25% 24% 21%

Potential to grow to natural market share in targeted segments

Suncorp Bank^ Suncorp Life` 3% 5%

43

~~Suncorp Group Limited~~ 4 August 2015

#Vero and AAI

^Residential mortgages `In-force individual risk premiums Australia.

Important disclaimer

This report contains general information which is current as at 4 August 2015. It is information given in summary form and does not purport to be complete.

It is not a recommendation or advice in relation to the Group or any product or service offered by Suncorp or any of its subsidiaries. It is not intended to be relied upon as advice to investors or potential investors, and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate.

This report should be read in conjunction with all other information concerning Suncorp filed with the Australian Securities Exchange (ASX).

The information in this report is for general information only. To the extent that the information may constitute forward-looking statements, the information reflects Suncorp’s intent, belief or current expectations with respect to our business and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices at the date of this report. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties, many of which are beyond Suncorp’s control, which may cause actual results to differ materially from those expressed or implied.

Suncorp undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this report (subject to ASX disclosure requirements).

44

Suncorp Group Limited

4 August 2015

==> picture [234 x 296] intentionally omitted <==

Investor Relations App In 2014, Suncorp launched an Investor Relations application for tablets to enable easy access to a suite of investor materials.

==> picture [65 x 65] intentionally omitted <==

For all the latest news, updates and share price movements download the Suncorp Group investor relations app now. Search “Suncorp IR" on the app store or scan the QR code below.

==> picture [70 x 40] intentionally omitted <==