Suncorp Metway jump starts GIO Integration
Queensland Allfinanz giant Suncorp Metway is moving quickly to reap the benefits of its $1.26 billion acquisition of GIO.
Managing Director Steve Jones today announced that synergies worth $31 million on an annualized basis had already been made following settlement of the acquisition on September 28.
He said the early savings arose in the areas of corporate and accounting services, payroll, investment management and systems development.
As a result of these savings and having an in-depth look at the business, the estimate of total synergies to be realised had been increased from $80 million per year to $120 million.
Addressing the Suncorp Metway annual general meeting in Brisbane, Mr Jones said that progress on the integration of GIO was going well, the GIO trading results were in line with expectations, and he was very confident the acquisition would add value for shareholders.
Mr Jones said that overall integration of the GIO and Suncorp Metway general insurance businesses would begin in January and would occur over 18 months.
"Once finished, I am confident we will have a highly efficient general insurance business that is very well placed to pursue its goal of being number one in customer satisfaction and financial performance," he said.
Outlook
Chairman John Lamble said profits for the current year were particularly difficult to predict due to global economic uncertainty.
He said that underlying profits from banking and insurance operations in the first two months of the year had been growing in line with expectations, but the US terrorism attack had affected trading in September.
"So long as this proves to be a temporary aberration, we expect to see improved underlying operating profits in the current year," he said.
GIO's insurance trading operations are also expected to deliver a worthwhile contribution to earnings, provided economic conditions return to normal for the balance of the year.
Mr Lamble said the fall in the All Ordinaries index so far this year would have an impact on investment returns. Statutory profits also would be affected by additional goodwill amortisation charges related to the GIO acquisition.
"So in summary, provided the slowdown experienced in September proves temporary, we would foresee improved underlying operating profits from our historical business plus a worthwhile contribution from GIO.
"Our bottom line statutory results will be affected by the amortisation of goodwill and by investment returns on equities, which we can't predict.
"But those are two factors which shareholders should adjust for in forming a long term view of the value of their holding in the company," Mr Lamble said.
Blue Ribbon Initiatives
Mr Jones also unveiled four new customer service initiatives which reflect Suncorp Metway's drive to continuously improve service to customers.
The company has set standards for service in four areas important to customers:
- Customers involved in an automobile accident who can drive their cars into Suncorp Metway repair assessment centres in South East Queensland will have their cars back on the road within seven days, or a free courtesy car will be provided.
- Customers calling the telephone call centre will be answered by a person within 60 seconds.
- Business loan customers will have a written answer to their loan application within five working days.
- If you go to a branch, you will be served within five minutes.
The company endeavours to meet these standards in 90 out of 100 instances and is pleased to advise its service is meeting that goal. Entitled Blue Ribbon Initiatives, the standards are part of Suncorp Metway's aim to deliver measurably better service than its larger competitors.
For more information on the Annual General Meeting click here.
16 October 2001
next steps
For more information, contact Joe Dowling, Head of Public Affairs and Investor Relations (07) 3835 5769 or 0408 884737
