Suncorp Group Limited (SU4.F) Earnings Call Transcript & Summary

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.