Suncorp Group Limited (SUN) Earnings Call Transcript

Good morning, and welcome to Suncorp's 2024 Annual General Meeting. My name is Christine McLoughlin and as Chairman of the meeting, I'm informed we have around 410 shareholders, proxyholders and other attendees participating here in Brisbane today and online. So welcome. As a quorum is clearly present, I declare the meeting open. Before I proceed, could I please ask everyone here to ensure that your mobile phone is on silent mode. And please now join me in welcoming Lyric Ruska to share a welcome to country with us. This is the first time that Lyric has joined us at one of our AGMs. Lyric is a traditional custodian of the Yuggera and [ Turrbal ] tribe of Brisbane and has strong connections to the Nunukul people of North Stradbroke Island and Moreton Bay islands, the Kombumerri people of the Gold Coast and the Gubbi Gubbi people of the Sunshine Coast. Lyric has been a part of the Nunukul Yuggera dance company since the age of 2. He's had the opportunity to perform all over the world, showcasing his culture through song and dance. Please join your Board in making him welcome.

Welcome.

[Foreign Language] Hello. Good morning, everyone. My name is Lyric Ruska. I have family connections to the Yuggera country through my grandfather, Eddie Ruska And I'm here today to give you what is called a welcome the country. It is something we have been doing for many years now. This consists of 2 things: handing over the message stick, which we call [indiscernible]. It has a marking or carving to give reasons for traveling through other tribes. Alongside that, we have our smoking ceremonies. We use our [indiscernible] the blood wood tree, which produces a smoke that is believed to get rid of bad spirits and bad energy. I'm here today to give a formal welcome in the country by doing that. I call upon my ancestors to guide us in peace through this land. [Foreign Language] that means you're all welcome to gather in this country and may God and all our ancestors guide us in peace. Thank you.

Thank you very much. Thank you again, Lyric. We very much appreciate you being here with us here today and for that very special welcome. I would also like to acknowledge the traditional custodians of the land on which we are gathered here in Brisbane and pay my deep respects to elders past, present and emerging. I'd now like to introduce Belinda Speirs, our Chief Executive of People, Legal and Corporate Services to cover the meeting procedures we'll be using today.

Thank you, Chairman, and good morning, everyone. For those shareholders and proxyholders who are participating with us at the physical AGM venue in Brisbane who wish to vote, please make sure you can access the LinkVote+ app using the pen on your green attendance card or that you have a yellow voting paper card. A summary of the direct and proxy votes received prior to the meeting was released on the ASX platform this morning. If you wish to ask a question or make a comment, please move to a seat close to your nearest microphone. If you are unable to move to a microphone, please put your hand up and a team member will assist you at the appropriate time. In the unlikely event of an emergency, please follow the directions provided by the Brisbane Convention and Center staff. For those shareholders and proxyholders who are joining us online and wish to vote or ask a question, you may be familiar with the platform from our previous AGMs. You also have the opportunity of asking your questions via the question and comments phone line that is available during the meeting. To help with the smooth running of the AGM, we invite shareholders and proxyholders who are participating online to submit your questions and comment now. Further details about how to ask questions or make comments using the platform or the phone line are contained in the online AGM guide. You can access the guide through a link at the bottom of your screen or on the Suncorp website. If you encounter any technical difficulties of the platform at any time during the meeting, please contact the share registry's online AGM support team on 1 (800) 990 363. This phone number will remain visible on your screen throughout the meeting. In the unlikely event that technical issues prevent the AGM from proceeding as planned, Suncorp will make announcements via the ASX and on our website. I'd now like to briefly cover the meeting procedures that the Chairman will follow today. Firstly, this is a meeting of Suncorp shareholders. As set out in the Notice of Meeting, only shareholders or proxyholders are entitled to vote on the resolutions, ask questions or make comments. The Chairman will allow a reasonable opportunity to address questions and comments as each item of business is considered. Please ensure that your question or comment is relevant to an item of business and to shareholders as a whole. We are particularly mindful that we have a large number of resolutions to consider today. So if there are a large number of shareholders who wish to ask questions, the Chairman may consider a question limit to ensure that all interested shareholders have an opportunity to speak. Where there are similar questions, the Chairman will aim to acknowledge those who have those similar questions. However, the Chairman may provide a single response in order to streamline today's proceedings. If you have a matter you'd like to raise as a customer and you are participating at the physical AGM venue, members of our customer advocate team and for Suncorp Bank customers, representatives from ANZ are here with us today and will be able to assist you in the foyer. If you are participating online, please contact our customer relations team using the contact details on the last page of the Notice of Meeting. Any customer-related questions specific to an individual will be referred to our customer relations team for response and will not be addressed during the AGM. Link and Suncorp representatives are also available in the foyer to assist shareholders with any shareholder related questions that do not relate to the business of today's meeting. When taking questions and comments, the Chairman will first cover a number of relevant questions received prior to the meeting. The Chairman will then invite shareholders and proxyholders participating here at the physical AGM venue to speak. We will then address any questions received through the online platform or phone line. The Chairman will retain full authority to conduct an orderly AGM. In particular, questions or comments that are offensive anyway will be taken as being out of order and will not be acknowledged at all during or following the meeting. Either offensive or disruptive conduct by those who are participating here in Brisbane will also be taken as being out of order, and the relevant participant will be asked to leave the meeting. If you are voting today and need to leave the AGM early, please remember to submit your voting card before you leave. I may now hand you back to your Chairman.

Thank you, Belinda, and thank you to those who have already voted or pre-submitted questions relating to the business to be covered at today's meeting. I would now like to introduce your Board of Directors who are all here in Brisbane today. In addition to their significant Board experience, each Director brings a mix of financial services and other relevant business experience and expertise that enables your Board to be effective in governing Suncorp. I'm going to ask my colleagues to stand as I introduce them so that you can see them given the view from some of the seats. From your left, Gillian Brown. Gillian was appointed as a Director by the Board in February this year. Over a career spanning nearly 40 years, Gillian has developed broad skills and expertise in financial services, law, infrastructure, investments finance and ESG initiatives. Gillian will seek your support to continue as a Director through the usual election process later during this meeting, and I will give Gillian an opportunity to address the meeting then. Lindsay Tanner. Lindsay has worked at the highest levels of government and business for almost 4 decades and is a recognized authority on corporate governance, economics and finance. He's a member of the Risk Committee and also serves on our New Zealand Subsidiary Boards, and Lindsay is seeking reelection today. So you'll hear from him as well. Sylvia Falzon. Sylvia chairs the Board, People and Remuneration Committee, and is a member of the Risk Committee. She brings to Suncorp valuable experience in a range of regulated and customer-facing industry, including financial services, health care, retail and aged care. Sylvia is also seeking reelection today, and so you'll hear from her later in the meeting. Thank you, Sylvia. Duncan West chairs our Board, Risk Committee and is a member of the Audit Committee. Has 40 years of experience in the general insurance, life insurance, banking and wealth management sectors both domestically and internationally. Duncan is also seeking reelection today. So you can hear what a busy meeting is going to be. So you'll get to hear from Duncan as well. Steve Johnston continues to capably lead Suncorp since his appointment as CEO and Managing Director in 2019. I will invite Steve to address you later and during the meeting. And he will also respond to some of the shareholder questions today. Ian Hammond chairs the Board Audit Committee and is a member of the Risk Committee. He brings to Suncorp extensive knowledge of the financial services industry as well as expertise in financial reporting and risk management. For the purpose of today's AGM, Ian has been appointed Deputy Chairman by the Board and will chair the AGM when my reelection is being considered. Ian will also chair today's meeting in the unforeseen event that I'm unable to continue to chair the meeting for any reason. Sally Herman is Chairman of the Board Customer Committee and a member of the Risk Committee. Sally has expertise in running retail banking and insurance products, setting strategy for financial services businesses and working with customers, shareholders, regulators and government. Elmer Funke Kupper. Elmer has significant financial services experience as well as experience in navigating demanding regulatory sectors and transforming business models through the adoption of technology and digital services. He served as CEO of 2 ASX-listed companies. He is a member of our Board Audit and People and Remuneration Committees. And finally, Simon Machell. Simon is based in Singapore and serves on a number of international boards. He has deep strategic and operational knowledge of the insurance industry and brings to Suncorp international perspective on current industry trends in insurance, together with insights into the risks and opportunities associated with emerging technologies and new business models. He's a member of Board, Customer and People Committee -- Remuneration Committees. And you've met Belinda Speirs who spoke with you earlier. Belinda was recently appointed as a Chief Executive, People Legal and Corporate Services in September. After leading the successful execution of the Suncorp Bank sale, which, as all of you know, took 2 years before that, Belinda was our Group General Counsel. So you have seen her up at the AGM with me before. She will moderate questions online from shareholders and proxyholders during today's meeting. There are other members of the Suncorp executive leadership team also with us today, and they will now stand. For those of you in the auditorium, they're sitting in that corner over there. So I'll ask Jeremy Robson, our Chief Financial Officer, who's been with Suncorp since 2013; Lisa Harrison is our Chief Executive of Consumer Insurance. And Lisa joined Suncorp in 2004. Michael Miller is our Chief Executive Commercial and Personal Injury Insurance and he has been with Suncorp since 2011. Jimmy Higgins has joined us from New Zealand. He's the CEO of Suncorp New Zealand and has been with Suncorp since 2008. Adam Bennett is our Chief Information Officer. He joined Suncorp in 2020. In fact, I interviewed Adam when the borders were shutdown, and he's still got the job, and he's done an amazing job ever since. Fantastic job. Bridget Messer is our Chief Risk Officer. Bridget joined Suncorp in 2022, having returned from the U.K. where she brings incredible experience. And finally, we're joined today by Bernadette Norrie, our Customer Advocate. Bernadette is to my right. Bernadette and her team are available if any of you have any customer-related queries, and they'll be in the foyer following the meeting. Before I invite our CEO, Steve Johnston, to speak, I'll begin today's proceedings with some comments about the events of the past year. I'll just check that there's no people waiting still to be seated. All good. 2022 was a momentous year for Suncorp as we move closer to our ambition to be the leading Trans-Tasman general insurer. We completed the extensive 2-year sale and separation process for Suncorp Bank and announced the sale of our life insurance business in New Zealand, which is scheduled to complete in late January 2025. At the same time, we've commenced significant data and technology transformation programs to drive growth and improve our customer and employee experience. While this marks a new chapter in our 100-year-plus history, we continue to service our customers through our well-known portfolio of leading brands, including AAMI, Suncorp Insurance, GIO, Shannons and Vero as well as AAI, our joint venture in New Zealand. And importantly, we remain proudly headquartered in our home state of Queensland. Suncorp is well positioned to deliver for our customers, communities and shareholders at a time when the value of insurance and the need for continued investment in a sustainable, viable insurance sector has never been greater. We've reached this critical juncture while maintaining our focus on delivering good growth and returns for shareholders as well as progressing our strategy in areas such as digitization, automation and cyber resilience and our use of artificial intelligence, all of which we expect to accelerate over the coming years. At the same time, the business and regulatory landscape for insurers continues to grow in complexity. We've continued our advocacy program with governments and regulators to ensure a well-functioning sustainable insurance market across our regions. Geopolitical tensions remain, as do significant cost of living and inflationary pressures, although we are seeing moderation of this in some pockets of the economy. Your Board continues to remain aware of these pressures in relation to insurance premiums impacting all of our customers, and we understand the role of the insurance industry and must play so that insurance remains excel and affordable. Ultimately, premiums reflect the underlying risk that exists, so the way to ensure sustainable premiums is to reduce risk. That is why Suncorp has long advocated with governments at all levels in both Australia and New Zealand to invest in building greater resilience to protect our communities. Our CEO, Steve Johnston will discuss more on this and the factors contributing to premium increases and insurance affordability in a moment. At the same time, we're also working hard to streamline our processes including speeding up the time it takes to settle claims and respond to complaints. During the year, we saw disasters, including Tropical Cyclone Jasper in Far North Queensland, ex-Tropical-Cyclone Kirrily in Townsville and surrounds and significant Christmas and Boxing Day storms in Southeast Queensland as well as heavy rains and flooding in New Zealand's north island. I personally make it a priority to visit impacted communities following major weather events like these to hear from our customers and our employees on the ground about their experience and in an attempt to understand the barriers they face in helping our customers and communities to recover. This way, the team and I, on behalf of the Board, get to see firsthand the progress we're making in supporting our customers and where we can, in fact, improve their experience. On this front, I'd like to acknowledge the significance of the insurance industry of the report handed down last week by the House of Representatives Standing Committee on Economics following their inquiry into the insurers' response to the 2020 major flood claims. The report highlights areas where insurers can improve their response to natural disasters, and Suncorp welcomes recommendations that lead to better insurance outcomes for customers and communities. Your Board continues to closely monitor the areas where we know we can improve, and importantly, remains committed to working with government, the broader insurance industry and local communities to deliver solutions and better experience. Steve will talk more about Suncorp's response and some of the improvements already underway shortly. The challenges of these extreme weather events and the changing climate means we must address these issues with a sense of urgency and pragmatism. We encourage local communities and governments to recognize the risks in allowing people to continue to build in harm's way; to be bold in addressing much needed infrastructure investment; and even bolder in considering the relocation of some communities. Advocating for change to better protect people and communities remains a key priority for Suncorp, and it's pleasing that our CEO will continue this advocacy and action through his recently announced role as Chair of the Insurance Council of Australia from 2025. These challenges are not unique to Australia. Jimmy Higgins, who I introduced earlier, the CEO of our Suncorp New Zealand business, sits on the Board of the Insurance Council of New Zealand and is also an adviser to the Minister for the Environment's Climate Adaptation Independence Reference Group. As a Trans-Tasman insurer, your Board has now been able to spend an increased amount of time in New Zealand, meeting with a range of stakeholders, including the government to continue engaging around the implications of climate change. The Board has been particularly engaged in building on the good progress made in reducing our own Scope 1 and Scope 2 emissions from our own operations role in supporting the broader economy to transition to a net zero future. We continue to mature our climate and sustainability-related disclosures, and this remains a focus for our Board. We expect to release our first Climate Transition Plan during the 2025 financial year. Technology investment is a key part of improving outcomes for both our people and our customers and Generative AI continues to transform the way we work and the work we do. We are focused on ensuring a responsible and measured approach to AI development while remaining alert to the ongoing sophistication of cyber threats which we continue to monitor closely and build our own resilience to as a business. We regularly engage both internal and external experts to help us to do this and to challenge our overarching technology strategy to keep abreast of how AI is being used globally by leading customer-facing companies. While Steve will shortly talk to the 2024 financial performance in more detail, I'd like to make some brief comments on this as well as the proposed return of bank proceeds to shareholders, which I know is a great interest to you all. Suncorp delivered a strong FY '24 result with group net profit after tax of $1.2 billion and group cash earnings of $1.37 billion, reflecting a mix of factors, including positive investment returns and natural hazard costs below allowances. The final ordinary fully franked dividend of $0.44 per share was paid to shareholders on 25 September, with the full year dividend payout ratio of 72% of cash earnings around the middle of the target payout ratio range of 60% to 80%. Your Board continues to expect net proceeds from the sale of the bank to be around $4.1 billion. It remains our intention to return net proceeds in excess of the needs of the business to shareholders, primarily by way of a capital return and accompanying pro rata share consolidation and a smaller fully franked special dividend. You'll note from the Notice of Meeting that a number of resolutions to enable the return of proceeds to take place are before you today. Alongside seeking your approval, we are working to finalize the completion accounts with ANZ Bank, who purchased our bank. A receipt of a final ruling from the Australian Taxation Office and approval from the Australian Prudential Regulatory Authority, each of these steps are also required. Pending these, our current expectation is for the return of capital to shareholders to occur around the first quarter of calendar year 2025. Again, if you have any questions relating to the capital return, I encourage you to speak with one of our Suncorp Investor Relations representatives located in the foyer outside following the conclusion of the meeting, and there is a very clearly marked booth for that. We're also mindful of the commitments we've made to the state of Queensland as part of the bank sale. That will deliver more jobs and investment to support the continued growth of the state. These include increased investment in a Disaster Response Center in Brisbane headquarters and the establishment of a regional hub in Townsville to help better support customers and the community before, during and after weather events. Turning to the Board. We have been progressively renewing our Board over the past few years and to continue to assess our composition to ensure we have the appropriate mix of skills, expertise and diversity. As we transition to a pure-play insurer, technology capabilities and knowledge will continue to grow in importance for your Board and be reflected in our composition. Around this time last year, in conjunction with external search firm, we commenced a search for a new Non-Executive Director and subsequently appointed Queensland-based Gillian Brown, who we welcomed in February. Gillian, I introduced earlier, and she will address the meeting shortly. Her strong credentials in the stewardship of Environmental, Social and Governance issues has been particularly useful this year. Gillian's appointment followed the retirement of long-standing Board member, Dr. Doug McTaggart. We thank Doug for his significant contribution to Suncorp in his 12 years of service. Given our average Non-direct -- Non-Executive Director tenure is currently 6 years, we remain focused on ensuring stability while continuing to renew the Board in an orderly manner. This is top of mind as we transition to a pure-play insurer. Together with Gillian and 3 of my colleagues, I'm also seeking reelection to the Board this year, we will each address the meeting today. However, I would like to note that this will be my final term and the Board will address chair succession at the appropriate time. In closing, I'd like to thank my fellow directors, our Chief Executive Officer and Managing Director, Steve Johnston and his executive team for their ongoing leadership. And as always, I thank all of those who work for and with Suncorp, our dedicated employees, partners and suppliers for their commitment to delivering for our customers and communities. It's an incredible honor to chair Suncorp, a company here to assist customers at some of the most vulnerable moments in their lives. It's also an honor to serve you, our valued shareholders. We value your ongoing support of Suncorp. We remain confident that we can deliver the benefits of being a dedicated Trans-Tasman insurer to both our communities and our shareholders. I will now hand to our CEO, Steve Johnston.

Well, thank you, Chairman, and good morning, everyone. It's, of course, great to be here to report on the 2024 financial year and for the first time as a dedicated insurance company. As a member of the Suncorp team for almost 20 years, it remains a great privilege to lead our company and the committed team of people who bring our purpose to life every day. And we don't take for granted the important role we play in the lives of our customers and in the communities and the economies in which we operate across Australia and New Zealand. I've seen it etched on the faces of the many customers I visited over the past year. I've seen the positive impact that we have when we get it right, and equally in the reverse, if we get it wrong. I've always believed there is a very clear connection between our purpose of building futures and protecting what matters and the value we deliver to you, our shareholders. If our people continue to be guided by our purpose and deliver for our customers, we will, in turn, deliver superior outcomes for our shareholders. Now we're working through the process to finalize the bank sale over the course of the past -- of the year. I'm pleased to report that we've also been able to build on our strong foundations to deliver growth and a strong set of results. Now I've captured these result highlights on the screen. Net profit after tax of $1.197 billion was an increase of 11.8%, while cash earnings, which is the basis upon which we set our dividend payout was $1.372 billion. Now as you can see on the screen, we've achieved good growth across all of our portfolios, and our underlying insurance trading ratio increased to 11.1% on a full year basis. Now while these headline numbers represent strong increases on the prior year, it is important to point out that the past few years have been very challenging for insurance companies around the world. Inflation, adverse weather and a fundamental reset in global reinsurance markets have contributed to material impacts on profitability, particularly in home and motor insurance. Now I'm sure everyone in this room has felt the impact these conditions have placed on insurance premiums, which unfortunately have risen sharply as a consequence. Now you'll see on the screen here, I provided a 5-year time series across natural hazard claims numbers and gross natural hazard claims cost. Now they're at the top of that slide. I recognize it's a bit difficult to read, but I will summarize it in a minute, and also their consequent impact on our allowances and our reinsurance costs, which are on the bottom of the slide. The bottom right, I've also included here the dollar value, what we call cost per policy for Home and Motor over the past 3 years. And effectively, this reflects the elevated level of inflation that we're seeing across both those portfolios. So in summary, we have dealt with around 700,000 natural hazard claims over the past 5 years at a gross cost of around $9 billion. Our reinsurance and natural hazard allowances have increased by more than $1 billion since 2020. While inflation in Home and Motor insurance increased by 7% and 13%, respectively. Now all of this explains why insurance premiums have risen so sharply over the past couple of years. In 2024 alone, we managed over 100,000 extreme weather claims, including 12 separate events in Australia and 1 event in New Zealand. The total estimated cost of these events was just over $1.2 billion, which was interesting given that 2024 was declared the drier El Nino weather pattern in Australia. Pleasingly, however, we've been able to successfully place our 2025 reinsurance program with some stability returning to the global reinsurance markets. Although, of course, we're watching the current hurricane season in the United States with interest. Now while on the subject of major weather events, I do briefly want to refer to the Australian Parliamentary Economics Committee's Flood inquiry, which released its report last Friday. Now I had the opportunity to appear before the committee in Parliament earlier this year, and I spent considerable time reviewing outstanding claims from the 2022 events, but importantly meeting on the ground with impacted customers. Now while 2022 saw unprecedented levels of natural hazard activity with over 51,000 claims received from the East Coast floods, and on top of that, we were dealing with the post-COVID supply chain and labor availability issues. It is apparent to me that in some cases, we let our customers down. Now as I said in the Parliament, I apologize to those customers where our claims processes did not meet theirs or our expectations. Now in my view, we, like others across the industry, drew comfort from the fact that we had satisfactorily resolved a substantial number of claims from the events with our resolution rates in the high 90%. But of course, it's inevitable that it's in the unresolved claims where the real complexity sits, and this is where we have spent a considerable amount of time improving our processes and importantly, our customer communications. In this context, we welcome the majority of the findings of the inquiry, and I'm pleased to report we are well advanced in implementing many of them. I want to supply call out 4 key initiatives today. Since 2022, we've expanded our permanent home claims team by more than 150 employees, and we've established an on-call lodgment response team. All of this means we can quickly scale up for major weather events. We've also invested in a new Disaster Management Center, which is located in our Brisbane headquarters, and it features state of the art technology and resources to monitor extreme weather events in real time, thereby allowing us to respond faster and to reach more customers sooner as well as help them better prepare before the disaster strikes. Now we plan to formally launch this in the next couple of months, but I couldn't resist the opportunity to give you a sneak preview today. [Presentation]

Now we've also expanded our dedicated focus and support services to customers experiencing vulnerability both before lodging a claim and importantly, to those who become vulnerable due to their circumstances when they're making a claim. And lastly, we spent more than 164 days, which is around 6 months in recovery centers last year. To support the work we do in these centers, this year, we're adding 5 new mobile disaster response hubs in the form of fully equipped, fit-for-purpose caravans. Now these mobile hubs, which are on the screen there are going to be named Larry, Yasi, Marcia, Debbie and Jasper, which, of course, is after the well-known cyclones that have impacted Queensland. And they'll be staffed by insurance specialists and sport teams, and they're designed to be deployed in the event of severe weather. They'll provide immediate face-to-face assistance to impacted customers. Now alongside our own initiatives, we also continue to advocate strongly with governments and policymakers for greater investment in disaster mitigation and to improve resilience to extreme weather. Reducing risk will not only protect lives, but it will also go a long way in reducing the risk of the claim, in turn, ensuring Australians and New Zealanders can access affordable and fit-for-purpose insurance. Now we're seeing some encouraging progress on this front, and I commend both the state and federal governments of Australia and New Zealand for the funding commitments that have been made, but more needs to be done to prepare for what's ahead. A plan to build a more resilient Australia must be at the top of the national agenda ahead of the federal election due in May next year. Now that includes investing more in resilience infrastructure in supporting homeowners in reducing their own risks and stopping building homes where they should have been built. Now I'm particularly concerned that in the rush to address the current housing shortage, the mistakes of the past will be repeated, putting a new generation of our citizens in harm's way. And finally, as we said regularly in these forums, we need to remove the inefficient taxes and charges that currently sit on insurance policies. So before handing back to the Chairman, I briefly want to touch on the performance of Suncorp Bank, which we did own for the full financial year. And the bank delivered net profit after tax of $375 million -- $379 million with home lending growth of $2.2 billion in what we know to be a very competitive market. We're pleased to be able to hand the bank over to ANZ in good shape after significantly improving its performance over the past 4 years. Now particularly pleasing was a top quartile employee engagement and the improving employee Net Promoter Scores that we achieved across our bank team throughout what, as we all know, turned out to be a drawn-out sale process. As you may be aware, Suncorp will continue to provide a range of largely technology-related services to Suncorp Bank under a Transitional Services Agreement with ANZ. The majority of these TSAs are planned to be exited within the next 2 years. So with the bank sale complete, where to from here. We're proud of the progress that we've made over the past 4 years in building a more resilient modern business with exceptionally strong foundations. And we're wasting no time in getting on with delivering on our refreshed strategic plan, which underpins our future as an insurance-focused business. Now this slide provides a brief snapshot of our go-forward strategy, which, of course, will be guided by our purpose and our ambition to become the leading Trans-Tasman insurer. We'll continue to focus on growing our 5 key portfolios: Home, Motor, Personal Injury, Commercial and New Zealand, while digitizing our business and investing in our market-leading brands. Beyond that, our key programs of work will be focused on modernizing our product and our people platforms, deploying artificial intelligence, but in a measured way across the organization and testing a range of innovative reinsurance solutions. All of this is core to building a sustainable and a growing insurance business. And finally, the execution of any strategy relies on the quality, the skill and the capability of your team. The ongoing support of Suncorp people is something we never take for granted, but it is what truly sets us apart. So with that, I thank you for your continued confidence and support for Suncorp, and I'll hand back to the Chairman.

Thank you, Steve. Now to the formal part of the meeting. All the resolutions for consideration today will be put to a poll, which I now declare open. The direct and proxy votes that have been received prior to the AGM were released on the ASX platform this morning and will be shown on the screen before we vote on each resolution. As set out in the Notice of Meeting, I intend to vote all undirected proxies in favor of the 11 resolutions that I chair. The first item of business today is to receive and consider the financial report, Directors' Report and Auditors' report for Suncorp Group Limited and its controlled entities for the year ended 30 June 2024. Representatives from KPMG, Suncorp's external auditor, are joining us here today in Brisbane. Scott Guse, where are you, Scott? Yes, the signing partner and Shalvin Ram, the audit partner. They are available to answer any questions you may have about the auditors' report or the conduct of the audit. I will now address questions and comments about the reports or Suncorp's performance generally. As Belinda mentioned earlier, I'll first address a number of relevant questions received from shareholders prior to the meeting. In the meantime, if you are here in Brisbane and wish to ask a question on these matters, please move to the nearest microphone. If you are sitting up the top towards the back and you would prefer us to bring a roving microphone to you, please wave because I'm worried about the stairs. [Operator Instructions] Belinda, could you please read our first pre-submitted shareholder question.

Thank you, Chairman. First, we have a question from shareholder, [ Mr. Aaron Whittaker ]. The question is, in the next financial year, will you be hiring and rewarding staff based on diversity or simply talent?

Thank you, Mr. Whittaker. Suncorp has always been committed to fair and equitable recruitment and reward practices. Our starting point when promoting or hiring is to ensure candidates have the right skills and capabilities and we have strong annual performance review processes to ensure that the requirements of the role are met. We do also recognize the benefits of diversity and continue to ensure that our efforts are there to ensure that our employees represent the diverse nature of our customer base as well as the communities we serve. We do always seek to attract top talent and continue to build diversity. Next question please, Belinda.

Thank you, Chairman. Mr. Hopkins, on behalf of shareholder, Australian Management Systems, has two questions. The first question is, can you assure shareholders that you will cease to fund any projects, which maintain or expand the coal industry? Such funding is at odds with net zero about 2050 at the Paris Agreement's goal of limiting global warming to 1.5 degrees Celsius. Achieving this means leaving coal in the ground.

Thank you, Mr. Hopkins. Suncorp has had sensitive sector standards in relation to fossil fuels in place since 2019. The group commits to playing our part in reducing our own climate impact and supporting the economy-wide transition to net zero. The group's sensitive sector standard details our commitment to reducing exposure to thermal coal extraction and electricity generation. This includes a commitment to not directly invest in or underwrite new thermal coal mining extraction processes or new thermal coal electricity generation. We've also committed to phase out of any underwriting and direct investments in companies where more than 10% of revenue is derived from thermal coal mining or electricity generation by 2025. The exclusion does not apply to mining services companies who are not directly involved in exploration, extraction or production. It also does not apply to personnel and small to medium businesses and statutory or compulsory insurance and group life products in New Zealand. To support the important transition to a decarbonized economy, we'll underwrite and invest in companies whose business is clearly consistent with the transition to net zero carbon emissions economy by 2050. A framework to govern our selective support of some companies supporting the transition to net zero will accompany the group's climate transition plan due to be released in FY '25, which I mentioned in my opening address. Next question, please, Belinda.

Thank you, Chairman. Mr. Hopkins on behalf of Shareholder Australian Management Systems asks, can you assure shareholders that you will never advertise in media that promotes climate change denialism, misogyny or racism?

Thank you for this question. We proactively consider all of our advertising placements, to ensure they meet our standards and our shareholders and customers' expectation. This approach has meant there have been instances where we have decided not to place advertisements through certain channels. Next question please, Belinda.

Thank you, Chairman. We have received a question from shareholder, Mr. Mark Randall. The question is, what does Suncorp hope to see the company's share price level to be?

Thank you, Mr. Randall. The Board and management are focused on executing our strategy to deliver value to you, our shareholders. However, we appreciate that the share price can be influenced by various market factors and economic conditions outside of our control. Pleasingly, in FY '24, Suncorp generated strong results for shareholders, exiting the year with total shareholder returns of 35%. Next question, please, Belinda.

Thank you, Chairman. We have received a general suggestion from shareholder, Mr. Radovan [indiscernible]. Mr. [indiscernible] suggests amending the Suncorp Group constitution to make hybrid meetings standard.

Thank you, Mr. [indiscernible]. The benefits of hybrid meetings are evident today because I think at the moment, we have around 286 shareholders online and around 184 in the room. We are focused on ensuring that as many shareholders as possible can participate in our AGMs, and that's why we've been holding hybrid meetings since 2021. We will continue to gather insights and feedbacks from this approach, as well as from the experience of other companies. However, moving forward, we anticipate maintaining this hybrid format, and we can do this without the need to update our constitution. Next question, please, Belinda.

Thank you, Chairman. That concludes the general questions received in advance, and we now move to questions in the room. Shareholders, please hold any questions relating to specific resolutions until the time those resolutions are considered. And please let the team member at the microphone know who you are, so they can introduce you to the meeting.

Thank you, Belinda. So I've got very bright lights in front of me. So who are people at microphone 1. Thank you.

Good morning, Chairman. May I please introduce Ben Gallen who is a proxy holder for the Finance Sector Union.

Ben Gallen from the finance sector Union, representing Suncorp employees. During the life of the current Suncorp Enterprise agreement, cost-of-living pressures have been at record highs with inflation reaching 7.8% in 2022 and remaining stubbornly high today. Over the last 12 months, a number of notable insurance sector employers have recognized this economic reality and introduced certainty to their staff through guaranteed pay and enterprise agreements. This includes [ IAG ], Zurich and Alliance, who have increased the guaranteed component within their pay arrangements by up to 3 to 4x in recognition of the cost-of-living pressures and the contribution made by their employees. Given the critical contributions all Suncorp employees have made to the substantial profits of the '23/'24 financial year and the enormous financial benefit gained over the sale of Suncorp Bank, there is an expectation from employees that Suncorp will follow the example set by others in the sector. The employees who represent are proud to be part of Suncorp and the role we play in supporting our communities. With so many of us impacted by cost living pressures, what assurances can you provide employees that our valuable contributions will be recognized in this next enterprise agreement through increased certainty around pay?

Thank you very much for that question. And thank you also, I agree with you that the Suncorp employees really do equip themselves with incredible dedication to our purpose and delivering for our customers. So that's something that we, as a Board and leadership team, really value. We're also very, and I'll ask the CEO to make a few comments shortly in the detail, but we are acutely aware of the cost of living challenges and affordability that our people and all of our communities face. We regularly review our reward framework to ensure its competitive, fair and responsible in light of customer, community and regulatory expectations. And as part of the bargaining for our new EA, we remain committed to fair and equitable approach and pay for our people. And we will continue to engage with the FSU appointed bargaining representatives and our people more broadly to make sure that we really understand the feedback that is important to you and your members. I believe that bargaining meetings are ongoing at the moment. I don't want to preempt the outcome. I think the next meeting is around the 31st of October, I'm told. Did you want to add anything, Steve?

Chairman, look, I've been in the company for 20 years, and I agree with you that the -- that our workforce, one of our greatest assets as an organization, and we're committed to treat them fairly. We're in the middle of that enterprise agreement. We're negotiating that enterprise agreement in good faith across a range of matters, and we'd like to bring that to a conclusion as quickly as possible. So we can get some certainty around what those commitments might look like.

Microphone 1, again. Thank you.

Thank you, Chairman. May I please introduce Alex [indiscernible], who is a shareholder.

I'm Alex [indiscernible]. I'm a Suncorp employee speaking on behalf of the Finance Sector Union employees at Suncorp. The gender pay gap remains a critical issue to our members and all employees across the finance industry. I'd like to acknowledge here some improvements that you've introduced over the past few years that begin to make some headway in addressing this. This includes policy improvements to paid parental leave and family and domestic violence leave. We think Suncorp has an opportunity to lead the insurance sector around pay equity, and that's why we're seeking that these policy improvements be formally included in our new enterprise agreement currently being negotiated. As the gender pay gap remains high at Suncorp last reported at around 21%, what are you doing to close this gap? What initiatives are you putting in place? Do your executives have KPIs attached to closing this gap?

Thanks, Mr. [indiscernible], I've have said -- have I pronounced your sir name correctly?

Yes.

Thank you. Thank you. I can assure you that the Board and the leadership team are acutely aware of gender pay gap issues and really committed to closing the pay gap, and we spent quite a bit of time talking about that both as a Board and through our People and Remuneration committee. We actually have, I believe, Sylvia in our scorecard -- our [ SGI ] scorecard for the upcoming year, we have a particular call out of closing the gender pay gap. So you should see that as an indication from us of genuine good faith in this regard. We've done -- we have taken quite a lot of steps. We still do have more to do. I'm not going to get into the negotiations with the FSU because that's something that the company has well in hand, but we've certainly been ensuring that steps are being taken to increase awareness and education around gender equity bias, improving the representation of women in leadership roles. And I think the Board, you can see we've got good gender representation here. And similarly, the leadership team is something the CEO has been committed to since he commenced in office, looking at implementing targeted development programs and reviewing our hiring and remuneration practices to eliminate any gender bias. We're also looking to uplift policies and leave offerings for gender inclusion. This is part of Belinda's responsibilities as well. Do you want to add anything, Belinda?

Thank you, Chairman. I would add that we have made progress, and we continue to make progress in the gender pay gap. We've reduced it over 1.1% over the last year, and we are tracking to target it absolutely in our scorecards and every leader is committed to delivering on it.

Thank you. Microphone 2. Thank you.

Thank you, Chairman. I have Steven Mabb who is a proxy holder.

Mr. Mann, was it?

Mabb.

Mab, M-A-B. Thank you.

My name is Steve Mabb. I'm a volunteer for the Australian Shareholders' Association.

I apologize because of these bright lights and I met you in person so many times. Now I'm embarrassed. Welcome, Steve.

I'm happy to be in disguise. So, representing 228 shareholders today and over 1 million Suncorp shares. I just want to say, first of all, thank you to you and the team for another solid result this year. We do also just want to voice our disappointment that the sale of the bank wasn't put to a vote of shareholders given it's a significant change for the company. But obviously, it's great that we have some certainty around that now. One of the changes this year was some less disclosure -- around lesser disclosure around the financial metrics for the insurance side of the business in the annual report. It looks to us though that you've had some significant decreases in expenses there. So we just wanted to check whether those underwriting decreases are correct that we saw. And if so, where are those savings coming from?

Thank you. And I'd also like to -- I'll have the CEO make a couple of comments. But I would also like to recognize the benefit of the other retail shareholders in the room that, the Australian Shareholders' Association is going to great lengths to engage with us ahead of the AGM. Mr. Whittington couldn't be here today, but he's also a regular feature on our landscape. And we actually find the feedback that we get from the ASA really helpful, and we value the constructive way that you meet with us. I think the disclosures, we genuinely try to be as transparent as we possibly can. The remuneration report, which our Chair of the People and Remuneration Committee, Sylvia Falzon, leads committee, has really tried to be as transparent as we can there. To the extent that you would like to see more transparency around costs. Steve, I might let you comment on that?

Yes. I mean it's a good observation that our expense ratios have improved significantly over the past couple of years. And why is that? Because we could see very clearly that there would be a big disconnect in the global reinsurance markets, and that would require a significant pricing to go through which, obviously, has the impact on customer retention and various issues. So we couldn't sit back and have pricing to all the heavy lifting in that environment. We have to make sure that our business remains as efficient as it can be so that we take some of the pressure off that pricing. So one of the things that we've been doing over the past 5 years has been digitizing sales, service and claims lodgement. 5 years ago, customers interacted with us largely on the phone, that's 80%, 20% on digital back 5 years ago. And now we're originating sales, service and claims lodgement, 60% to 70%. And so that has a material impact on your expense ratio as you become more efficient, you're dealing with people through the digital channel. Now that doesn't work for everyone. We have to continue to support our contact center workforce so that we're available for people on the phone, where they choose to interact with us on the phone. And one of the things we found in this environment is that the digital channel works very well when price increases are reasonably at CPI levels. But if you're putting prices up by higher than CPI, people tend to ring up and want to talk to you about that. And equally, when you've got delays in terms of claims lodgment, they want to talk to you about it. So the digital channel is a core element of improving our expense efficiency. But again, it's not for everyone, so we do have to maintain. And then beyond that, we're looking at artificial intelligence now as it means not only to improve the efficiency, but to improve the quality of the work for our team. As you would imagine, in the business of insurance, there's a lot of activity that requires a lot of manual processing work. We're finding AI to be a great supporter of our team, we're allowing them to do more value-add work. So there's a range of initiatives across our business that we've deployed and continue to deploy. The main objective there is to have an efficient business, make sure our expense ratio is appropriate so that all the pressure doesn't have to sit on the customer in terms of pricing.

Thank you, Chairman. Steven Mabb has a follow-up question.

Thank you, Mr. Mabb now. I know who you are.

Yes. Thank you. Remiss of me to say, thank you very much for constructive engagement as well prior to the meeting. It was very helpful. Next question is around the Board skills matrix. I know we've got some Directors up for election today so we can address those in due course, but you spoke highly, I think, of Adam, the new Chief Information Officer at the start of the meeting. That's great to hear. One of our, I guess, request is for a more detailed Board skills metrics so that we can really see which directors have that line management or executive management experience when we're rating them highly for a particular skill. So specifically on cyber security, given the damage that, that can do to our business, who would you say are the Directors that we have a really high level of cybersecurity experience at the moment that are overseeing the work that Adam does in making sure that he continues to do a great job.

Thank you, Mr. Mabb. It is a total coincidence that last Friday, myself and 2 of my colleagues worked through a cyber simulation under the stewardship of our Chief Risk Officer, Bridget Messer, and I -- it's actually the responsibility of the entire Board. And as everyone in this room would know, cybersecurity has -- and cyber risk has just evolved rapidly, over the past few years, certainly since I've been chairing the Board. And so we see it as a responsibility of the entire Board. So we actually engaged external advisers during the course of each year to work with us on education programs, simulation exercises. I think it's fair to say, every time we have a simulation, we learn something new. We watch when other cyber events are publicly reported by other organizations. We learn from that. We engage with the experts in Canberra on this. It's not just the responsibility of Adam's role. It's actually the entire leadership team that also has to have accountability for this because clearly, when you're dealing with customers, and we make huge efforts as other companies do to try and educate customers on how to spot a scam, how to report something that appears unusual. So in the context of the skills metrics, which is where we started, I actually believe that this is an ongoing skill that all directors need to have. And I suspect that is going to continue to change, which is why we engage as a Board in a dynamic way with external experts.

Great. And last question from us for this section mine, just around organizational culture in general. We're seeing lots of examples over the last few years of our largest public companies having significant issues that often the Board hasn't been aware of or claims that they haven't been aware of. So specifically at Suncorp, what are you doing practically to make sure that the information that's coming up from management and throughout the organization is really honest and reliable and to make sure that you're not just getting the good news that you're also getting the bad news or the things that you need to work on?

Thanks, Mr. Mabb. Culture is something that is core to what the Board is looking at being -- getting assurance from, if you like, from the CEO and the leadership team. In an organization, that is as large as ours with people in Australia and New Zealand and our other offshore partners, what we need to rely on are proper processes and reporting through to our various committees and the Board and through the leadership team. There will always be -- when you have a large organization, there will always be a problem area somewhere. So, I guess, what we look at as a Board is do we have the checks and processes in place to see whether there are any systemic issues if something -- a particular concern comes up, whether that's through our engagement survey verbatims through whistleblower reports, through internal audit reports. We also look to our external providers who work with us with frequency, such as our external auditors, KPMG, when they come and present to the Chair of the Audit Committee and the Audit Committee twice a year in signing off on the accounts. We always ask their observations around the culture because, obviously, the auditors see a lot more people. But importantly, through our customer committee and through our Board forums, we do take the opportunity to invite people across the organization into the committee or into the Board or into showcase sessions to really show us what they're doing. And there's nothing like talking to people and getting the vibe. It's definitely harder post -- for Boards post the pandemic as people have tended to gravitate more to fewer days in the office, more days working virtually. And I think that's something that we just have to keep asking the questions of because quite often on a Monday and on Friday, there are not a lot of people in the office. Did any of my colleagues want to add anything on that? Sylvia, Chair of the People and Remuneration Committee.

Of course.

There you are.

Thank you for the question. And another practical way is that we do conduct employee surveys. And often, what's insightful is actually not the number that comes out, but more importantly is the commentary. And so we actually spent quite a bit of time actually going through the commentary because often in that is where we really get to understand what is going on. And from that often, it informs us about where we're doing well, but more importantly, where we need to do better. So that is something that is part of what we do each year is to survey our staff. And we're doing it more now on a regular basis, so we get to get these touch points throughout the year rather than this just once in a year to get the survey through. So it's just another practical example.

Great. Thank you for the response.

Thanks, Mr. Smith. Any more questions from microphone 1 or 2. That appears to address this morning. I got one. Sorry. I'm sorry.

Thank you, Chairman. May I Please introduce Noel Johnston who is a shareholder.

Hello. I spoke last year, I was quite upset against the sale of the bank, but that's a fate to complete. I'd like to express comments in the future of the Board based on my comments at the last couple of AGMs. Now we're a pure insurer going forward, with the Board's aspirations of being one of the largest. I was a founding shareholder, and I clearly remember when the previous Board decided with merge with Promina and become a large share insurance company. Our share price was $20. Our dividends were about $1, and they've never recovered to that since we became a large insurer. So my two concerns going forward. Suncorp at the moment is near the top of the insurance cycle. High returns from our investments, great pricing power or at least my policies with Suncorp have all gone up, and we're getting maximum returns. And we've had very benign claims season. This is one of the first meetings I haven't heard about a 100-year event hitting our insurance company. Now my questions, going forward, how is the Board going to try and smooth our dividends out, given that when we hit the bottom of the insurance cycle, and we have no pricing power and we have lots of claims, our dividends seem to shrink? It was only a few years ago, none of their shareholders would have had a dividend if the bank hadn't had a very good year, but we don't have that buffer anymore. So first question, what are we going to do to try and smooth dividends or to improve dividends over the long haul? And my second comment was about the Board composition. I know everyone else is against it. But considering you've sold our bank, you're selling the life insurance company, you've sold share trade. You got rid of the wealth management [ for ] share trading. And the company is obviously smaller in all those regards, and you're about to consolidate our shares and reduce the number of shares on offer. If we're getting a more streamlined and often stated simpler company, has there been any consideration in consolidating the Board because I see you're trying to increase directors' remuneration pool over the long haul? It seems to me that if we've got a smaller company, we need less directors? Or can you explain why we need the number and the skill set that we presently have. Thank you.

Thanks, Mr. Johnston. So two questions in there. One is around our dividend and the second is around Board composition. In relation to dividend, we've got a very clear dividend payout ratio of 60% to 80%. We've looked at the capital implications of returning proceeds from the sale of the bank to shareholders, both through a capital return and a special dividend, which we will come to later in the meeting. But we've also done forward projecting on what the dividend experience for directors -- sorry, for investors would need to be to ensure that we are an attractive investment. So I assure you that's something that we are very mindful of and the team do a lot of modeling around that. We'll continue to be very disciplined around how we manage capital and returns, and you saw the CEO set up a slide in his presentation, although except it's probably hard to see, around the strategy in place for the next few years, which certainly looks to how we grow the company and how we return benefits to shareholders. In relation to Board composition and Board size, this is something that we spend quite a lot of time talking about. The -- as we discussed with the Australian Shareholders' Association a couple of weeks ago, whilst we have sold -- in the process of selling the bank, the complexities of the external and pace of external change that Boards, not just our Board, all Boards continue to have to take into account when we look at our program of work around cybersecurity and cyber resilience in response to one of the questions asked earlier. The transition to Net Zero, our climate change commitments, supply chain issues. The workload is still there. What selling the bank does mean is that we can rework our Board agendas, so we can try and bring more of these matters into the Board discussion, and we use the committees very heavily as well. And being APRA regulated and asset regulated in the March of next year, we will, as a Board and leadership team, be regulated by the Financial Accountability Regime or FAR regime. That carries with it extensive responsibilities. And so I think the, and our Board size is comparable with other insurers. So, I guess, the assurance I can give you is really that we are very mindful of having the right skills. We're not intending to grow the Board. That's not the intention. But at this stage, we believe the size is about right. We will go through renewal over the next few years, and we can come to that as we work through the meeting. Thank you. Microphone #2.

Thank You, Chairman. May I please introduce Robert [ Buchi ] who is a shareholder.

I have a couple of questions on, I guess, profitability. During the Brisbane flood events, the gates were allegedly found to not open quickly enough, potentially causing extra flooding. Thus, additional claims and expensive may have occurred. Should Suncorp consider pursuing compensation?

You'll take that?

Yes. Thank you for the question. I mean it is absolutely the fact here in Brisbane that the management of the dam is a very important input for us, obviously. In 2011, we saw a significant amount of rain as we did in 2022 in a very short period of time. In 2022, I think the dam level leading into the big weather event in Brisbane was at 40% to 45%. So I think if you look at the more recent experience, the management of the dam, I think, was quite satisfactory in terms of mitigating the impact downstream of that big weather event. In 2011, obviously, things were a little bit different in terms of the downstream impact of it. We looked at very much whether there was a recovery that we needed to make, not so much on behalf of Suncorp, but also our reinsurers, and we've determined that there wasn't one to pursue. But you do make a very good point, whether systems, whether outlooks, where the patterns are very important for our company. But equally, management of the dam is also a very important aspect. And I personally have a very good dialogue with the government at the state level to make sure that the manuals that underpin their decision making around dam management are very contemporary and very much reflective of what we believe needs to be the outcome for those that are downstream.

You had a second question, Mr. Buchi?

Yes. This is probably hopefully a little bit more easier. Approximately what percentage has crime increased the cost of premiums. I guess, the question would be, I expect people hit other cars and things happen unexpectedly. But, I guess, with crime happening, does that have an impact on premiums?

It does have an impact, but it's marginal. If you think of a home insurance premium, the vast majority of the risk that's embedded in the home insurance premium comes from the things that are happening external to the home, whether that be flooding, bushfire, the 7 perils that go into a home insurance premium. And increasingly, inside the home, the quality of your piping, your flexi pipes, the ability for you to be able to identify leaks when they occur early. I mean theft is a peril. It's obviously one that needs to be taken into account pricing, but I wouldn't describe it as having a material impact on the extended pricing increases that have been apparent over the past 2 or 3 years.

Thank you, Ms. Buchi. Any more questions from microphone #2, while you have the spotlight. Microphone #1. Okay. I think on this particular item that appears to address the questions in Brisbane. Do we have any general questions online or via the phone line?

Chairman, I can confirm we have received questions on this item of business via the online platform. Before I move to questions received via the online platform [Operator Instructions] The first question online, is asked by Mr. Henrik [ Kay ]. The question is, do you think the introduction of a national insurance levy to help those who unable to get insurance due to risk is a good idea?

Thanks, Mr. Kay. I'm going to give the CEO an opportunity to speak to this because this is something that we do think about as a Board in the context of our advocacy strategy.

Well, thank you for the question, Mr. Kay, very [Audio Gap] the risk of cyclone and transfer it to the federal government, and therefore, bringing about some reductions in premium. And I think to the effect of insurance premiums in Northern Australia that has had a mitigating effect on that part of the premium. Obviously, other inflationary factors have flowed through in Northern Australia, just as they have everywhere else. We do have a challenge in Australia that I mentioned in my presentation, similar challenge in New Zealand, but not as amplified as it did in Australia and simply is that, in many cases, we've allowed people to build and buy homes in areas they should never have been allowed to build to buy in. And as an insurance company, obviously, all insurers are getting more granular in the way that they can price risk. So when we talk about increases going through -- uniform increases going through with, that's an average. Obviously, those people who are impacted by in those areas, flooding risk or bushfire risk, they get a disproportionately high amount of that premium increase. That's just the nature of insurance and pricing. So I think as an industry, we need to do more. We need to work constructively with government. We need to step in and find a pathway through the way we underwrite, the things that we do, that we have to have a constructive dialogue with the government. And that is part of getting a solution, I think, that goes to those people who, through no fault of their own have built a board in those particular areas. I think what -- we had a -- we broadly weren't supportive of the cyclone reinsurance pool prior to it being introduced. And the reason for that, as it is with the National Insurance levy or it is with anything that would be extending that cyclone reinsurance pool is that it can't just paper over the issues that we know are there. The best way to make a more resilient Australia is to mitigate the risk, and that means spending more money, investing more in flood mitigation levy banks, other sorts of mitigation activities, allowing people to subsidize the improvement of the quality of their own home. You can get a solar panel subsidy. You can't necessarily get a subsidy and lock down your house for a category 5 cyclone and we have to stop building in those areas, and we have to take the taxes and charges of the insurance premium, which in areas like New South Wales can be up to 40% of an insured home insurance premium. So we will constructively engage with the government as a company and as an industry around how we try and find a pathway to make insurance affordable for those people who unfortunately through no fault of their own have built a board in areas where they should never have been allowed to build a buy-in.

I think you have another question online.

Thank you. We have received another question from a shareholder, [indiscernible], who asks, please explain today's news headline. Suncorp told to scrap 60% hike of home insurance premium.

Think as -- I'll let the CEO make a few comments as well. But as the CEO mentioned in his address and I alluded to in mind, the way we calculate premiums actually takes account of a comprehensive range of data sources, and we do regularly update that and take account of all of the issues that the CEO has just mentioned, we are taking steps to look ourselves at how we can slow down the pace of premium increases. But Steve, do you want to talk about today?

Yes. I mean this refers to a determination that the Australian Financial Complaints Authority has made in recent weeks around one individual premium increase, which was a big increase. In our assessment of it, it was an increase that had been properly calculated in our view. It reflected the inherent risk in that particular property. And again, it sort of falls into that category of people who built and bought in areas they should never have been able to. We have to price those risks according to the perils that's approximate to those risks, so we believe it was properly calculated. We felt it was properly disclosed. After, It took a different view. We respect their view, and we will implement their view relative to that premium, and we continue to engage with them constructively around how we do calculate premium. It is very complex and it's very, sometimes very difficult for customers to understand, and we seek to work with Africa constructively around how that works. None of us around the Board or in the management team really like having to put premiums up to the extent that we've had to do over the past 2 or 3 years. It does reflect the global pressures around reinsurance. As I pointed out in my presentation, the cost of hazards and reinsurance have increased by $1 billion for us as an organization over the past 5 years. And unfortunately, some of that has to flow through to consumers. The relative good news is that our reinsurance renewal for '25 was constructive. Discussions we've had with the global reinsurers over recent weeks, put aside the U.S. hurricanes, have continued with that constructive position. So we'd like nothing more over the next period of time for that pressure to start to come off premiums because of global reinsurance market has been through its reset and that we can start to take pressure off those increases that have been impacting everyone in the country over the past couple of years.

Thanks, Steve, Belinda?

Thank you. We have received another online question from shareholder, Natasha Lee, who asks, it has been reported today that the Australian Financial Compliance Authority has ordered Suncorp to scrap massive home insurance premiums. Could you advise how many customers are affected by this decision and the financial impact? I believe that question has been asked and answered, unless there is anything you wish to add?

And I think also that matter was in relation to one of the customer. So I think that's been adequately addressed by the CEO. Any more questions online?

Thank you. We have received another question by Natasha Michelle Lee. There is a trend to use AI as a new productivity measure. However, with an aging population to what extent are our platforms tested to assist less computer literate customers. Are the platforms tested across a wide range of demographics, as I feel that AI is fine for a younger computer savvy people, but less satisfying for others.

Thank you, Natasha. I'll make a couple of comments, and I'm going to allow Adam Bennett to make a comment on this. AI is not new to Suncorp. We progressively applied AI across several targeted use cases in pricing, claims, risk modeling, customer service, automation, virtual chatbot for many years, and you probably haven't actually seen it as a customer. And what we quite often find is that older customers, which is what you're asking about, actually find it easier to be able to tap into these tools rather than harder. Adam, did you want to add anything? You need a microphone for Adam. We've got one there.

Yes. Thanks very much for the question. Not often then I get an opportunity to address a forum like this. I think one of the things that Steve alluded to in his opening remarks is that when we're thinking about artificial intelligence and particularly the use of newer Generative AI capabilities. We're starting with applications that are more augmenting and existing our internal employees. So an example would be summarizing the notes on an existing claim to make it quicker and more efficient for them to respond to the customer. So we're going to be quite prudent and cautious in terms of how quickly we roll out those capabilities to be directly available to the end customers, but we would certainly expect over time that might be development, but we're taking a very measured and cautious approach in thinking about the needs of all of our customers and other stakeholders in the application of AI.

Thanks, Adam. I should also add, we've got -- in terms of our own employees, we have an AI Academy to help our employees understand what capabilities, what we can offer and build the capabilities that they need to be able to comfortably navigate that. I think there's another question online.

Thank you, Chairman. There is indeed, there is another question by shareholder Henrik Kay. In relation to leadership roles, how about hiring people with disabilities if suitable?

Thank you, Mr. Kay. We have a diversity strategy that is focused on removing any and all barriers for our people. And this includes ensuring that anyone who has a disability can have a fulsome career at Suncorp. We actually leverage insights we get from our enabled Resources employee group, who also regularly engaged with the leadership team and the Board on disability matters. 9.6% of Suncorp employees have identified themselves as having some form of disability. I think that completes the questions online, and I believe we also have completed on this item, the questions in the room. So for the benefit of everyone participating, I can update you now that we have a total of 722 shareholders. So the number is growing, participating. And I guess that's one of the benefits of having hybrid meetings. Having now addressed general questions and comments, we will move to the formal resolutions for consideration today.

The first two items of business relate to the return of capital to ordinary shareholders following the sale of Suncorp Bank. A reminder, to please move to your nearest microphone now if you are here in Brisbane and wish to ask a question on this item of business. Although shareholders will be asked to approve the capital return and associated share consolidation as two separate resolutions, these resolutions are interdependent. This means that the capital return will not proceed without a consolidation of shares and vice versa. Subject to the conditions outlined in the Notice of Meeting, Suncorp plans to return shareholders' proceeds from the bank sale in excess of the needs of a business of up to $4.1 billion. We anticipate the return of proceeds will consist of two components, as I mentioned in my opening address, a capital return or cash payment for the portion of your shareholding, which will form the majority of the proceeds and a special dividend with the amount to be determined by the Board. It's important to note that as the value of the special dividend is not yet determined, we are seeking shareholder approval for this resolution for capital return of up to $4.1 billion. However, once the special dividend has been determined, the amount of capital return will be reduced by an amount equivalent to that special dividend. The notice of meeting also sets out a number of steps that must occur before the capital return can proceed. This timing is subject to the finalization of completion accounts with ANZ, necessary approvals from APRA and approvals from the Australian Taxation Office, as I mentioned in my opening address. These processes are not within our sole control and may impact our estimate of timing. We've also included examples in the notice of meeting to illustrate how the capital return will work. For those attending in person in Brisbane today, we have representatives, as I mentioned earlier, from our Investor Relations team, who will be available in the foyer after the meeting, who can work you through examples of how that might apply to you. Those representatives, unfortunately, will not be providing you with tax advice. And as always, we recommend that all shareholders seek their own taxation advice in respective tax consequences. So your Board recommends shareholders vote in favor of this resolution. Details of direct votes and proxies lodged prior to the AGM to this resolution appear on the screen. And as I mentioned earlier, they were uploaded on the ASX platform earlier. Belinda, could you please read any questions we received in advance of the meeting on the capital return? And with any shareholder or proxyholder here in Brisbane, and wishes to ask a question on this resolution, now move to the nearest microphone.

Thank you, Chairman. We have received a question from shareholders, Mr. James Fletcher and Ms. Maria Fletcher, they ask. Given that the sale of Suncorp Bank was delayed, why is it taking so long for shareholders to receive the payout of the proceeds from the sale, all shareholders be paid interest on the outstanding returns.

Thank you, Mr. Anders Witcher. As I mentioned in my opening address and just now, there are a number of reasons why this has been delayed. Suncorp has a strong history of returning capital in excess of the needs of the business to shareholders, and we do intend to return the majority of proceeds from the sale of the bank in line with this commitment. The approvals that we had to get from the Australian Competition Tribunal, the Australian Competition, ACC, CCC and the Federal Treasurer under the FSA in addition to the Queensland government passing special legislation to amend the Metway Merger Act have all led to the elongation of this timetable. And as I mentioned before, this hasn't really been within Suncorp's control. So while the regulatory completion of the bank took place on 31 July, there's still a number of steps that we have to take before the capital initiative can proceed. This is all set out in the notice of meeting on Page 12. I won't go through all of those resolutions.

Thank you, Chairman. Next question comes from shareholder, Ms. Anita Novero. Now that Suncorp Bank has successfully been sold to ANZ, when will we see the cash payment come through to our account and what will be the amount per share for shareholders?

Thank you, Ms. Navara. I think this question is also just been covered with the previous answers and my opening address. We estimate the payment of the special dividend and the return of capital will likely be around the first calendar quarter of 2025. But again, there's a timetable on Page 13 of the Notice of Meeting, which all shareholders have seen, which sets that out, and the final amount per share will be known after we receive all the relevant approvals. Are there any more questions, Belinda online?

Thank you, Chairman. That concludes the questions received in advance for this item of business, and we can now move to questions in the room.

Microphone #1.

Chairman, may I please introduce Jerry Newton, who is a shareholder.

My wife has shared a dividend reinvestment scheme, and we believe that those shares are not to participate in this repayment from the sale of the bank. Is that true?

You can address that.

I might get, Jeremy, are you across the ERP elements of it.

It won't apply to the special dividend.

It won't apply to special...

So the purpose of this is to return excess capital. So it doesn't make sense for us to issue new shares to shareholders. But Jeremy, did you want to add?