Expansion into car parts
Patrick Snowball's cost-cutting drive has steered Suncorp into the car parts business, where it says suppliers can enjoy mark-ups of more than 400 per cent.
Having already tried investing in its own repair shops, the insurance giant on Wednesday announced a joint venture with the US-listed LKQ Corp to supply new and second-hand car parts.
Mr Snowball, Suncorp's chief executive, said it was too early to put a value on the savings, but the move should lower costs.
"We pay $500 million a year for motor vehicle parts, some of that attracting mark-ups of 400 per cent or more," he said. "If you bought all the parts for a $21,000 car, it would cost you $114,000, an increase of 543 per cent."
It comes after a separate joint venture that has resulted in Suncorp having a stake in 23 smash repair shops, which it claims are driving down costs and improving service. But it is still losing share in motor insurance to Coles and Woolworths.
Revenue from car insurance premiums rose by 4.2 per cent to $2.5 billion in Australia in the financial year, but analysts quizzed Mr Snowball about the business losing 2 per cent market share in the past two years.