Suncorp's improving insurance business has driven a 48 per cent rise in first half profit, but analysts question whether higher premiums could eventually hurt the company.
Another period of benign weather conditions, improved financial markets and premium rises helped the financial firm's net profit in the six months to December rise to $574 million.
Suncorp's insurance business, which includes the AAMI and GIO brands, made a $564 million profit, more than three times the $162 million it made in the previous corresponding period.
The company's written premium increased by more than nine per cent to $4.2 billion in the six months to December, reflecting in part higher premiums in home and motor insurance.
Patersons economist Tony Farnham said Suncorp's insurance business should continue to be the driver of the company's financial performance, barring further natural disasters.
"This said, we still question Suncorp's ability to keep its customer base intact as disquiet grows about premium increases and competitors like the big four (banks), Wesfarmers and internet insurers nip at its heels," he said.
Suncorp benefited from a lack of natural disasters in the second half of calendar 2012, but since then has incurred claims worth up to $270 million from floods caused by ex-tropical cyclone Oswald and bushfires.
That has taken total claims in the financial year to date to up to $417 million, which remains below its full year allowance of $520 million.
"Our outlook is one of cautious optimism," chief executive Patrick Snowball told analysts.
There is a risk of more weather events, as well as continued volatility in financial markets and the global economy, he said.
But Suncorp is making good progress on its transformation strategy, he said, which will deliver an additional $200 million in annual savings from the 2015/16 financial year, on top of the targeted $235 million in savings.
Despite the profit growth, Suncorp's shares fell in response to a lower than expected payout ratio of profits to shareholders.
Suncorp increased its interim dividend by 25 per cent to a fully franked 25 cents per share, equal to 52 per cent of the company's cash earnings in the period.
That was below its target range of 60 per cent to 80 cent.
Mr Snowball said that target ratio would be met for its full year dividends, and indicated the company was taking a cautious approach in case of further natural disasters in 2013.
Suncorp shares were down 25 cents, or 2.2 per cent, at $11.42 at 1456 AEDT.