Aug 9 (Reuters) – Australia’s Suncorp Group (SUN.AX) on Wednesday posted a sharp jump in full-year cash earnings and said it expects an improvement in margins in the medium term from higher renewal premium rates in its insurance segment.

The country’s second-biggest insurer by market value posted annual cash earnings of A$1.25 billion ($817.38 million), compared with A$673 million a year earlier.

The higher earnings came on the back of improved underlying margins, boosted by higher interest rates, and a significant turnaround in investment returns.

Net gain from yields and investment markets was A$724 million for the year, compared with a loss of A$190 million in 2022, the company said in a statement.

The company declared a fully franked final dividend of 27 Australian cents per share, compared with 17 cents a year earlier.

Last week, the company’s A$4.9 billion banking arm sale to ANZ Group Holdings (ANZ.AX) was blocked by the country’s competition regulator.

Suncorp now expects the separation and other costs related to the deal to increase from A$500 million to between A$575 million and A$600 million.

The Brisbane based insurer said on Wednesday it was changing its operating model with main business now revolving around three core insurance functions: Consumer, Commercial & Personal Injury and New Zealand.

($1 = 1.5295 Australian dollars)

Reporting by John Biju and Nausheen Thusoo in Bengaluru; Editing by Shilpi Majumdar and Shinjini Ganguli

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