- Suncorp Group (SUN) has received over 7600 claims across three states following heavy rainfall and flooding across Australia’s east coast
- Suncorp estimates net claims costs in relation to this event will between $230 and $250 million
- Costs will be capped at $250 million under the group’s main catastrophe program
- Roughly 75 per cent of claims made are from NSW, 20 per cent from Queensland and the remainder is balanced between Victoria and the ACT
- The company expects claim numbers to rise further as customers gain access to affected regions and the extent of damage becomes clear
- Suncorp Group last traded at $9.75 per share
Suncorp Group (SUN) has received over 7600 claims across three states following heavy rainfall and flooding across Australia’s east coast over the past few weeks.
The company expects claim numbers to rise across New South Wales, South East Queensland and Victoria as customers gain access to affected regions, and the extent of damage becomes clear.
Based on the recent claims lodged and preliminary assessments of damage, Suncorp estimates net claims costs will between $230 and $250 million, with the majority of claims to be attributed to a single event across all three states for reinsurance purposes.
The costs of this event will be capped at $250 million under the group’s main catastrophe program.
Suncorp says around 75 per cent of claims are from NSW and 20 per cent from Queensland, with the remainder balanced between Victoria and the ACT.
The company says it welcomed the Queensland and New South Wales Governments’ decision to classify assessors and tradespeople as essential workers so they can travel to flood-affected regions, saying the scale of the disaster necessitates the movement of interstate assessors and repairers so that customers and communities can get back on their feet as soon as possible.
“Suncorp continues to work with our customers, particularly in the hardest-hit areas of the Mid-North Coast of NSW and Western Sydney,” said Suncorp Group CEO Steve Johnson.
“As a country, we need to address how we can protect homes in flood-prone regions through government investment in mitigation infrastructure. We must also improve planning decisions to ensure we are not building new homes in high-risk areas.”
The group also reassured investors that it has a comprehensive reinsurance program in place that will provide strong protection for the remainder of the financial year.
The full limits remain available on all the company’s main catastrophe program and dropdown aggregate reinsurance covers.
In addition to eroding the deductibles on the dropdown aggregate covers, this will further remove the deductible on the group’s aggregate excess of loss (AXL) protection. The AXL provides $400 million of cover in excess of a retention of $650 million, with an event deductible of $5 million.
As of February 28, 2021, $370 million of the AXL deductible had been eroded.
Suncorp Group last traded at $9.75 per share at 9:50 am AEDT.