Suncorp provides update on ex-Tropical Cyclone Kirrily

Suncorp provides update on ex-Tropical Cyclone Kirrily

Suncorp provides update on ex-Tropical Cyclone Kirrily | Insurance Business Australia

Catastrophe & Flood

Suncorp provides update on ex-Tropical Cyclone Kirrily

Key financial metrics also released

Catastrophe & Flood

By
Roxanne Libatique

Suncorp Group (Suncorp) has provided insights into the aftermath of ex-Tropical Cyclone (TC) Kirrily and offered a preliminary overview of key financial metrics impacting its 1H24 results, including top-line growth, natural hazards, investment markets, and prior-year reserve strengthening.

Ex-Tropical Cyclone Kirrily claims

As of January 29, Suncorp had received just over 500 claims from customers affected by the cyclone, with the majority relating to home claims.

Suncorp CEO Steve Johnston said communities in the path of ex-TC Kirrily were largely spared from severe weather conditions.

“While this means we have seen less damage than expected in the more densely populated coastal communities in North Queensland, we are seeing significant rainfall and storms in southern parts of the state, and we will be closely monitoring the movements of the system over coming days,” he said. “Since late November, we have experienced a series of extreme weather events right along the East Coast, with teams continuing to progress customer claims across Queensland, New South Wales, and Victoria.”

“We are also continuing to ensure our teams are on the ground, meeting face-to-face with our customers in the most impacted areas, including Cairns and the Gold Coast,” Johnston said.

Natural hazard costs

According to Suncorp, the total cost of natural hazard events for 1H24 is anticipated to be $568 million, stemming from six significant events. These events, occurring between November 2023 and December 2023, include rain, storms, hail, cyclones, and holiday-related storms.

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Suncorp’s natural hazard allowance for FY24 stands at $1,360 million, with a robust reinsurance program in place to manage major events, it stated.

Reserving update

In 1H24, prior-year reserves were strengthened by $107 million pre-tax, net of loss component movements.

Johnston attributed the reserve strengthening to various external challenges affecting the insurance industry, such as supply chain constraints and higher third-party settlements in the motor and home portfolios. Notably, reserve strengthening in motor and home portfolios was $56 million and $32 million, respectively.

Top line growth and underlying margins

Suncorp expects strong top-line growth in its general insurance businesses for 1H24, with gross written premium (GWP) growth exceeding guidance. The first half results align with expectations, with FY24 underlying margins anticipated to be within the 10% to 12% range.

Investment income

Investment income for insurance funds and shareholders’ funds is projected to align with previously communicated sensitivities, with totals reaching $608 million in 1H24. Notably, Suncorp remains vigilant in managing its investment income in line with expectations, the company stated.

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