MARCIA BLOWS SUNCORP'S EQUITY TARGET
Written on the 3 March 2015
SUNCORP Group Limited (ASX:SUN) has released an estimated damage bill following Tropical Cyclone Marcia, with the insurer unlikely to reach its equity target.
The Category 5 storm and associated flooding is expected to cost between $120 million and $150 million.
While the insurer's total cost of natural hazard expenses for the financial year will be in the range of $690 million and $720 million, up from its $595 million allowance.
The impact of Cyclone Marcia last month combined with the Brisbane hailstorm in November 2014 has put pressure on the group's return on equity target of 10 per cent in FY15.
"It's disappointing that our return on equity target will unlikely be met, however the group remains well placed with a resilient balance sheet, solid underlying earnings and a strong culture focused on supporting customer's," according to Suncorp CEO Patrick Snowball (pictured).
The insurer anticipates up to 10,000 claims to roll in across its brands, including AAMI, Apia, GIO and Vero.
Assessors are visiting around 100 properties each day in the hardest-hit areas of Rockhampton, Yeppoon, Biloela and Maryborough.
Snowball says the company's priority is ensuring customers return to their homes safely and swiftly.
"Our panel of builders have already commenced work on some properties as we prioritise displaced, elderly and infirm customers," he says.
"We have a long and proud history of supporting Queenslanders through major weather events and this is no exception."