Melbourne hailstorm makes massive dent in Suncorp costs
Written on the 8 January 2018 by David Simmons
THE December 2017 storms in Melbourne have made a significant dent in costs for insurance provider Suncorp (ASX: SUN) and is expected to impact its FY18 results.
Following the 19 December 2017 hailstorm in Melbourne, Suncorp is estimating net costs covering damage in the Victorian capital of between $160 million and $170 million.
Suncorp currently expects to receive more than 21,000 claims across its insurance brands, which include AAMI, GIO, Suncorp, Apia, Shannons and Bingle.
The majority of the claims relate to home and motor vehicle damage.
The Melbourne storm is the most severe natural hazard event for the first half of FY18, far exceeding any event by over $100 million.
The second most expensive event for the first half was the Newcastle and Toowoomba hailstorm in October of 2017 with net costs reaching $37 million to cover damage occurring there.
In figures provided to the ASX, Suncorp's total natural hazard bill for the first half of FY18 comes to between $406-416 million. This number exceeds Suncorp's 'allowance for natural hazards' by $60-70 million for 1H18.
Suncorp CEO and managing director Michael Cameron says the insurance company quickly established mechanisms to deal with the Melbourne hailstorm.
"Following the recent storm in Melbourne we quickly established a hail assessment centre in Melbourne's east. This facility is assessing as many as 600 cars per day," says Cameron.
"The centre is designed to quickly triage and assess all hail affected vehicles, so we can make the repair process as seamless and efficient as possible for our customers."
Suncorp's detailed financial results for the six months to 31 December 2017 will be released to the market on 15 February 2018. The significant cost of the Melbourne hailstorm is sure to factor into the half year results.
Shares in Suncorp Group are down 1.33 per cent to $13.70 per share at 11:41 am AEDT.
Business News Australia
Author: David Simmons