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Suncorp (ASX: SUN) has come out of two cyclone events during the summer storm period in relatively good shape with the company estimating the total cost of natural hazard events for the first half of FY24 to be about $568 million.
The figure, released today in an update to the market, is well below the $680 million natural hazard allowance for the December half which was led by 19,000 claims received by the company in the aftermath of Tropical Cyclone Jasper and subsequent storms along the east coast.
After Tropical Cyclone Kirrily, the second major cyclone for the period, petered into a tropical low after making landfall on the Queensland coast last Friday, Suncorp says it has received just 500 claims from the event as of last night with most of them from homeowners.
Suncorp has not given an estimate of the total cost of these claims as the latest cyclone caused less damage than expected. Suncorp has a natural hazard allowance of $1.36 billion for FY24.
“Communities in the path of ex-TC Kirrily were largely spared the worst of the wind and rain as the system downgraded and quickly headed further inland,” says Suncorp CEO Steve Johnston.
“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.
“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, NSW and Victoria.”
Johnston says Suncorp is leveraging its full supply chain and expanded builder panel to make emergency repairs, assess damages and start the recovery process.
“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,” he says.
In a breakdown of six significant storm events during the first half of FY24, Suncorp has revealed the east coast holiday storms accounted for more than a third of the $568 million natural hazard total for the period at $212 million.
Cyclone Jasper claims totalled $56 million, followed by the pre-Christmas rain and hail events in Queensland and NSW at $51 million.
In a broader update of its first-half performance for FY24, Suncorp says the result will be supported by ‘strong top-line growth across the general insurance businesses, with gross written premium growth ahead of guidance’.
“We continue to closely manage insurance pricing to respond in line with input costs such as reinsurance and inflation on repairing homes and cars, while also being mindful of the affordability challenges facing our customers,” says Johnston.
“Pleasingly, in the first half we have seen more insurance customers choosing our home and motor products, with strong unit growth in both key portfolios.”
Underlying margins for the full year are expected to be in line with previous guidance of between 10 and 12 per cent.
Investment income for both insurance funds and shareholders’ funds is expected to be $608 million which Suncorp says is in line with expectations.
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