Suncorp, a giant Australian primary insurer, has announced estimated natural catastrophe losses of between $348 million and $408 million for the first four months of its financial year, the majority of which comes from the Queensland hailstorm event in October.
As a result of this active period for catastrophe activity, the insurer has seemingly eroded some of the retention under its aggregate excess of loss reinsurance programme, which provides cover of $400 million above a retention of $650 million, with an event deductible of $5 million.
Overall, Suncorp’s natural hazard allowance for the full-year 2021 amounts to $950 million, which is split equally between H1 and H2 of the financial year.
The per-event deductible means that Suncorp retains the first $5 million of each event, and the maximum retention for a single event in Australia is $250 million under the firm’s main catastrophe reinsurance programme.
All of the natural hazard events Suncorp has been exposed to during the four month period have exceeded this per-event deductible, which suggests that the erosion of the $650 million retention is underway already.
The Queensland hailstorm accounts for the large majority of the loss experience in the period, at between $180 million to $220 million. Suncorp says that as of Nov 6th, it has received roughly 6,400 claims related to this event, of which 3,300 are motor claims, 2,800 home claims, and 300 commercial claims. At the same time, Suncorp is anticipating claims to continue to rise for this hailstorm.
All in all, total events over $5 million amount to between $277 million and $337 million for Suncorp, with other natural hazard attritional claims of $71 million taking the overall loss range for the period to the $348 million to $408 million.
With just four months of the financial year gone, more claims to come from the Queensland hail event, the storm season just getting underway and the bushfire season to come, it’s very possible that Suncorp exceeds its natural hazard budget for the first-half of the year and calls on its reinsurance partners for support during H2 2021 of its financial year.
