Australian insurer Suncorp has provided an update to the recent hail and wind event which swept South Australia, Victoria and Tasmania in late October.
The number of home and motor claims from the event, as of November 3, totals 12,000.
While the full extent of this event’s damage is still being realised, claims are expected to rise further and result in a total cost of between AU$225 million and AU$250 million.
This brings the estimated net cost of natural catastrophes in the current financial year to between $597 million and $702 million.
Commenting on the update, Group CEO Steve Johnston reiterated the need for greater investment in mitigation and resilience to make homes and communities safer before natural disasters occur.
“Disaster mitigation, rather than disaster clean-up, is what Australia needs to focus on. Preparing our homes and communities to better withstand extreme weather is a smarter investment than rebuilding,” he said.
Including this latest event, there have been six declared weather events in October. Suncorp has a comprehensive reinsurance program in place that includes an Aggregate Excess of Loss treaty (AXL) providing $400 million of cover in excess of a $650 million retention for loss event costs above $5 million.
The events to date are estimated to have eroded between $456 million and $561 million of the deductible for the AXL.
Suncorp also has a primary cat program limiting individual event retention to a maximum of $250 million with an upper limit of $6.5 billion.
In addition, the group has three dropdown covers which in aggregate provide an additional $450 million of protection against large natural hazard events.
The full year outlook for natural hazard costs is in the range of $1.105 billion and $1.130 billion, exceeding the FY22 allowance by as much as $150 million.
Suncorp’s full year natural hazard allowance is $980 million divided equally between the first and second halves of the financial year.
This outlook assumes that gross natural hazard costs for the remainder of the financial year remain in line with Suncorp’s natural hazard allowance.
Commenting further on the company’s update, Johnston said, “Our local assessors and tradespeople are on the ground and helping affected customers. We encourage all impacted customers to lodge their claim as soon as possible.
“One of the key elements of our Best in Class Claims strategy is a more flexible workforce, which has been successfully scaled up to support this event. Our focus on the digital customer experience is also yielding positive results with more than half of all home and motor claims from this event lodged online.
“The Group’s supply chain is responding well and we are not currently experiencing issues due to border restrictions. We will continue to work closely with governments and the Insurance Council of Australia to ensure we can respond to customers as quickly as possible.”
