Australian insurer Suncorp has revealed that it expects to make recoveries under its reinsurance program after an “unprecedented” start to both the bushfire and storm season in the country.
The primary insurer announced in early January that its bushfire losses could hit its reinsurance protection as claims continued to rise.
Providing an update on its catastrophe experience, Suncorp has said that it recognised a cost of $145 million in 1H20 for the bushfires that affected Victoria, New South Wales and Tasmania since November. Adding that it expects to incur a further $75 million to $105 million of losses from the event in 2H20, taking its total estimated gross loss for the event to between $220 million and $250 million.
For 1H20, Suncorp expects natural hazard costs to be $519 million, which is unchanged from the ASX update on January 9th.
The insurer adds that since the start of the year it is also facing losses from heavy rain in South East Queensland and New South Wales from the 17th to 18th of January, as well as the South Eastern states hailstorms that hit the country over the 19th and 20th of January.
Combined, Suncorp states that its costs from these three events will be limited to $300 million thanks to protections from its main catastrophe reinsurance program, recoveries made under its drop-down reinsurance and also recoveries from its Natural Hazard Aggregate Protection (NHAP).
Steve Johnston, Suncorp Group Chief Executive Officer (CEO), commented: “This has been an unprecedented start to the bushfire and storm season in Australia. At a time when the industry is responding to multiple large events, Suncorp’s focus is on making the claims process as simple and efficient as possible with customers making good use of our online claims lodgement facility.
“We continue to mobilise our Customer Support Teams on the ground where they’re needed the most and we have also increased the capacity of our contact centres to manage the increased volume of calls from our customers across the east coast. We’ve also ramped up our repair network to start the assessing and rebuilding process.”
In full-year 2020, Suncorp bolstered its reinsurance program and added an Aggregate Stop Loss protection, limiting its natural hazard costs to its allowance of $820 million.
As at January 28th, the insurer had received more than 25,000 claims related to the hailstorms and over 1,400 claims related to the heavy, and the firm expects additional claims to come in over the coming days and weeks.
Suncorp has also provided an update on its reserve releases, saying that for 1H20 it expects reserve releases to be between $50 million and $70 million, compared with $172 million a year earlier.
