Australian insurer Suncorp has completed its core 2027 reinsurance renewal, securing catastrophe cover for losses between $500 million and $6.4 billion, alongside its previously announced 5-year aggregate reinsurance arrangement, which provides $800 million of protection annually, and up to $2.4 billion in total over the period.
Despite continued catastrophe reinsurance softening, Suncorp expects its total reinsurance costs for FY’27 to be higher than last year, reflecting the inclusion of the aggregate reinsurance cover, and also exposure growth partly offset by improved pricing.
The FY’27 main cat programme is $100 million higher at the top of the tower as compared to FY’26, when Suncorp reduced the top of the programme from $6.75 billion in the prior year.
Suncorp’s main catastrophe programme, which covers the Home, Motor and Commercial property portfolios across Australia and New Zealand, maintains the maximum event retention of $350 million for a first and second large event.
The insurer confirms that the structured, multi-year reinsurance arrangement placed in July 2025 is still standing, providing protection for losses between $350 million and $500 million in relation to the first and second large event.
Additionally, for a third and fourth event, the group dropdown covers losses between $350 million and $500 million. When combined with the dropdown cover as part of the aggregate reinsurance cover, the retention for a third and fourth event in Australia is reduced to $150 million.
Buydown cover in New Zealand also remains in place through the aggregate reinsurance cover, providing protection between NZ$200 million and the group’s maximum event retention.
As we reported in April, Suncorp’s five-year aggregate reinsurance cover is expected to effectively cap natural hazard costs at the attachment point in approximately 90% of scenarios in any given year.
Alongside the details of its main cat reinsurance, Suncorp has reaffirmed its natural hazard allowance (NHA) for FY’27 at $1.8 billion, excluding claims handling expenses and profit commission. The aggregate cover is expected to cap natural hazard costs at $1.85 billion for FY’27 in approximately 90% of scenarios.
Jeremy Robson, Acting Chief Executive Officer, Suncorp, said that the renewal reflected continued discipline in the Group’s reinsurance strategy, maintaining an appropriate balance between cost, earnings volatility, and capital efficiency.
He commented, “The FY27 reinsurance program demonstrates our focus on optimising returns while ensuring appropriate protection for our customers and shareholders. While the cost of reinsurance remains an important input to insurance pricing, it is pleasing to see improved market conditions reflected in the pricing of our comprehensive main catastrophe program, now complemented by the addition of aggregate protection to further enhance resilience and reduce volatility.”
