Australian insurer Suncorp has said that it remains “on track” to complete the placement of its reinsurance renewal program by June 30th, following major bushfire and hail losses earlier in the year.
The company reports that it is “well advanced” with the placement of its main catastrophe program and is currently in negotiations for the remainder of the program, including the aggregate covers and quota shares.
Suncorp anticipates that aggregate covers will be the most challenging part of the program, and is considering a “range of potential structures” for these covers.
More than 72,000 claims were lodged across Suncorp’s brands due to the historic bushfires that ravaged Australia through late 2019 into early 2020, as well as the hailstorm that lashed the southeast of the country on January 19th to 20th.
So far, Suncorp says it has finalised 70% of property claims and 80% of motor claims for bushfire customers. For storm, hail & flood customers, over 30% of the 35,000 consumer home claims and almost 60% of the 28,000 consumer motor claims have been finalised.
The comments came as part of a more general update on the impact of the COVID-19 pandemic on the Group.
In particular, significant market volatility has impacted Suncorp’s Insurance Australia investment portfolio in Q3, with a $205 million mark-to-market loss to the end of March.
Going into the COVID uncertainty, the company was uncomfortable with the market risk outlook and put in place some short-term hedges to reduce our credit and equity exposures in late February.
It recorded $43 million of gains from the hedges which helped contain the overall MTM loss to around $200 million for the quarter.
“This is a difficult and uncertain time for the community, and our thoughts are with those feeling the emotional and financial impacts of COVID-19,” said Suncorp Group CEO Steve Johnston.
“Suncorp was quick to respond to this crisis, realigning our business around five clear priorities to guide our response: ensuring the health and safety of our people, supporting our customers, protecting our business, engaging our stakeholders and preparing for the post-COVID-19 environment,” he continued.
“We have already received thousands of requests for financial hardship from both our bank and insurance customers and have provided discounts and premium waivers to 12,300 insurance customers in Australia and New Zealand and approved $4.05 billion in loan deferrals.”
“From an operational perspective, in early March we moved over 90 per cent of our workforce to work from home, and the digital capabilities and systems we already had place positioned us well to manage this transition.”
Suncorp estimates that the full-year cost for 2020 could be slightly above $2.7 billion, including pay and leave entitlements remediation.