On January 3, 2019, Suncorp Group Limited (ASX: SUN) has announced an update on the anticipated financial impact of natural hazard events for the six-month period to 31 December 2018.
Suncorp Group Limited is under the financial sector. They provide insurance, banking, wealth management and insurance services. The group was incorporated in 1996 and got listed on ASX in 1988.
Following the notable weather system in the last month of 2018, which resulted in hailstorm across the Sydney, Central Coast, and South east Queensland regions, the Group has received 24,800 claims, and the company expects a rise in the number over the coming weeks as customers will file more claims post-holiday return. It is anticipated that total claims costs will cross the maximum first event retention within Suncorp’s reinsurance program, which limits the financial impact of this event up to $250 million pre-tax.
Additional natural hazard aggregate protection cover will further assist the Suncorp’s reinsurance program. This cover will provide up to $300 million for events greater than $10 million once aggregate costs have reached or surpassed $504 million. As at 31 December 2018, it is anticipated that $415 million of the deductable has been eroded.
The Group is encouraging its customers who are impacted by storm and hail damage to lodge their claims as soon as possible. The Group has established additional motor vehicle assessment and repair centers to streamline the claims process for customers. An additional large-scale Hail Assessment Centre will start their operations from this week in Botany, which is anticipated to increase Suncorp’s capacity to assess up to a total of 900 cars per day across all sites.
Suncorp will provide a further update on natural hazard costs, together with detailed financial results for the six-month period to 31 December 2018, on Thursday, 14 February 2019.
As stated by Suncorp’s CEO Michael Cameron, that their teams are working around the clock to provide support for their customers, assisting them in getting claims assessed as soon as possible and they are also providing emergency make safe repairs. They have also increased the capacity of their call centers too, and soon they are going to set up dedicated hail assessment centers for hail-damaged vehicles.
In the last six months, the share price of the company has shown a negative return of 14.94 percent as on 2 January 2018 and 8.63 percent down over the past One month. The company’s shares ended today’s session on the positive note with share price settling at A$12.670 per share which implies the rise of A$0.290 per share or 2.342%. The market capitalization of the company stands at circa $16.08 Billion.
In FY18, the Group delivered an NPAT of $1,059 million. Insurance segment achieved an NPAT of $739 million, which represents an increase of 2.2% from the prior year. This was primarily achieved by lower natural hazards costs and the realization of claims benefits from BIP initiatives. The NIM (Net interest margin) was broadly flat, with a favorable shift in the funding mix and selected portfolio repricing.