Coast storms help fuel Suncorp claims blowout
DAMAGE from Gold Coast storms have helped trigger a large blowout in wild weather claims for Queensland's insurance giant Suncorp.
Suncorp, whose brands include AAMI and GIO, on Thursday confirmed that a storm system that bashed the east coast would result in so many claims that its own reinsurance protection would be used.
That reinsurance - insurance for insurers - kicks in after Suncorp pays out $250 million in claims.
Suncorp in late December had initially flagged a massive bill from a storm that smashed the Sydney region, pelting cars with massive chunks of hail. That same system had moved upwards to also belt other areas including southeast Queensland, Suncorp said on Thursday.
Along with other earlier blustery weather, including severe storms in Queensland's Wide Bay region in October, Suncorp has now chalked up more than $600 million in insurance costs for the first half of this financial year.
It means Suncorp's budget for disasters - a natural hazard allowance - will blow out for the half year by at least $240 million.
While Suncorp was just underneath the budget for the last full financial year, this latest result is the biggest hit above first-half allowances since 2013, based on Courier-Mail calculations.
Suncorp retains additional reinsurance protection for other disasters, and renews cover halfway through the calendar year. Its shares rose 29c to $12.67 on Thursday.
Shares in Sydney-based rival IAG also rose 10c to $7.01 after revealing its 2019 catastrophe reinsurance program had been lifted by $1 billion, to $9 billion
The move will provide IAG, whose brands include NRMA, RACV and Coles Insurance, with additional protection for extreme events.
The group said the catastrophe program was similar to previous years but with an expectation of more claims from New Zealand.
"Consistent with 2018, the program has been placed to the extent of 67.5 per cent to reflect the cumulative whole-of-account quota share position of 32.5 per cent," IAG said.
"This comprises the original 20 per cent quota share agreement with Berkshire Hathaway, which commenced 1 July 2015, and the combined 12.5 per cent quota share agreements with Munich Re, Swiss Re and Hannover Re which came into force from 1 January 2018."
IAG said it expected the bill from the NSW hailstorm to hit $169 million.