Suncorp issues update on reinsurance program following Kirrily

Suncorp issues update on reinsurance program following Kirrily | Insurance Business Australia

Reinsurance

Suncorp issues update on reinsurance program following Kirrily

1H events expected to cost more than half a billion

Reinsurance

By
Kenneth Araullo

Suncorp has issued an update on the aftermath of ex-Tropical Cyclone Kirrily, along with a preliminary review of key financial metrics that are expected to impact its first-half 2024 results, including the status of its reinsurance program.

Ex-Tropical Cyclone Kirrily, which recently made landfall north of Townsville as a category 2 cyclone and was downgraded to a tropical low by Friday, led to over 500 claims from affected customers, predominantly for home damage.

The company maintains a comprehensive reinsurance program for major events. The main catastrophe program has a maximum event retention of $350 million for the first event. There is also additional coverage for medium-sized events and a 30% quota share arrangement related to the Queensland Home portfolio. All reinsurance covers for the group remain fully available for the second half of the financial year, it stated.

Suncorp Group CEO Steve Johnston emphasized the company’s nationwide response to support customers affected by recent extreme weather events, including TC Kirrily. He noted that while the cyclone’s downgrade resulted in less damage in the densely populated coastal communities of North Queensland, significant rainfall and storms were observed in the southern parts of the state.

The financial impact of natural hazard events for the first half of 2024 is estimated at $568 million. This period witnessed six significant events, detailed in an accompanying table, excluding risk margin or claims handling expenses. Suncorp’s natural hazard allowance for the fiscal year 2024 is set at $1,360 million.

Suncorp expects to recover approximately $14 million as part of its reinsurance arrangements with the Federal Government’s Cyclone Reinsurance Pool, related to Cyclone Jasper. This pool provides coverage for property impacts resulting from a cyclone and related flooding for 48 hours after the cyclone concludes.

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