Suncorp expects first-half natural hazards costs of $570m

The news: Suncorp expects insurance costs from the wild weather on the east coast of Australia over the last few months to amount to around $570 million.

The numbers: The Brisbane-based insurer said it had received over 500 claims relating to Cyclone Kirrily, which hit Townsville last week. Together with five other major events since November, the insurer estimates total net costs at $568 million. Despite the hit, Suncorp expected underlying margins to be in line with previous guidance of around 10-12%. The company also said its prior year reserves were strengthened across several portfolios in the first half, booking a $107 million pre-tax net impact driven by costs inflation.

The context: Tropical Cyclone Kirrily made landfall north of Townsville as a category 2 cyclone on Thursday evening and was declassified to a tropical low on Friday. The reported costs fall within Suncorp's full year allowance of $1.36 billion for natural hazards costs. Suncorp said the full limits on its reinsurance cover remain available into the second half of the year, noting it would recover $14 million from the Cyclone Reinsurance Pool in relation to claims from Cyclone Jasper, which hit Suncorp with $56 million in claims costs.

What they said: Suncorp Group CEO Steve Johnston said: “Since late November we have experienced a series of extreme weather events right along the East Coast, with teams continuing to progress customer claims across Queensland, New South Wales and Victoria."