Suncorp renews reinsurance and reaffirms margins
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The news: Insurer Suncorp has renewed its FY25 reinsurance program amid stability in global reinsurance markets and confirmed its FY24 margins.
The numbers: Suncorp will hold a reinsurance for a maximum of $350 million for a first large event and $250 million for a second large event. Its main catastrophe program covers the home, motor and commercial property portfolios across Australia and New Zealand, with the cover providing protection for losses between $350 million and $6.75 billion.
It has also purchased group dropdown covers that reduce the second, third and fourth event retention to $250 million, and the Australian dropdown program to reduce retention for a third and fourth event to $150 million.
The context: Suncorp expects the natural hazard allowance for FY25 to increase to $1.57 billion, reflecting inflationary pressures. This figure is likely to come in at $1.23 billion in FY24.
The insurer reaffirmed that underlying margins for FY24 are likely to be around the middle of the 10% to 12% range.
What they said: “It is pleasing to see stability return to global reinsurance markets after three years of disruption," Suncorp group CEO Steve Johnston said.
"Reinsurance is a major input cost to the price of insurance products and this, along with broader economy-wide inflation, have driven up the cost of insurance premiums for customers in Australia and New Zealand."
The source: ASX announcement
