Suncorp shares rise after securing five-year reinsurance cover
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The news: Shares in Suncorp rose in afternoon trade after the insurer purchased a five-year aggregate reinsurance cover and disclosed that its insurance trading result (ITR) for FY26 is expected to reach the upper end of its 10%-12% target range.
Shares had risen 4.84% to $17.11 at 1:07pm AEST.
The context: The reinsurance cover, effective 30 June, will provide $800 million of annual protection, totalling $2.4 billion over the five year period.
The FY27 attachment point for the aggregate cover is $1.8 billion, which is expected to cap natural hazard costs at that level in roughly 90% of scenarios in any given year.
The agreement is expected to reduce overall volatility in net claims costs, allowing for a one-off release of approximately $100 million in capital through a modestly lower capital target.
Despite reiterating its ITR guidance for FY26, Suncorp expects gross written premium growth to be approximately 3%, a reduction of 0.4% due to ongoing weakness in the NZD and the impact from improved risk mix shifts in home insurance.
What they said: "The underlying margin outlook remains unchanged at the upper end of our target range but with significantly improved resilience and reduced volatility in earnings,” Suncorp acting CEO Jeremy Robson said.
“This additional aggregate cover, in combination with the remainder of our reinsurance program, increases the resilience of our business to natural hazards and the related uncertainties for the next five years,” he added.
The source: ASX
