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Australasia, News

Australia insurer Suncorp prepares for higher natural hazard costs

(Adds details from statement, background)

July 1 (Reuters) – Insurer Suncorp Group Ltd on Wednesday forecast higher natural hazard costs for the year through June 2021 than a year earlier when bushfires ravaged Australia, and said the COVID-19 pandemic was likely neutral for earnings in the just-ended year.

Australia’s second-biggest insurer by market capitalisation, after Insurance Australia Group Ltd, also appointed a former Commonwealth Bank of Australia executive to head its banking and wealth unit.

Suncorp said it has set aside A$90 million to A$130 million ($62 million to $90 million) more for natural hazard costs for the financial year started July 1 compared with the previous year, due to greater exposure to market volatility.

It earmarked A$820 million the year prior as surging claims from wildfires, drought and hailstorms weighed on the sector.

Suncorp said the impact of the coronavirus outbreak was likely broadly neutral to underlying earnings in the year ended June 30, excluding some investment market movement and bank impairment losses.

The insurer in May said its banking unit would take a A$133 million hit due to the outbreak.

Suncorp named Clive van Horen as chief executive of its wealth and banking unit, replacing Lee Hatton who left after just three months in the role.

The Brisbane-based firm, which in May said errors had left it underpaying workers, said it would streamline operations and divide accountability for the performance of its domestic insurance business between two, experienced company insiders. ($1 = 1.4486 Australian dollars) (Reporting by Shashwat Awasthi in Bengaluru; Editing by Tom Hogue and Christopher Cushing)


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