Suncorp flags near-term hit from natural hazard costs, posts robust HY cash earnings
Suncorp indicated a modest upward trend in the number of natural hazard events in the near term, adding that the more recent La Niña conditions appear to be neutralizing.
“However, indications are that global reinsurance markets (will remain) in a tightening cycle with higher return hurdles and capital constraints affecting the cost of reinsurance and risk retention ,” the company said in a statement.
For the first half ended December 31, Suncorp recorded strong top-line growth across the group on improved underlying margins and positive investment income, as well as a supply release of A$150 million for potential business interruption claims.
That boosted the insurer’s half-year cash earnings to A$588 million ($408.37 million), from A$361 million a year ago. However, that missed a UBS estimate of A$674 million.
Suncorp said it received about 53,000 claims related to weather events during the period, which led the group to exceed its natural hazard allowance by A$99 million ($68.83 million).
Suncorp, which announced the sale of its banking arm to lender Australia and New Zealand Banking Group last year, declared an interim dividend of 33 Australian cents per share, up from 23 Australian cents per share on last year.
The insurer, however, said that global geopolitical events remain uncertain with inflationary pressures expected to remain in the near term.
($1 = 1.4399 Australian dollars)
(Reporting by Roushni Nair and Nausheen Thusoo in Bengaluru; Editing by Shailesh Kuber)