4 March 2015 Insurance

Cyclone Marcia to cost Suncorp A$150m

Tropical cyclone Marcia, which hit parts of central Queensland, could cost Australian insurer Suncorp up to A$150 million pre-tax.

In an update, the insurer said that it expects claims to reach approximately 10,000 across its insurance brands, with the majority of claims relating to damaged homes in the central Queensland towns of Rockhampton, Yeppoon, Biloela and Maryborough.

The event is expected to cost between A$120 million to A$150 million (pre-tax), net of the 30 percent proportional quota share arrangement covering the Queensland home portfolio.

Suncorp added that, including the costs of this event, it expects its natural hazard expenses for the financial year to date to be in the range of $690 million to A$720 million. The natural hazard allowance for the full year to June 30, 2015 is $595 million.

Patrick Snowball, chief executive officer of Suncorp, said that the impact of two major events in less than six months (the Brisbane hailstorm in November and tropical cyclone Marcia in February) had placed pressure on the group’s return on equity target of 10 percent for the 2015 financial year, which is now unlikely to be achieved.

“It’s disappointing that our return on equity target will unlikely be met, however, the group remains well placed with a resilient balance sheet, solid underlying earnings and a strong culture focused on supporting customers,” he said.

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