Australia — BUSHFIRES in NSW are tipped to cost Suncorp up to $70 million, making it the one of the most costly pre-summer disasters for the insurer in recent years.
Almost 400 claims from the fires, which have razed areas including the Blue Mountains, had been recorded as of Tuesday, said Suncorp. Its brands in the state include GIO and Apia.
That latest cost estimate for the industry, according to the Insurance Council of Australia on Sunday night, was for 1041 claims worth $145 million.
The disaster’s bill for Suncorp is between $60 million and $70 million – well within Suncorp’s budget of $565 million for the year. Credit Suisse analyst Andrew Adams, in a note to clients, estimated the insurer would end up having $205 million of that budget remaining for large events.
The fire is also on the smaller scale of big calamities such as flooding.
Yet an examination of Suncorp filings since spring 2010 show the fire is one of the more costly disasters coming before summer kicks in, with its traditional battering of cyclones, flooding and hail.
New Zealand earthquakes have previously triggered bigger headline numbers but Suncorp’s cost was diffused thanks to their own reinsurance protection. That protection does not kick in for the fires.
It gives a hard lead-in to summer, but Suncorp chief executive Patrick Snowball last week pointed out progress had been made with governments on mitigating flood damage. He also told The Courier-Mail a “huge amount of work” had gone into making North Queensland housing more resilient.
The fire damage bill was filed along with accounts showing the blitzkrieg pace of home lending at Suncorp’s banking arm had eased in the last quarter. Growth for the quarter was at 1.1 per cent to $37.5 billion, down from 2.5 per cent recorded in the same period a year earlier.
Suncorp argued they were growing prudently in a “highly competitive” market.
CS’s Mr Adams predicted Suncorp’s growth targets of 7-10 per cent, for the whole bank, would be “difficult to achieve in the near term”. But he described Suncorp’s bank losses of $18 million for the quarter as low.
Suncorp’s overall troubled loans fell, although the bank noted an increase in troubled agriculture loans of $27 million “owing to a number of small exposures affected by adverse weather conditions”.