The Suncorp Group Ltd (ASX: SUN) share price is down 4.1% to $12.39 on Friday afternoon despite the automobile and home insurer revealed it had taken 7,800 claims from customers already as a result of the Sydney hail storm that hit the city on December 20.
Suncorp reports that it has a "comprehensive reinsurance" program that limits the financial impact of the event to Suncorp to $250 million.
Prior to the hail storm Suncorp reported that it estimated "natural hazard costs for the six-month period to 31 December to be $350 million to $360 million, compared to the natural hazard allowance of $360 million."
The scale of the claims (7,800 and rising) is probably what has put off investors today, however, while a claims surge is a negative for Suncorp over the short-term over the long-term as wild one off weather events actually encourage others to take up a policy.
In FY 2018 Suncorp posted a profit of $1,059 million and paid 81 cents in dividends including an 8 cents per share special dividend. Thanks to its strong competitive position it remains a reasonable bet for investors solely focused on income.
