Suncorp (ASX:SUN) share price pushes higher on claims update

Here's how the Victorian severe weather is impacting Suncorp…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Suncorp Group Ltd (ASX: SUN) share price is pushing higher in morning trade.

At the time of writing, the insurance giant's shares are up 1% to $11.34.

Why is the Suncorp share price pushing higher?

Investors have been buying the company's shares this morning following the release of an update on recent severe weather affecting regions across metropolitan and regional Victoria.

According to the release, as at 6:30pm on Monday, Suncorp had received approximately 3,750 claims predominantly for property damage.

But it doesn't expect the claims to stop there. Management notes that as the full extent of damage caused by the heavy rain, severe winds and flash flooding is still unfolding, claims are expected to rise further in the coming days and weeks.

Suncorp's CEO Steve Johnston said: "Victorians have already been through a lot, and we are moving as quickly and as safely as we can to help our customers and communities affected by this severe weather. Our customer support teams are on the ground in Traralgon providing face-to-face support to all our affected customers including AAMI, Apia and GIO, and we have scaled up our flexible claims team to manage the increase in claims and calls from customers."

Natural hazard costs

Suncorp's total natural hazard costs across Australia and New Zealand year to date to 31 May 2021 were $955 million. This was approximately $40 million above the year to date allowance of $915 million. These estimates exclude any associated risk margin or claims handling expenses.

Positively, though, the company has a comprehensive reinsurance program in place and given its remaining covers, the maximum potential loss from this event will be $50 million.

What now?

Mr Johnston believes more needs to be done to prevent events like this from happening.

He concluded; "What we're seeing in Victoria should again act as a reminder to the devastation which can be caused by severe weather events. More needs to be done to better protect homes in flood-prone regions across the country, including improved town planning and government investment in mitigation infrastructure."

The Suncorp share price is up 15% since the start of the year.

James Mickleboro does not own any shares mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

These shares are having a good finish to the week. Let's see why.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Fortescue, Lynas, PEXA, and Regis Healthcare shares are charging higher

These shares are having a strong session on Thursday. But why?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Why Capricorn Metals, Insignia, Perseus Mining, and Qoria shares are storming higher

These shares are having a strong session on Tuesday. But why?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Amaero, AMP, Block, and South32 shares are racing higher today

These shares are starting the week on a positive note. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another momentous session for ASX shares this Friday.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why BHP, Catalyst Metals, Mesoblast, and Pilbara Minerals shares are shooting higher

These shares are ending the week with a bang. But why?

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

The Mesoblast share price just rocketed 38%! Here's why

ASX investors just sent the Mesoblast share price up 38%. But why?

Read more »