Why the Suncorp (ASX:SUN) share price is dropping today

Recent stormy weather is weighing on the Suncorp share price…

| More on:
disappointed and sad woman

Image source: Getty Images

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 trading lower on Thursday morning.

At the time of writing, the insurance giant's shares are down 1% to $11.23.

Why is the Suncorp share price under pressure?

The Suncorp share price has come under pressure this morning after following the lead of rival Insurance Australia Group Ltd (ASX: IAG) by releasing an update on recent claims.

This follows the hail and wind event which occurred on 28 and 29 October, impacting South Australia, Victoria and Tasmania.

According to the release, as of 3 November, Suncorp had received approximately 12,000 home and motor claims. However, as the full extent of damage is still unfolding, the company expects claims to rise further.

So much so, Suncorp is forecasting the total cost from the event to be in the range of $225 million to $250 million.

Suncorp's Group CEO, Steve Johnston, said: "Our local assessors and tradespeople are on the ground and helping affected customers."

"One of the key elements of our Best in Class Claims strategy is a more flexible workforce, which has been successfully scaled up to support this event. Our focus on the digital customer experience is also yielding positive results with more than half of all home and motor claims from this event lodged online."

"The Group's supply chain is responding well and we are not currently experiencing issues due to border restrictions. We will continue to work closely with governments and the Insurance Council of Australia to ensure we can respond to customers as quickly as possible," he added.

What about other events?

Suncorp revealed that there was a total of six declared weather events in October.

And while it is too early to accurately estimate the ultimate costs of the more recent events, Suncorp estimates that its hazard costs currently stand at $597 million to $702 million financial year to date. This is up from $382 million and $492 million just last week.

As a result, the company is forecasting full year natural hazard costs is in the range of $1.105 billion to $1.130 billion. This will exceed its FY 2022 allowance of $980 million by between $125 million to $150 million.

Motley Fool contributor James Mickleboro has no position in any of the stocks 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 Market News

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Broker Notes

These ASX 200 shares could rise 50% to 60%

Brokers believe these shares could deliver big returns for investors.

Read more »

A girl is handed an oversized ice cream cone with lots of different flavours.
Best Shares

8 ASX All Ords shares that tripled in value in FY25

Just 8 out of the 500 companies making up the ASX All Ords achieved share price growth of 200% or…

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Woman with a scared look has hands on her face.
Broker Notes

Bapcor shares fell more than 30% yesterday. Should investors buy in the dip?

Is this a value opportunity?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Broker Notes

Broker raises price targets on 2 ASX 200 shares to buy

Ord Minnett has just upped its 12-month share price targets on 2 buy-rated ASX 200 stocks.

Read more »

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 male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why DroneShield, Gentrack, Metals X, and Northern Star shares are tumbling today

These shares are ending the week in the red. But why?

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 »