Suncorp bank leaves amid insurance bite

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This increase was “driven by the bank’s consistent competitive offerings, improved turnaround times and improved credit reporting efficiency,” Suncorp said.

This comes amid stiff competition with banks, including Suncorp, arguing that speeding up approval times is essential.

The bank’s business loan portfolio fell 0.5% to $ 11.31 billion. This contraction was due to lower commercial lending as investment projects were completed and customers sold properties to “take advantage of the appreciation in property values,” Suncorp said.

The banking figures come after Suncorp – and insurance rival IAG – said last week that late October hail and storms in Victoria, South Australia and Tasmania would prove costly.

IAG said last Tuesday that it expected the costs of inclement weather and other natural disasters to total $ 1.05 billion for the year, up from its initial budgeted internal allocation of $ 765 million.

Suncorp then said Thursday that it expected $ 1.105 billion to $ 1.13 billion in such claims for the year, which was higher than its initial allocation of $ 980 million.

Damage figures cemented a worrying trend, as detailed earlier in The Australian Financial Review, this year being the most disastrous start for Suncorp in at least five years.

Expectations of an explosion in risk costs came despite Suncorp having continuously increased this budget in recent years and, on their own, would hurt earnings expectations by nearly 10%, said Nigel Pittaway, analyst at Citigroup. .

He pointed out that Suncorp’s estimated costs of recent hailstorms and wind storms in southern Australia, between $ 225 million and $ 250 million, would likely be less than the reinsurance protection level for a single large disaster.

Reinsurance is insurance for insurers. But Mr Pittaway said Suncorp has another side layer of reinsurance for accumulated wild weather events costing more than $ 5 million each. It would now be about to kick in, Mr Pittaway said, then providing Suncorp with $ 400 million in protection for such future events.

One of the side effects he cited was the cost of purchasing new reinsurance protection next year. “With a high probability his side [reinsurance] hedge is used, we could see a further increase in the cost of volatility hedges at the next renewal scheduled for July 1, 2022, ”he said.


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