Storms hit Suncorp budget
SEVERE storms across Toowoomba in October contributed to financial woes for insurance company Suncorp.
The Courier-Mail reported the Brisbane-based financial giant had blown its insurance budget for wild weather for the fifth year in a row, squeezing profits.
Hailstorms in Melbourne in December, Toowoomba in October and Bundaberg in November were among bad weather events that triggered almost $416 million worth of claims for the first half of 2018, the insurance-banking group told the share market.
In Toowoomba residents described the October 26 hail storm as terrifying.
One woman described large hail hitting her shade cover as “like the revving engines of a huge jet” before it punched through the roof.
The wild weather also caused chaos on city roads
with emergency services responding to a number of incidents in within minutes of each other.
Suncorp had set a $346 million allowance for such events, meaning it underestimated the allowance for every half since 2013.
Exceeding the allowance impacts profitability, with the company to reveal half-year earnings on February 15.
Scott Guse, an insurance expert with advisory group KPMG, said allowances were set for insurers in expectation of catastrophes such as hailstorms or cyclones.
Busting the allowance did not impact an insurer’s solvency or ability to pay out claims.
But Mr Guse said exceeding the allowance would impact profitability and could mean an insurer had underpriced premiums because allowances were partly used in setting pricing.
Suncorp has one slab of reinsurance protection insurance for insurers - if a series of disasters each worth more than $10 million strike.