Suncorp takes a big hit

Virus crisis, staff pay errors add to costs

AAP

INSURANCE and banking giant Suncorp will take a hit of $133 million on account of the COVID-19 crisis and has revealed incorrect payments to staff will cost it up to $70 million.

Suncorp says COVID-19 will have a range of impacts across its businesses due to the expected sharp deterioration in the economy, increased unemployment and a decline in residential and commercial property prices.

“We have already received thousands of requests for financial hardship from both our bank and insurance customers and have provided discounts and premium waivers to 12,300 insurance customers in Australia and New Zealand and approved $4.05 billion in loan deferrals,” group chief executive Steve Johnston said in a statement.

The news seemed to cheer investors, with Suncorp shares jumping 37 cents, or 4.15 per cent to $9.28 each.

Suncorp outlined a pre-tax net loss of $205 million in its investment portfolio for the March quarter on account of volatility due to the COVID-19 crisis, although it said some of the losses had been recouped in April. It is also expecting an increase in claims across its landlord policies for loss of rental income, but has seen a decline in claim lodgements in the consumer motor insurance business since the introduction of mobility restrictions in March.

It expects gross written premium to be negatively affected by hardship and lower economic activity and said its lending portfolio was likely to

Suncorp chief executive Steve Johnston on the impact of the COVID-19 crisis on the insurance and banking giant contract in the June quarter.

Larger rivals, including Westpac, NAB and ANZ, have announced additional provisions for coronavirus-related losses after social distancing measures introduced in March led to a standstill in economic activity.

In February, Suncorp said a surge of bushfire and hailstorm claims had hit first-half profit, with the insurer’s bottom line also hurt by higher regulatory costs and an increasingly competitive mortgage market.

Suncorp said group costs for the year were estimated to be slightly above $2.7 billion, including pay and leave entitlements remediation to some employees of $40 million to $70 million.

It said an internal review of pay and leave practices had found inconsistencies in rostering and pay systems.

We have already received thousands of requests for financial hardship from both our bank and insurance customers and have provided discounts and premium waivers to 12,300 insurance customers ...