Australian insurance giant Suncorp Group Ltd (ASX: SUN) has provided a bushfire and natural hazard update this afternoon.
Suncorp told the market that it has received more than 2,600 bushfire-related claims since September 2019 with a total estimated cost of between $315 million to $345 million, which includes attritional bushfire costs.
The company has deployed assessors, builders, client managers and customer support teams in New South Wales, Victoria, South Australia and Queensland.
Affected homeowners have been assigned a dedicated client manager to make the claims process as smooth as possible. Those affected customers can access temporary accommodation, emergency funds and financial assistance. A financial relief package is also available for Suncorp Bank customers.
As a way to help the region recover, local trades are being prioritised to assist with the rebuild.
Suncorp expects to deploy teams this weekend to the NSW towns of Ulladulla and Batemans Bay, and the Victorian town of Bairnsdale. When it is safe, teams will be sent to the South Coast of NSW and East Gippsland in Victoria.
All of the assessments for claims lodged in relation to the November 2019 bushfires on the NSW Central Coast as well as Central Queensland have now been completed. The assessments in the Adelaide Hills region are expected to finish this week.
Suncorp CEO Steve Johnston spoke about the recovery effort needed, "This recovery is going to take a long time – as one of Australia's largest insurers we understand the role we need to play in that process. We are committed to continuing to do everything possible to help people and communities get back on their feet.
"While our immediate focus is on helping customers recover, mitigation and resilience is something we all need to prioritise when this situation has stabilised."
Natural Hazard Update
In the December 2019 half year Suncorp recorded seven natural hazard events greater than $10 million and attritional claims of $159 million, which includes $26 million of bushfire-related claims which were outside of three designated bushfire events.
Total natural hazard costs for the six month period were $519 million, $109 million higher than the company's first half natural hazard allowance.
In addition, costs for claims incurred between 1 January to 5 January are estimated to be $75 million to $105 million.
Foolish takeaway
It's hard to say if Suncorp will benefit over the long-term or not. Insurance premiums will likely go up, but the costs of these weather events – including hail storms – are becoming more and more expensive.
Over the past five years Suncorp has found it difficult to grow its share price. I think there are shares that don't face such uncertain futures because of weather and climate conditions. I think there are easier opportunities out there.
