Australian primary insurer Suncorp said this morning that its fiscal year aggregate reinsurance arrangement did not trigger, despite elevated natural hazard claims in the period.
Suncorp said that it exceeded its natural hazard allowance by $97 million in the year, after it was impacted by 15 separate weather events and around 130,000 natural hazard claims across Australia and New Zealand.
However, the accumulated losses from catastrophe and weather events during the year only eroded $648 million of the Aggregate Excess of Loss (AXL) reinsurance treaty deductible, which sat at $850 million, so no recoveries were made under that arrangement in FY23.
This is perhaps further evidence of reinsurers moving a little further away from volatility, in higher attachments and new aggregate reinsurance contract terms.
However, Suncorp said that its reinsurance did protect it during the year, capping losses from the two major events at NZ$50 million for the North Island New Zealand Floods and NZ$25 million for Cyclone Gabrielle, net of reinsurance cover.
Total natural hazard costs for the year came out at $1.257 billion, Suncorp said, but for the next fiscal year the insurer has set this higher at $1.360 billion.
The company said that its comprehensive reinsurance has been purchased for the 2024 fiscal year, but premiums were up and it said that changes to the reinsurance program will drive a near $340 million increase in capital required to be held.
As we recently reported, Suncorp did not renew its aggregate reinsurance for the coming year, citing decreasing costs and benefits.
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