Suncorp confirms FY 2025 reinsurance programme placement

The cost of the FY 2025 programme is expected to be similar to FY 2024.

Suncorp announced the successful placement of its fiscal year 2025 (FY 2025) reinsurance programme. 

CEO Steve Johnston highlighted the program's focus on balancing costs, earnings, and capital volatility. 

With stability returning to global reinsurance markets after years of disruption, insurance premiums for customers in Australia and New Zealand have risen due to reinsurance costs and broader inflation.

Key points of the FY25 reinsurance programme include:

• Maximum event retention of $350m for the first large event and $250m for the second.
• Coverage for Home, Motor, and Commercial property portfolios in Australia and New Zealand, protecting losses between $350m and $6.75b.
• Group dropdown covers reducing retention to $250m for subsequent events and $150m for a third and fourth event in Australia.
• Non-renewal of the Queensland home portfolio quota share agreement, replaced by the Federal Government’s Cyclone Reinsurance Pool (CRP) and improved risk selection.

In New Zealand, buydown cover has been fully placed to provide coverage between NZ$200m and the Group’s maximum event retention. 

This is an increase from the 52% placement with an NZD$100m attachment point in FY24.

The cost of the FY25 catastrophe reinsurance programme is expected to be similar to FY24. The natural hazard allowance for FY25 will increase to $1.57b from $1.36b, reflecting inflationary pressures and changes in the reinsurance programme structure. 

The final allowance will be updated with full-year results on August 19, 2024.

Suncorp aims to maintain its underlying insurance margin within a 10% to 12% range. The FY25 reinsurance programme changes have no significant impact on the Group's target capital.