Suncorp will deliver margin despite exposure
(7 February 2010 – Australia) The chief executive of Suncorp, Patrick Snowball, has assured investors that the bank will still be able to deliver a margin increase of at least 3 percent by 2012, despite extensive exposure to the significant damage caused by natural disasters.
As Queensland’s largest insurers and one of Australia’s largest regional banks, Suncorp’s top boss said his company would still deliver the margin increase because of the diversity of the group.
'We have substantial premiums across Queensland, but our exposure in Queensland is not disproportionate to the exposure we have across the whole of Australia,' Mr Snowball said.
'Some people think we have a huge concentration.
'Actually, we have almost the same percentage of the Queensland market for household insurance as we do the rest of Australia.'
He rejected predictions that premiums would rise by about 30 percent in Queensland following extensive claims, but hinted they could increase at some point.
'If you actually look at the exposure of reinsurers to claims in north Queensland, actually it's not that great,' he told ABC-TV.
'If you look at it compared with the earthquake in New Zealand or you look at what happened with (Hurricane) Katrina . . . there are a lot of people who don't have flood insurance in Queensland, and therefore that's not being hit by reinsurers. The reinsurance market is a global market and the thing that actually drives premiums in that market.
'The key thing we've got to understand is if this becomes a year-in, year-out problem, . . . they're going to think that it's going to have to carry a premium.'
Suncorp last week advised the market that it expected its net claims cost arising from Cyclone Yasi to be capped at $10 million, with the rest being covered by reinsurers.
Mr Snowball also indicated that many people in the state did not have flood insurance, adding that Suncorp was the only company to offer the coverage in north Queensland.
Mr Snowball also brushed off suggestions the company could merge its banking business with Bank of Queensland.
'We have substantial premiums across Queensland, but our exposure in Queensland is not disproportionate to the exposure we have across the whole of Australia,' Mr Snowball said.
'Some people think we have a huge concentration.
'Actually, we have almost the same percentage of the Queensland market for household insurance as we do the rest of Australia.'
He rejected predictions that premiums would rise by about 30 percent in Queensland following extensive claims, but hinted they could increase at some point.
'If you actually look at the exposure of reinsurers to claims in north Queensland, actually it's not that great,' he told ABC-TV.
'If you look at it compared with the earthquake in New Zealand or you look at what happened with (Hurricane) Katrina . . . there are a lot of people who don't have flood insurance in Queensland, and therefore that's not being hit by reinsurers. The reinsurance market is a global market and the thing that actually drives premiums in that market.
'The key thing we've got to understand is if this becomes a year-in, year-out problem, . . . they're going to think that it's going to have to carry a premium.'
Suncorp last week advised the market that it expected its net claims cost arising from Cyclone Yasi to be capped at $10 million, with the rest being covered by reinsurers.
Mr Snowball also indicated that many people in the state did not have flood insurance, adding that Suncorp was the only company to offer the coverage in north Queensland.
Mr Snowball also brushed off suggestions the company could merge its banking business with Bank of Queensland.
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