Suncorp Group has released its financial results for Q1 2020, revealing a $133m collective provision assigned to COVID-19 recovery. The company says the pandemic alongside its bushfire recovery has driven the company’s losses.
Additionally, the company reported a $205 million loss (pre-tax) from 31 December 2019 to 31 March 2020.
The company said that before it moved Covid-19 territory it was in a ‘sound financial and operational position’. Referring to the bushfire recovery Suncorp said it has completed 70% of property claims and 80% of motor claims.
The company said: “Over the past 18 months the Group has also been materially de-risked through the exit of the Australian Life Insurance and smash repair businesses, with the proceeds of the latter being retained on the balance sheet.”
Referring to the lower motor claims (25% lower in March/April in Australia and 85% lower in New Zealand ) Suncorp stated: “We are cautious about drawing too many conclusions from these numbers, at least in the short-term, in part due to the rapid increase in motor vehicle usage we have seen following the easing of restrictions here in Australia, in New Zealand and in other offshore jurisdictions. We monitor claims lodgements on a daily basis, and we have already observed a discernible rise in lodgements over the last two weeks.
“The reductions in claims volumes to date have been in the form of small driveable, low-cost and less complex claims and hence we also expect the average claim size to increase during this period.
“We are also mindful of an increase in delayed claims once restrictions have been lifted, from customers that have not been comfortable lodging claims, whether that be due to them wanting to avoid a human interaction or being unable to afford their excess.”
Suncorp did report that consumer motor insurance sales were up 13% YTD.
You can read the full report here.