Eighteen catastrophe events drove Suncorp's FY26 natural hazard bill to approximately AU$2,020 million. The total exceeded the group's annual allowance by roughly AU$250 million. The FY27 reinsurance programme has now been completed in one of the most competitive renewal seasons ANZ cedents have seen in years.
The main catastrophe programme protects Home, Motor and Commercial property portfolios across Australia and New Zealand. It covers losses between AU$500 million and AU$6.4 billion with one full prepaid reinstatement. The maximum event retention is maintained at AU$350 million for a first and second large event.
The programme builds on a five-year aggregate reinsurance arrangement that commenced on June 30. The aggregate cover provides AU$800 million of annual protection and up to AU$2.4 billion over the full term. The FY27 attachment point is set at AU$1,850 million.
The South-East Queensland hail event in November 2025 was the costliest single event at AU$350 million net. Eastern States severe thunderstorms in October 2025 cost AU$234 million net. South-East Queensland Spring Storms added AU$135 million in the same month.
The full-year overrun followed a first half that had already exhausted much of the annual budget. Suncorp's 1H26 natural hazard costs reached AU$1.319 billion. That figure sat AU$453 million above the half-year allowance. Profit after tax fell to AU$263 million from AU$1.1 billion in 1H25, though the underlying insurance trading ratio held at 11.7%.
The aggregate cover is expected to cap natural hazard costs at the AU$1,850 million attachment point in approximately 90% of scenarios in any given year. Suncorp reaffirmed its FY27 natural hazard allowance (NHA) at AU$1,800 million. The NHA excludes claims handling expenses and profit commission.
The structured multi-year arrangement from July 2025 remains in place for losses between AU$350 million and AU$500 million on first and second events. Dropdown covers for third and fourth events reduce the Australian retention to AU$150 million when combined with the aggregate. New Zealand buydown cover remains in place between NZ$200 million and the group's maximum event retention.
Total reinsurance costs for FY27 are expected above FY26 levels. The aggregate cover and exposure growth add to the cost base. Improved main catastrophe pricing will partially offset the increase. The aggregate cover is also expected to allow a further capital reduction beyond the AU$100 million release from April 2026.
The timing of the placement reflects a broader shift in reinsurer appetite. Reinsurance capital reached a record US$785 billion at year-end 2025, per Ledger Investing. That surplus drove reinsurers back into aggregate covers, prepaid reinstatements and cascading all-perils coverage. Suncorp had stepped away from frequency protection in 2023 when the economics became unworkable.
By mid-2026, those conditions had fully reversed. Loss-free property catastrophe business in Australia and New Zealand saw rate reductions of 10% to 15% at the July 2026 renewals, per Howden Re. The Asia-Pacific property catastrophe rate-on-line index fell 19% at the same renewals, per Guy Carpenter.
The ANZ market's scale also deepened the competitive pressure at renewal. Total net reinsurance expense across Australian general insurers reached AU$2.46 billion in the March 2026 quarter alone, per APRA data. Howden Re noted that diversification benefits and adequate returns keep reinsurer appetite broad even as rates fall.
Suncorp reaffirmed its underlying ITR for FY26 is expected towards the upper end of the 10% to 12% target range. GWP growth is forecast at approximately 2.7%, weighed down by a weak New Zealand economy and softer Australian demand.
Investment income is expected between AU$750 million and AU$800 million, down from AU$1,227 million in FY25. Rising bond yields drove mark-to-market losses in both insurance and shareholders' funds. The exit yield on insurance funds as at June 30 stood at approximately 5.2%. CEO Steve Johnston returned from medical leave on July 6, with Jeremy Robson reverting to CFO.
