Why the Suncorp (ASX:SUN) share price is tumbling lower today

The Suncorp Group Ltd (ASX:SUN) share price is under pressure on Monday following the floods in NSW and Queensland…
The post Why the Suncorp (ASX:SUN) share price is tumbling lower today appeared first on The Motley Fool Australia. –

asx share price falling represented by graph of paper plane trending down

The Suncorp Group Ltd (ASX: SUN) share price is on course to start the week with a decline.

In afternoon trade the insurance and banking giant’s shares are down 2% to $9.93.

Why is the Suncorp share price under pressure?

Investors have been selling Suncorp’s shares on Monday following the terrible floods in New South Wales and South East Queensland this weekend.

With the two states battling the worst flooding in 60 years, investors appear to be expecting a significant increase in claims from Suncorp’s customers.

This afternoon Suncorp provided an update to the market on what is was experiencing on its side.

What did Suncorp announce?

According to the release, as of 10am this morning, Suncorp had received around 1,300 claims relating to the heavy rainfall and floods. But it is unlikely to end there, with the company expecting claims numbers to rise over the coming days.

However, it advised that it was too early to accurately estimate the ultimate number of claims it expects to receive, or the final costs in relation to the recent weather.

Positively, Suncorp has stressed that it has a comprehensive reinsurance program in place for FY 2021, with the full limits remaining available on its main catastrophe program and the dropdown aggregate covers.

It advised that the main catastrophe program has a maximum first event retention of $250 million and that its reinsurance program is further strengthened by an Aggregate Excess of Loss (AXL) protection. This provides $400 million of cover in excess of a retention of $650 million with an event deductible of $5 million. In addition, Suncorp’s FY 2021 natural hazard allowance is $950 million.

Suncorp’s CEO, Steve Johnston, commented: “Our thoughts are with communities contending with this weather and the emergency services personnel and volunteers who are putting themselves in harm’s way.”

“Our Customer Support Teams will be deployed to the most impacted regions when waters recede, and our affected bank customers can access our emergency relief package. Our customers can be assured that we’re committed to their recovery and we will be with them every step of the way,” Mr Johnston said.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Suncorp (ASX:SUN) share price is tumbling lower today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!