Group CEO Steve Johnston expressed satisfaction with the rebalancing of global reinsurance markets after several tumultuous years. "Reinsurance significantly influences the pricing of our insurance products," said Johnston. "Alongside inflation impacting the broader economy, this has contributed to higher insurance premiums in both Australia and New Zealand."

This new protection ceiling exceeds the regulations set by Australian and New Zealand authorities, marking an increase from last year’s $6.4 billion limit.

Noteworthy adjustments in Suncorp's program involve the non-renewal of a quota share agreement for Queensland’s home insurance, attributable to the federal government’s cyclone reinsurance pool. Innovations in risk selection and pricing have notably enhanced resilience. Prior to this, Suncorp had transferred 30% of its Queensland home portfolio to mitigate regional risk concentration.

The company maintains a maximum event retention of $350 million for an initial large-scale event and $250 million for subsequent incidents. The central catastrophe program encompasses home, motor, and commercial properties across both Australia and New Zealand.

Mirroring the previous year, the group has procured drop-down covers to lessen retention costs for the second, third, and fourth events to $250 million. Additionally, the Australian drop-down arrangement still reduces retention for the third and fourth events to $150 million.

New Zealand’s increased retention denotes ongoing ramifications of early last year’s severe weather on reinsurance economics and availability in the region.

Furthermore, full placement of buy-down cover, which includes a prepaid reinstatement, is secured to offer protection between $NZ200 million ($182 million) up to the group’s maximum retention. This is an upgrade from last year’s partial placement of 52% with an attachment point at $NZ100 million ($91 million).

With the anticipated completion of Suncorp’s bank sale on July 31, Johnston commented, "Our renewed reinsurance program places us in a strategic position to evaluate additional covers that may be beneficial."

Suncorp forecasts an increase in its natural hazard allowance to $1.565 billion this fiscal year, from last year’s $1.36 billion, with previous year’s perils costing approximately $1.23 billion. This hike reflects growth in unit numbers, inflation, and enhanced risk retention due to reinsurance modifications.

The insurer remains committed to incorporating its reinsurance costs and natural hazards allowance into the pricing of insurance policies, aiming to sustain its insurance margin within a range of 10%-12%.

Expected to be released on August 19, Suncorp projects its underlying margins for the last financial year to settle around the midpoint of the 10%-12% range. A late-December weather incident drove reserve fortifications for the second half of the year, influenced by supply chain issues and holiday timing affecting claim submissions, altering typical claim patterns and durations.