Suncorp Group Ltd Secures FY27 Reinsurance and Reaffirms Profit Guidance
Suncorp secures FY27 reinsurance program and reaffirms upper-end FY26 profit guidance
Suncorp (ASX: SUN) has successfully placed its FY27 reinsurance program and reaffirmed that its Underlying Insurance Trading Ratio (ITR) is expected to reach towards the upper end of its 10-12% range, ahead of its full-year results.
The renewal adds aggregate protection as a structural enhancement, complementing the main catastrophe program and reducing earnings volatility. Suncorp will release its FY26 results on 12 August 2026 at 10:00am.
Acting CEO Jeremy Robson said the renewal reflected continued discipline in the Group’s reinsurance strategy, balancing cost, earnings volatility and capital efficiency.
When big ASX news breaks, our subscribers know first
FY27 reinsurance structure strengthened with aggregate cover
Suncorp has now placed its main catastrophe program for FY27, which maintains the maximum event retention of $350 million for a first and second large event. The program covers the Home, Motor and Commercial property portfolios across Australia and New Zealand.
The layered structure combines the newly placed catastrophe cover with the 5-year aggregate arrangement previously announced on 24 April 2026, which commenced on 30 June 2026. Combined with dropdown covers, the retention for a third and fourth event in Australia is reduced to $150 million.
The 5-year aggregate reinsurance arrangement, commencing 30 June 2026, was structured to keep the economic cost broadly neutral through modelled recoveries and profit share commissions, while delivering a one-off capital release of approximately $100 million.
Key features of the FY27 program include:
-
Main catastrophe program: protection for losses between $500 million and $6.4 billion, including one full prepaid reinstatement
-
Coverage across Home, Motor and Commercial property portfolios in Australia and New Zealand
-
Aggregate cover: $800 million annually, up to $2.4 billion over the 5-year period, with an FY27 attachment point of $1,850 million
-
Structured multi-year cover (from July 2025): losses between $350 million and $500 million for a first and second event
-
Third and fourth event retention in Australia reduced to $150 million
-
New Zealand buydown cover between NZ$200 million and the Group’s maximum event retention
| Cover Type | Attachment / Range | Limit | Notes |
|---|---|---|---|
| Main Catastrophe Program | $500m – $6.4bn | Up to $6.4bn | One full prepaid reinstatement; AU & NZ |
| Structured Multi-Year Cover | $350m – $500m | $150m layer | First and second event (from July 2025) |
| Group Dropdown Cover | $350m – $500m | — | Third and fourth event |
| Aggregate Cover | Attachment $1,850m | $800m annually / $2.4bn over 5 years | Previously announced 24 April 2026 |
| New Zealand Buydown | NZ$200m – max event retention | — | Included in aggregate cover |
Acting CEO Jeremy Robson
“The FY27 reinsurance program demonstrates our focus on optimising returns while ensuring appropriate protection for our customers and shareholders.”
What reinsurance means for insurers — and why this matters
The natural hazard allowance is the amount an insurer budgets for expected catastrophe claims across a financial year. Suncorp has reaffirmed its FY27 allowance at $1,800 million, excluding claims handling expenses and profit commission.
The aggregate cover is expected to cap natural hazard costs at $1,850 million in approximately 90% of scenarios for FY27.
FY26 outlook — profit resilience despite natural hazard overrun
Suncorp reaffirmed that its Underlying ITR is expected to be towards the upper end of the 10-12% range, despite natural hazard costs running above allowance during the year. Total reinsurance costs in FY27 are expected to be above FY26, reflecting the inclusion of aggregate cover and exposure growth, partly offset by improved pricing in the main catastrophe program.
Natural hazard experience was approximately $250 million above the FY26 allowance of $1,770 million, driven by 18 separate events above $10 million during the period.
Gross written premium (GWP) growth is expected to be approximately 2.7%, impacted by an ongoing weak economy and soft commercial market in New Zealand, alongside a marginal reduction in demand in Australia.
Total investment income is expected to be between $750 million and $800 million. The lower figure relative to FY25 is predominantly driven by rising bond yields resulting in mark-to-market losses in both insurance funds and shareholders’ funds. The exit yield on insurance funds as at 30 June was approximately 5.2%.
Key FY26 outlook items include:
-
GWP growth of approximately 2.7%
-
Total investment income of $750m–$800m
-
Insurance funds exit yield of approximately 5.2% at 30 June
-
18 natural hazard events above $10 million, with estimated total FY26 natural hazards of approximately $2,020 million
| Item | FY26 ($m) | FY25 ($m) |
|---|---|---|
| Investment income on insurance funds | ~440 – 450 | 741 |
| Investment income on shareholders’ funds | ~310 – 350 | 486 |
| Total investment income | ~750 – 800 | 1,227 |
The next major ASX story will hit our subscribers first
Capital release and what comes next
Beyond the reinsurance renewal, Suncorp flagged capital efficiency benefits from its updated program. In addition to the one-off capital release of approximately $100 million through lower capital targets announced on 24 April 2026, the company expects the aggregate cover will allow for a reduction in the amount of excess capital held above the midpoint of its target range. Further details will be provided at the FY26 results.
On leadership, Steve Johnston is returning from medical leave effective Monday 6 July 2026. Jeremy Robson, who has been Acting CEO, will return to his substantive role as CFO, and Neil Wesley, who has been Acting CFO, will also return to his substantive role.
Key upcoming milestones include:
-
6 July 2026 — Steve Johnston returns as CEO
-
12 August 2026 — FY26 results briefing at 10:00am, available via live video webcast
Further detail is expected at the FY26 results briefing.
Stay Ahead on ASX Finance and Insurance News
Big News Blast delivers FREE breaking ASX announcements straight to your inbox within minutes of release, complete with in-depth analysis already done. Join 20,000+ subscribers who never miss a market-moving update. Click the “Free Alerts” button at StockWire X to get the next big financial sector announcement before the market moves.