(Reuters) -Australian general insurer Suncorp on Tuesday forecast a 12% jump in costs associated with catastrophe reinsurance premiums and natural hazards in fiscal 2024 on the back of adverse weather events through the La Niña cycle in recent years.
It now sees the natural hazard allowance for fiscal 2024 to increase to A$1.36 billion ($907.4 million), as compared with A$1.16 billion set aside for fiscal 2023, Suncorp said.
Wild weather swings in Australia and New Zealand in the last couple of years, followed by multiple La Nina patterns swelled rivers beyond their banks and left thousands of flooded homes uninhabitable.
Group natural hazard experience for fiscal 2023 is expected between A$1.25 billion and A$1.28 billion, the company added.
The company also attributed the surge in associated natural hazard costs to a hardening global reinsurance market that is still trying to bounce back from reduced capital inflows, stubbornly high inflation, and a succession of expensive climate change-related secondary peril losses.
Suncorp intends to maintain its underlying insurance margin within a 10% to 12% range, as it continues to reflect increased input costs, the company said in a statement.
"We continue to see a significant reassessment of risk... which reflects elevated natural hazard activity in recent years... This, combined with broader inflationary pressures across the economy, continues to impact the cost of reinsurance across the industry," Suncorp Group CEO Steve Johnston said.
($1 = 1.4993 Australian dollars)