* Claims estimate higher-than expected - analysts
* More costs for reinsurance to hurt earnings f'cast
* Earnings downgrades likely to pressure shares further (Adds details, analyst comments)
By Narayanan Somasundaram
SYDNEY, Jan 12 (Reuters) - Australian insurer Suncorp Metway Ltd triggered a possible further downgrade to its earnings forecasts on Wednesday, reporting higher-than-expected flood claims and rising reinsurance costs.
Suncorp, which derives more than a quarter of its annual premium from flood-stricken Queensland state, said in a statement after the market close that it was likely to see additional reinsurance cover of A$120 million.
"The claims estimate is larger than expected but that will be covered by reinsurance. The bigger issue is the A$120 million to reinstate the insurance cover and that will likely result in a further double-digit downgrade to FY11 estimates," said Andrew Adams, an analyst at Credit Suisse.
This week, Credit Suisse cut its 2010/11 earnings forecast for Suncorp, Queensland's biggest insurer, by 12 percent.
Over the past month, floods have washed away a tenth of the insurer's market value, sending its stock to a 4-1/2 month low. This announcement is seen hurting the shares further as investors price in expected downgrades.
Queensland-based Suncorp said reinsurance would limit the cost of claims relating to storm damage in southeast Queensland and Brisbane, the country's third-largest city, to between A$70 million and A$90 million.
It added claims from central and southwest Queensland were expected at between A$130 million and A$150 million and would be included in its half-year results due on Feb 23.
Queensland state has been devastated by floods that has shut most coal mines, sunk rail lines, forced evacuations in Brisbane city and put the brakes on national economic growth.
Suncorp already has 2,500 claims for flood damage. Rival Insurance Australia Group has 900 claims while QBE Insurance has declined to comment.
Suncorp said it expected to exceed its natural hazard allowance for the six months to December 2010 by up to A$180 million.
$1 = 1.013 Australian Dollars) (Reporting by Narayanan Somasundaram; Editing by Mark Bendeich)