Suncorp updated the market today, with revised cat claim numbers post a series of storms on the East coast.

The total natural hazards allowance for the full year is $1360, and so this number remains within both guidance and street estimates.

There was also an extra c$100m of reserve strengthening, across most lines of business. That put a modest dent in the odds for SUN surprising the market to the upside.

Overall, margins are expected to remain within the guided level, and the ongoing issues with cat claims and prior period reserve strengthening (meaning things in the past that prove to be worse than expected necessitating more capital to be allocated against them for expected losses) are continuing to drive gross written premiums (GWP) to ever higher levels.

Over time, SUN, IAG, QBE, really all of the insurance companies, continue to reprice policies to reflect these risks.

Overall, some positives, some slightly stronger mild negatives, but nothing to change our positioning or views on the stock.

Key catalyst remains the sale of the SUN bank to ANZ, and whether that gets up with the regulator/tribunal on effective appeal.

Our view is that it will, we won’t have to wait long to find out.

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