The Suncorp Group Ltd (ASX: SUN) share price is on course to start the week with a decline.
In afternoon trade the insurance and banking giant's shares are down 2% to $9.93.
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Why is the Suncorp share price under pressure?
Investors have been selling Suncorp's shares on Monday following the terrible floods in New South Wales and South East Queensland this weekend.
With the two states battling the worst flooding in 60 years, investors appear to be expecting a significant increase in claims from Suncorp's customers.
This afternoon Suncorp provided an update to the market on what is was experiencing on its side.
What did Suncorp announce?
According to the release, as of 10am this morning, Suncorp had received around 1,300 claims relating to the heavy rainfall and floods. But it is unlikely to end there, with the company expecting claims numbers to rise over the coming days.
However, it advised that it was too early to accurately estimate the ultimate number of claims it expects to receive, or the final costs in relation to the recent weather.
Positively, Suncorp has stressed that it has a comprehensive reinsurance program in place for FY 2021, with the full limits remaining available on its main catastrophe program and the dropdown aggregate covers.
It advised that the main catastrophe program has a maximum first event retention of $250 million and that its reinsurance program is further strengthened by an Aggregate Excess of Loss (AXL) protection. This provides $400 million of cover in excess of a retention of $650 million with an event deductible of $5 million. In addition, Suncorp's FY 2021 natural hazard allowance is $950 million.
Suncorp's CEO, Steve Johnston, commented: "Our thoughts are with communities contending with this weather and the emergency services personnel and volunteers who are putting themselves in harm's way."
"Our Customer Support Teams will be deployed to the most impacted regions when waters recede, and our affected bank customers can access our emergency relief package. Our customers can be assured that we're committed to their recovery and we will be with them every step of the way," Mr Johnston said.
