The Suncorp Group Ltd (ASX: SUN) share price is pushing higher in morning trade.
At the time of writing, the insurance giant's shares are up 1% to $11.34.
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Why is the Suncorp share price pushing higher?
Investors have been buying the company's shares this morning following the release of an update on recent severe weather affecting regions across metropolitan and regional Victoria.
According to the release, as at 6:30pm on Monday, Suncorp had received approximately 3,750 claims predominantly for property damage.
But it doesn't expect the claims to stop there. Management notes that as the full extent of damage caused by the heavy rain, severe winds and flash flooding is still unfolding, claims are expected to rise further in the coming days and weeks.
Suncorp's CEO Steve Johnston said: "Victorians have already been through a lot, and we are moving as quickly and as safely as we can to help our customers and communities affected by this severe weather. Our customer support teams are on the ground in Traralgon providing face-to-face support to all our affected customers including AAMI, Apia and GIO, and we have scaled up our flexible claims team to manage the increase in claims and calls from customers."
Natural hazard costs
Suncorp's total natural hazard costs across Australia and New Zealand year to date to 31 May 2021 were $955 million. This was approximately $40 million above the year to date allowance of $915 million. These estimates exclude any associated risk margin or claims handling expenses.
Positively, though, the company has a comprehensive reinsurance program in place and given its remaining covers, the maximum potential loss from this event will be $50 million.
What now?
Mr Johnston believes more needs to be done to prevent events like this from happening.
He concluded; "What we're seeing in Victoria should again act as a reminder to the devastation which can be caused by severe weather events. More needs to be done to better protect homes in flood-prone regions across the country, including improved town planning and government investment in mitigation infrastructure."
The Suncorp share price is up 15% since the start of the year.
