Suncorp’s margins are being squeezed by insurance claims from a record run of natural disasters combined with a lower Australian dollar.
A short time ago, the company’s shares were down more than 9% to $11.83.
The company says its margins will be hit for the half year the end of this month.
“While the industry remains very competitive, costs have been increasing as a result of the lower Australian dollar and the impact of the $4 billion of weather events during 2015,” says CEO Michael Cameron.
These increased costs will have a “significant” impact on margins.
The underlying insurance trading ratio is expected to be around 10% for the half year, down from 12.8%.
Cameron says he spent the first 10 weeks as CEO working to gain a deeper understanding of all facets of the business, and meeting with employees, regulators, investors and others.
“The group is in good shape other than the short-term operational challenges in general insurance that we are highlighting today,” Cameron says.
Suncorp’s results for the six months to December will be released in February.
In 2015, Suncorp insurance posted a 39.5% rise in profit to $125 million. Suncorp bank increased profits by 55.3% to $354 million.
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