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CBA, Suncorp take $602m hit to bottom line

The banks have reported the costs they’ve incurred from the bushfire crisis ahead of the release of their half-year financial results.

The Commonwealth Bank of Australia (CBA) and Suncorp have each updated shareholders regarding bushfire-related insurance claims that will impair their financial results for the first half of 2020 (1H20).   

CBA revealed that it has recognised a provision of $83 million for the half year ended 31 December 2019, while insurance giant Suncorp will incur natural hazard costs totalling $519 million, which include bushfire and storm cover.

Suncorp revealed earlier this month that it has received more than 2,600 bushfire-related claims since September 2019, with a total estimated cost of between $315-$345 million.

The costs exclude the monetary support offered by both CBA and Suncorp to bushfire victims over the past few weeks.

Suncorp has also declared two storm events since the start of 2H20, including the hailstorms in south-eastern Australia that impacted parts of Victoria, the ACT and NSW from 19 to 20 January, and heavy rain in South East Queensland and NSW from 17 to 18 January.

The financial services group noted that as at 28 January, it had received over 25,000 claims in relation to the hailstorms and in excess of 1,400 claims in relation to the heavy rain, with Suncorp expecting the events to continue to develop over coming weeks as claims are lodged and processed.

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Suncorp Group CEO Steve Johnston observed: “This has been an unprecedented start to the bushfire and storm season in Australia.

“At a time when the industry is responding to multiple large events, Suncorp’s focus is on making the claims process as simple and efficient as possible, with customers making good use of our online claims lodgement facility.

“We continue to mobilise our customer support teams on the ground where they’re needed the most, and we have also increased the capacity of our contact centres to manage the increased volume of calls from our customers across the east coast.

“We’ve also ramped up our repair network to start the assessing and rebuilding process.”

Suncorp is set to publish its 1H20 results on 11 February, with CBA to follow on 12 February.  

[Related: Suncorp bushfire costs exceed $300m]

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