Suncorp keeps reinsurance renewal in the dark

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9 July 2012

Details of Suncorp’s July 1 reinsurance renewal remain a mystery, with the insurer so far declining to comment on negotiations.

Last year Suncorp released an announcement to the Australian Securities Exchange on July 1 detailing its reinsurance renewal amid intense market and media speculation following the Australian floods and New Zealand earthquakes.

But a spokesman told insuranceNEWS.com.au on Friday the group has not yet decided if it will make a similar announcement this year prior to its full-year results announcement on August 22.

This is despite UK speculation over the renewal, with the UK media reporting that Berkshire Hathaway has written $US800 million ($779 million) of Suncorp’s main catastrophe treaty in addition to a $US200 million ($195 million) buydown on its New Zealand reinsurance cover.

This would take Berkshire Hathaway’s single-event excess of loss exposure to Suncorp as high as $US1 billion ($974 million).

The reports suggest the giant US investment conglomerate – which includes in its insurance holdings reinsurers Gen Re, Cologne Re and NRG – accounts for around 15% of Suncorp’s main catastrophe treaty, giving a total treaty size of around $US5.5 billion ($5.4 billion).

Berkshire Hathaway is understood to have been aggressively expanding its reinsurance business in the Asia-Pacific region ahead of the expiry of its quote share arrangement with Swiss Re at the end of the year.

In mid-June a Suncorp spokesman told insuranceNEWS.com.au the group would not comment on reinsurance negotiations until they are complete, saying on Friday the company is still not in a position to comment.