Suncorp shares surged almost 8% today as investors appeared to react to a media report saying Tokio Marine may be lining up a bid for the Queensland-based insurer.

The Financial Times article says the Japanese insurer has also looked at IAG, whose shares jumped almost 4% today, and Canada's Intact Financial Corporation.

But Suncorp has emerged as the preferred target, according to the report. The article cites two unnamed sources said to have direct knowledge of the matter. “The same people warned that discussions were ongoing and there was no certainty a deal would result,” it said.

A spokesperson for Suncorp says the company does not comment on market speculation, while IAG also says it has no comment on the FT article.

insuranceNEWS.com.au has reached out to Tokio Marine for comment.

Related article: Leadership shake-up provides ‘maximum effect’, Suncorp chief says

Tokio Marine’s reported interest in one of Australia’s largest insurers comes as a US-led consortium looks to seal its $7.7 billion deal for Steadfast, the nation’s biggest broking group.

Morningstar analyst Nathan Zaia says he “can see the attraction” of the Australian market.

“We have a few large players that do have some benefits from their size … In saying that, there’s a lot of challenger brands that do make their life difficult and do make volume growth difficult,” he said.

Mr Zaia says insurers “are generally making pretty good returns at the moment, so maybe that’s why people are looking at it and thinking the Australian environment is attractive …  their return on equity is high, so that might be attracting interest”.

A Finity report on the industry’s 2024-25 performance found general insurers recorded a return on equity of 19% that year – the best result in a decade.

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