I think a stroke of genius from Suncorp is in play here.
The negativity that is about to sweep the insurance market has already started and is going to grow to epic proportions over the coming months.
On one hand you have companies like RACQ who are saying they will go out of business if they have to payout all the claims made. Then you have "silly" Suncorp for adding flood policy free of charge to insurance policies.
Suncorp have already gone public and have stated that they will payout all (legitimate) flood claims.
Regardless of Suncorp's decision to add flood cover free of charge to policies, they still would have hit their reinsurance level. No additional cost to them in either situation.
So what will occur now? Suncorp will scrap the free flood part on all new policies and like all insurance companies, will charge a huge premium for floods. A premium that people won't hesitate to pay now.
And when people have to make a choice in insurance companies who will they choose? Companies that have "screwed over" Joe public or will they go with Suncorp who paid claims, as promised.
Suncorp is about to be inundated (pardon the pun) with a massive market share and still have a competitive price.
Bravo Suncorp!
SUN Price at posting:
$8.20 Sentiment: LT Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)