Suncorp Group Limited

CRROs identified (pp. 25–32). Suncorp categorizes CRROs as physical risks, transition risks and climate-related opportunities. Six are identified, each page marked with its time horizons (S, M, L):

Time horizons (p. 25). Short: less than 3 years, aligned with the three-year business planning cycle. Medium: 3 to 20 years, where risk management processes identify and respond to emerging risks and strategic disruption. Long: more than 20 years, capturing impacts beyond the short and medium terms.

Also considered (p. 30). Fossil fuel related stranded asset risk is determined to be low for the listed equities and corporate bonds investment sub-portfolio, because of the fossil fuel exclusions in the Sensitive Sector Standard.

Physical risk to claims (p. 26). Changes in the frequency and severity of weather events may increase natural hazard claims costs and affect insurance risk and reinsurance outcomes, flowing through to pricing and customer affordability. Peril exposure is primarily severe storms, bushfires, tropical cyclones and flooding along the Eastern Seaboard of Australia, predominately affecting property-related insurance products.

Concentration (p. 28). Insurance exposure is heavily concentrated in property classes: home with $4.3 billion of Gross Written Premium (GWP), 28.1% of overall GWP, and motor with $6.6 billion, 42.5% (Compulsory Third Party excluded). In FY26 there were 18 declared natural hazard events and more than 120,000 natural hazard claims, which can create surge demand across the claims network. Uptake of solar panels and electric vehicles adds capacity pressure because repairs need training, specialized equipment and parts.

Other effects (pp. 29–32). Severe weather may affect the pricing and availability of reinsurance and capital (p. 29). Higher home insurance premiums and affordability concerns may lead to further government intervention, affecting the operating environment, cost base, underwriting, pricing models and capital requirements (p. 30). Disaster management capability supports management of claims costs and post-event demand (p. 31). The transition is expected to raise demand for insurance solutions for transition-related assets (p. 32).

Responses by CRRO (pp. 27–32). Reinsurance: a five-year aggregate cover and optimization of structure, attachment points and limits. Underwriting: address-level pricing, aggregate exposure guardrails and enhanced climate forecasting. Claims: Trans-Tasman surge capacity. Disaster management: a staged $25 million jobs and investment package over FY23–FY28 (p. 31). Opportunities: motor insurance for drivers of electric and hybrid vehicles, Digital Insurer, and an annual commitment of 5% of AAI Limited shareholder funds to social impact and lower-carbon impact investments (p. 32).

Climate Transition Plan (pp. 37–38). The Plan, released in the FY25 Climate-related Disclosure Report, is summarized: net-zero Scope 1 and 2 by end FY30 from an FY20 baseline; RE100 commitment of 100% renewable electricity in 2025; and a financed emissions intensity target for listed equities and corporate bonds. Implementation covers major procurement suppliers (50 suppliers; 74% publicly disclose Scope 1 and 2), claims panel builders and motor mobility suppliers, engagement with 100% of external investment managers each year, and fossil fuel exclusions under the Sensitive Sector Standard, met in FY26.

Assumptions and resourcing (pp. 32, 39). The net-zero target assumes competitive renewable electricity products and ongoing supply of hybrid and electric vehicles through FY30. Capital is deployed through business-as-usual activities and existing budgets, not allocated separately to CRROs.

Current effects (pp. 26, 29, 32). FY26 natural hazard claims costs were $2,024 million (FY25: $1,355 million), 19.8% of total claims expenses and $254 million above the $1,770 million natural hazard allowance, within the insurance services expense line item. FY26 reinsurance premium was $40.2 million; its climate-related share cannot be separately identified. Transition growth is reflected in motor portfolios ($6.6 billion, 42.5% of Group GWP); $1,188 million was invested in lower-carbon impact investments.

Anticipated effects (pp. 26–29). The FY27 natural hazard allowance is $1,850 million. Relative to the FY26 net natural hazard allowance for weather-related perils, climate change is expected to raise net natural hazard costs by 3% (low warming) to 7% (high warming) around 2040 and by 3% to 11% around 2050, excluding inflation and unit growth. A five-year aggregate reinsurance cover ($800 million per annum, up to $2.4 billion in total) is expected to cap natural hazard costs at $1.85 billion in FY27 in approximately 90% of scenarios.

Not quantified. Claims capability and capacity: not separately identifiable (p. 28). Home insurance market intervention: high measurement uncertainty (p. 30). Disaster management: no material effect in FY26 or readjustment expected in FY27 (p. 31). Transition opportunities: reliable quantification not supported by available data (p. 32). Combined effects: quantitative information would not be useful at this time (p. 32).

Scenario analyses (pp. 33–35). Three analyses; the investment portfolio was not in scope in FY26.

Transition scenario #2 is described as consistent with the latest international agreement on climate change (p. 35).

Assessment (p. 36). Suncorp's strategy and business model are considered resilient to current and anticipated physical and transition risks over the short, medium and long term. Projected natural hazard cost increases are manageable through risk-based pricing, capital management and reinsurance; over the longer term, resilience is increasingly influenced by external factors such as affordability pressures and government intervention. Adaptive capacity: financial flexibility, operational capability and underwriting discipline. The assessment assumes existing risk management frameworks and controls operate as intended.