SUNCORP GROUP LIMITED — Capital/Financing Update 2022

Mar 15, 2022

ASX announcement

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16 March 2022

Update on East Coast Rain and Floods

Suncorp (ASX: SUN | ADR: SNMCY) today provided a further update on the flood recovery in Queensland and New South Wales.

As at 14 March 2022, Suncorp had received more than 34,000 claims with around 60% in Queensland and around 40% in NSW. Over 80% of total claims relate to home damage.

The severe weather was over a period of 15 consecutive days through late February and early March and has resulted in four separate natural hazard events being recognised. Based on early provisional forecasts, Suncorp’s net retained loss from these events has remained unchanged at around $75 million, with recoveries being triggered under a combination of Suncorp’s various reinsurance covers including Aggregate Excess of Loss (AXL) treaty, dropdown covers, main catastrophe program and the quota share arrangement in the Queensland home portfolio. Following these events, Suncorp remains well protected for the remainder of the year.

Given the recent events, but reflecting the strength of the remaining reinsurance cover, the Group’s latest estimate of natural hazard costs for the full year has increased to around $1.1 billion (previously $1,075 million).

Suncorp Group CEO Steve Johnston said the business’s ability to respond to this significant and devastating event has been enhanced by recent strategic initiatives across the Group.

“I have spent time with our teams and customers on the ground in Gympie, Lismore and around south-east Queensland. It’s some of the most widespread devastation I have witnessed, and it is a tragedy for so many Australians. I am very proud of how our people have responded when our customers need us most,” Mr Johnston said.

“Customer Support Teams continue to be deployed in the hardest hit regions, providing face-to-face claims support. Our assessors and builders are working around the clock inspecting the damage, and we thank all our customers for their patience as we work as fast as we can.”

Suncorp’s dedicated flood response and recovery team is using aerial imagery, real-time data and on the ground insights to help understand impacts to customers and direct support where it is needed.

“Our ongoing focus on the digital experience resulted in around 70% of claims lodged online. This allowed us to quickly understand the scale of the event, deploy resources and support our customers faster than ever before. We have also sent more than 1.1 million digital messages to promote online lodgement and provide information on the claims process,” Mr Johnston said.

Mr Johnston said the Group had recently finalised a new national panel of builders to enhance repair quality, capacity, and costs, and this is being fully utilised to respond to this event.

“Our national panel of builders has given us increased capacity to respond to significant extreme weather events in addition to our everyday working claims. Given the scale of this event, we have worked to secure additional builder capacity and have enacted project management capability for specific regions,” he said.

“This will be a major rebuilding effort, across multiple regions, that will take many months. We are currently prioritising our most impacted customers, but we know every claim is important.

Suncorp Group Limited | ABN 66 145 290 124 | Level 23, 80 Ann Street, Brisbane Qld 4000 1 suncorpgroup.com.au

“The floods came after a six-month period where we had already received more than 50,000 natural hazard claims, so we are currently recruiting more people to help us move as quickly as we can to support our customers.”

In addition to the Group’s claims response, a $1 million support package has been announced to help the longterm recovery efforts of flood-impacted communities in Queensland and New South Wales.

Teleconference Details

CEO Steve Johnston and members of the Executive Leadership Team will host a teleconference this morning, Wednesday 16 March at 10.00am AEDT.

Please register via the following link to access the teleconference dial-in details: https://s1.c-conf.com/diamondpass/10020631-4hl2m1.html

Authorised for lodgement with the ASX by the Suncorp Disclosure Committee.

ENDS

For more information contact:

Media James Spence +61 436 457 886 james.spence@suncorp.com.au Analysts / Investors Howard Marks +61 402 438 019 howard.marks@suncorp.com.au

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Suncorp Group Limited | ABN 66 145 290 124 | Level 23, 80 Ann Street, Brisbane Qld 4000 2 suncorpgroup.com.au

March 2022

March 2022

Rallying around our purpose

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Our Purpose
Building futures and protecting what matters
+
People
Capable, engaged, diverse, innovative
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Customers & Community
Delivering valued outcomes
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Financial Outcomes
A sustainable business
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March 2022

Recent flooding and storm events in numbers

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Top Event Loss Causes
Rain
16,728 (49%)
Flood
13,052 (38%)
Lightning
422 (1%)
Hail
359 (1%)
Wind
304 (1%)
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Actual Claims Projected Claims Total YTD Actual (Recent Events) (Recent Events) Event Claims 34,083 44,750 96,930 Home: 26,543 Home: 35,200 Home: 68,092 Motor: 5,996 Motor: 7,500 Motor: 23,445 Commercial: 1,544 Commercial: 2,050 Commercial: 5,393 Actual Event Claims by State QLD | 20,315 NSW | 13,360 ACT | 59 VIC | 349

• Data as at end 14 March

Most Impacted Postcodes*	Most Impacted Postcodes*	Most Impacted Postcodes*
NSW
2480	South Lismore	984
2487	Chinderah	603
2484	Murwillumbah	522
2483	South Golden Beach	438
2478	West Ballina	426
Queensland
4017	Deagon	772
4034	Aspley	477
4053	Everton Park	422
4075	Oxley	393
4510	Caboolture	357

* Defined as postcodes with the highest volume of claims

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March 2022

Robust reinsurance in place

Overview

• Strong reinsurance protection in place – additional AXL purchased in 1H22

• Recent weather between 23 Feb and 9 Mar comprised 4 events for reinsurance purposes

• Post these events, strong reinsurance cover remaining across all programs:

• Horizontal: c$450m of cover across our AXL and dropdowns plus additional 50% placement of $150m AXL layer

• Main Cat: 3 full layers $250m x $250m and 2 full layers from $500m to $6.5bn

• Qld Quota Share: 30% on Qld home

Recent Events and Claims Data

		Actual	Projected
Event	Date	Claims	Claims
East Coast Flooding	23 Feb – 1 Mar	24,762	31,100
NSW East Coast Low	2 – 4 Mar	2,355	3,100
QLD Storms	2 – 4 Mar	1,182	1,600
March Storms & Flooding	5 – 9 Mar	5,784	8,950

Data as at end 14 March

• The ultimate costs for these events continue to develop and the above estimates may be adjusted accordingly

• Main cat $500m x $500m reinstatement – premium not expected to be material, linked to the utilisation of this layer

• FY22 Natural Hazard cost now expected to be around $1.1bn

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March 2022

Using capability delivered through Best in Class Claims to support our customers

Digital lodgement and tracking

• Strong online claims lodgement results

Market leadership in Natural Hazards

• Geospatial technology and satellite imagery informing our response

• Customer Support Team deployed across Queensland & NSW

• Home assessors on the ground

• Dedicated triage site for flood damaged motor vehicles in Brisbane

Supply chain optimisation

• Home Repair Panel capacity secured and retained

• Additional Home builder and project management capacity secured

• Allocation of work and cost control managed using In4mo and ICBM systems

• First salvage auction for damaged vehicles to be held later this

• week

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March 2022

Other strategic priorities are helping to mitigate impacts

Reinvigorated brands with a strong presence

Optimised Pricing & Risk Selection

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Preparation During Event Recovery
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Portfolio management

• Significant re-pricing of Home portfolio commenced in mid 2020.

• Home AWP growth for H1 was 7.5% normalised for portfolio exits

• Portfolio exits for Vero consumer lines (broker and corporate partner)

During Event

• We have upweighted communications with our customers with weather support and claim messaging

• Over 1m SMS and 2m emails sent

• Paid media (TV, radio, digital, social and outdoor)

Pricing Tools and Models

• CaPE was deployed for mass Home in Oct/Nov 21

• Natural hazard models were updated when CaPE deployed

• Our risks in force is lower in high flood areas relative to market share

• $1m community support package

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Lismore Riverine Flood Rating and Flood Extent

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March 2022

Resilience & Mitigation – Four Point Plan

Suncorp has developed a four point plan for a more resilient Australia and will continue to advocate for action

1

2

Improve public infrastructure Provide subsidies to improve the resilience of private dwellings

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3

4

Address inadequate planning laws and approval processes

Remove inefficient taxes and charges from insurance premiums

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March 2022

Important disclaimer

This presentation contains general information which is current as at 15 March 2022. It is information given in summary form and does not purport to be complete.

It is not a recommendation or advice in relation to the Group or any product or service offered by Suncorp or any of its subsidiaries. It is not intended to be relied upon as advice to investors or potential investors, and does not take into account the investment objectives, financial situation or needs of any particular investor. These factors should be considered, with or without professional advice, when deciding if an investment is appropriate.

This presentation should be read in conjunction with all other information concerning Suncorp filed with the Australian Securities Exchange (ASX).

The information in this presentation is for general information only. To the extent that the information is or is deemed to constitute forward-looking statements, the information reflects Suncorp’s intent, belief or current expectations with respect to our business and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices at the date of this presentation. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties, many of which are beyond Suncorp’s control, which may cause actual results to differ materially from those expressed or implied. There can be no assurance that actual outcomes will not differ materially from these forward- looking statements.

There are a number of other important factors which could cause actual results to differ materially from those set out in this presentation.

Suncorp undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this presentation (subject to ASX disclosure requirements).

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March 2022

Appendix: Reinsurance Cover

Main Catastrophe and Dropdown Cover

Aggregate Excess of Loss

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6,500m
150
50% Placed
Main Cat
Main Cat Reinstatement
Retention
Dropdowns
400
1,000m
500m
Deductible
250m 50m x 200m x 50m
Original
200m 100m x 150m x 200m
100m x 150m x 300m Additional
650
150m
100m x 50m x 200m
100m x 50m x 300m
50m
Event 1 2 3 4
Queensland Home 30% Quota Share
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March 2022

Appendix: Natural Hazards Events

Date Event $M Date Event $M	Date Event $M Date Event $M
Jul-21 WA Cold Front 12 Jul-21 Southern Australia Low 7 Jul-21 NZ Heavy Rain 32 Aug-21 Eastern States Winter Winds 8 Aug-21 North Island Storm 14 Sep-21 NZ Spring Storm 10 Sep-21 Mansfield Earthquake 56 Sep-21 Eastern Australia Storms 18 Oct-21 Eastern Australia Complex Low 44 Oct-21 QLD Storms 17 Oct-21 Coffs Harbour Hail 78 Oct-21 Thirlmere Hail 27 Oct-21 Adelaide Hail 170 Nov-21 VIC Rain 10 Nov-21 November Rain 10	Nov-21 NSW QLD Rain & Floods 6 Nov-21 Eastern States Rain & Floods 24 Dec-21 December Rain & Storms 16 Dec-21 North Island Storms 5 Dec-21 South Eastern Wind & Storms 14 Jan-22 January Hail & Storms 57 Jan-22 Ex TC Seth 8 Jan-22 Eastern States Rain & Storms 21 Jan-22 VIC Rain & Storms 40 Feb-22 Buller Heavy Rain 9 Feb-22 Western Sydney Hail & Storms 15 Feb-22 East Coast Flooding 60 Mar-22 NSW East Coast Low 5 Mar-22 QLD Storms 5 Mar-22 March Storms & Flooding 5
803 155 Total events over $5 million (as at end Mar 14) Other natural hazards (as at Feb 28)
958 Total

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March 2022