Suncorp tops up potential COVID-19 loss provision by $125m

Suncorp told investors it was confident its policies “do not respond to pandemics” but extended its total provision “in the event of an unfavourable judgment”.


The ICA brought the test case on behalf of Australian insurers after consultation with the Australian Financial Complaints Authority that had received complaints from policyholders who were told their businesses were not covered for losses associated with the pandemic.

The case uses two BI policies from HDI Global Specialty SE (Australia) and The Hollard Insurance Company to examine whether definitions of “pandemic” are valid. The judgment is being considered a “high priority” but a date is not yet known.

ICA spokesman Campbell Fuller said he could not comment on individual moves by Suncorp but the case would determine whether policies that reference the Quarantine Act of 1908, which was repealed and replaced with the Biosecurity Act in 2015, would remain relevant in denying claims.

“The test case is intended to examine the threshold issue around business interruption cover in Australia,” he said. “The industry believes the intention of any exclusions is clear, the industry has not sought to cover pandemics, has not priced pandemics and has not been collecting premiums for it.”

In the United Kingdom, a similar case found partly in favour of businesses affected by the lockdowns with insurers expected to pay compensation. QBE has appealed the judgment that Mr Fuller described as “chalk and cheese”.

Most business interruption policies only cover property damage, but the UK’s financial regulator argued infectious diseases constrained the movement of populations similar to natural disasters meaning shock events that restrict trade should trigger a payout.

Tribeca Investment Partners portfolio manager Jun-Bei Liu said the test case was complex and the UK outcome was “very detailed” but welcomed Suncorp’s additional provision which provided certainty to the market.

“It’s a global phenomenon as the fallout from the pandemic continues,” she said. “If you look at [Suncorp’s] share price, it’s underperformed meaningfully and part of that is due to uncertainty.

Ms Liu said IAG, QBE and Suncorp would be most affected by an adverse judgment. “Although it’s very hard to say if they will win or lose.”

Insurance Australia Group chief executive Peter Harmer said in August there was not enough capital in the insurance industry globally to cover the financial fallout from COVID-19 and it was the government’s responsibility to foot the bill for the pandemic.

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Melbourne couple pays $12.5m for Gold Coast mega mansion

A Melbourne buyer looking to escape the city amid the COVID crisis has splashed $12.5 million on a sprawling resort-style estate, setting a new main river record.

The contract on the luxury 3300 sqm holding at 249-255 Monaco Street went unconditional today in one of the biggest deals on the Gold Coast so far this year.

249-255 Monaco Street, Broadbeach Waters has sold for $12.5 million.

The sale tops the $12.45m paid for 15 Southern Cross Drive, Cronin Island in June for the luxury mansion which was once home to Billabong International CEO Matthew Perrin.

Marketed as a world-class property asset, the neo classic Monaco Street residence, known as Villa Cantarocco, drew worldwide interest during a 90-day campaign.

“We had 212 inquiries through our campaign, with interest from Europe and three significant buyers out of Melbourne,” said Savills Gold Coast Director Christopher Jones, who led the campaign with Aydan Mullin.

“There were two offers on the same day, one from Sydney and the other from Melbourne, which were fairly close.”

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A Melbourne couple plans to relocate to the Broabeach Waters estate.

The Melbourne buyers, introduced by Rebecca Moffrey of The Professionals Mermaid Beach, are relocating to the Gold Coast in what has become a fast-growing trend.

Mr Jones said another Melbourne couple had purchased 165 Monaco Street for $3.1 million and Sydney and Melbourne buyers were circling a four-bedroom house at 155 Monaco Street.

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“There’s definitely a change in appetite, related to COVID-19, among people wanting to get out of those high population areas,” he said.

“The Gold Coast has always been the number one postcode for internal migration in Australia but this has just made it more attractive.”

Villa Cantarocco drew worldwide interest.

The five-bedroom Villa Cantarocco boasts 43 metres of prime river frontage as well as a 17m swimming pool, pontoon, jetty and a six-car garage.

The sale is the latest in a string of prestige property deals on the Gold Coast this year, led by the $25 million sale of Breakfree founder Tony Smith’s Mermaid Beach mansion in May.

The same month Simon and Tah-nee Beard – the couple behind Gold Coast streetwear giant Culture Kings – paid $11.75 million for a Bali-inspired mansion on Isle of Capri.

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