By Nichiket Sunil and Kumar Tanishk
General insurer Suncorp ASX:SUN cut its gross written premium growth forecast for 2026 on Friday, citing weakness in the commercial market in New Zealand and soft demand in Australia, sending its shares down nearly 5%.
The company now expects gross written premium (GWP) growth of about 2.7% for 2026, down from the earlier forecast of 3%.
"Elevated claims inflation, particularly in personal lines, combined with softer demand in some segments, is making it harder to achieve the previously targeted growth rates," said Tim Waterer, chief market analyst at KCM Trade.
The company also projected total investment income between A$750 million and A$800 million ($518.78 million and $553.36 million), sharply down from A$1.23 billion a year earlier.
New Zealand's economic recovery has been hampered by sluggish net migration, a cooling housing market, and tight fiscal policy, while Australian home prices in June marked their steepest fall in over three years as rising borrowing costs dented demand.
"There is meaningful further downside risk to GWP growth if economic conditions weaken and insurance demand softens," Waterer said, highlighting potential headwinds from higher living costs, reduced consumer spending, or a slowdown in housing activity.
Suncorp also flagged higher reinsurance costs for 2027, driven by the inclusion of the A$2.4 billion five-year reinsurance cover announced in April.
Suncorp said the reinsurance cover would free up additional capital on top of the A$100 million one-off capital release announced in April, by reducing the surplus capital it holds above target levels.
Separately, CEO Steve Johnston will return to his position effective July 6 after medical leave taken since the end of March, Suncorp added.
Shares of the Brisbane‑based firm slid as much as 5.1% to A$18.36, marking their sharpest intraday drop since mid‑February, while ranking among the top laggards on the ASX200 ASX:XJO, which edged up 0.4%.
($1 = 1.4457 Australian dollars)