Suncorp has warned the global credit crunch has combined with stormy weather and markets to depress the company’s full-year net profit by nearly 50%.

The company held a trading update on Friday where CEO John Mulcahy revealed the company expects a full-year net profit of $525-550 million, well down on the $1.07 billion booked by Suncorp last year.

Investors wiped an estimated $1.7 billion off the value of the company within a few hours of Mr Mulcahy’s announcement.

General insurance claims are expected to cost Suncorp $415 million, more than double the normal annual budget of $200 million.

Storms that hit Sydney in December ($170 million) and Mackay in February ($110 million) were particularly expensive.

Mr Mulcahy expects a loss around $235 million, while the insurance trading ratio is forecast to be 10% when full-year results are released on August 26.

The company expects reserve releases of about $70 million in the second half, against $171 million in the first half.

In confirming its reinsurance program, Suncorp has reduced the maximum event retention to $150 million from $200 million, due to an increase in wild weather.

Mr Mulcahy says despite the external challenges that face all financial companies, sound underlying group performance gives Suncorp a strong foundation for the coming financial year.

“Our businesses are in good shape, integration is progressing well and delivering the synergies we targeted, our customer base has grown and satisfaction across all brands continues to improve,” he said.

He forecast an insurance trading ratio of between 10-12% in the coming financial year.