Suncorp expects a “modest drag” on gross written premium this financial year due to the take-up of hardship options and lower economic activity amid the COVID-19 outbreak, while landlord claims are set to rise.

“We have already received thousands of requests for financial hardship from both our bank and insurance customers and have provided discounts and premium waivers to 12,300 insurance customers in Australia and New Zealand and have approved $4.05 billion in loan deferrals,” CEO Steve Johnston said in a market update today.

Suncorp has about 500,000 in-force landlord policies that provide loss of rental income cover, with the majority being Terri Scheer Landlord Preferred policies which typically offer rent default cover for up to 20 weeks. Other policies provide a lower level of cover.

“We expect there will be an increase in claims frequency and severity for loss of rent claims,” Mr Johnston said. “However, the precise impact is hard to predict given the legislative responses at Federal and State levels.”

Consumer motor claims volumes have fallen, mostly due to reductions in low-cost and less complex cases where the vehicle is still drivable, while the trend is also evident to a lesser extent in commercial motor.

“We are cautious about drawing too many conclusions from these numbers, at least in the short-term in part due to the rapid increase in motor vehicle usage we have been seen following the easing of restrictions here in Australia, in New Zealand and in other offshore jurisdictions,” Mr Johnston said.

Suncorp reported that the insurance investment portfolio recorded a pre-tax loss of $205 million in the March quarter as investment market volatility affected valuations, with some of that unwound during April.

“We have not looked to change our asset allocation, which in our view remains relatively conservative with over 94% of the overall portfolio investment in cash and fixed income securities, around 80% of which are rated A or higher,” CFO Jeremy Robson said.

Group costs are expected to be “slightly above” $2.7 billion this financial year, including remediations after a review found potential pay and leave entitlement errors, including for overtime, shift penalties and public holiday loadings.

Costs for remediation and putting in place new processes to prevent the issue happening again are estimated at $40-70 million.

Suncorp also said today that Banking and Wealth CEO Lee Hatton will leave the company at the end of the month, three months after taking up the role.

“I have re-assessed the demands of commuting from my home base in Sydney to Brisbane and the impacts this will have on my family, and have reached the conclusion that this will not be sustainable,” she said.

EGM Deposits & Payments Bruce Rush will fill the role on an interim basis while a recruitment process is underway.

Suncorp’s AGM has been pushed back to October 22 from September 24.