{"id":51813,"date":"2014-05-27T03:05:04","date_gmt":"2014-05-27T07:05:04","guid":{"rendered":"http:\/\/countingpips.com\/?p=51813"},"modified":"2014-05-27T07:15:06","modified_gmt":"2014-05-27T11:15:06","slug":"why-the-suncorp-group-ltd-share-price-suffered-today","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/05\/why-the-suncorp-group-ltd-share-price-suffered-today\/","title":{"rendered":"Why The Suncorp Group Ltd Share Price Suffered Today"},"content":{"rendered":"
May 27, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

What happened to the Suncorp Group Ltd Share Price?<\/h2>\n

\nShares in banking and insurance conglomerate Suncorp Group Ltd [ASX:SUN]<\/b> fell by nearly 2% today, dragging the broader market down with them. The stock is falling off a six-year high after a sustained two-year rally.\n<\/p>\n

Why did this happen to the Suncorp Group Ltd Share Price?<\/h2>\n

\nThis morning Suncorp announced a $500 million non-cash writedown of intangible assets associated with its life insurance business. Suncorp is trying to proactively and realistically recognise the problems that the life insurance industry will face over the next few years.<\/p>\n

There\u2019s a structural problem in this industry where customers are expected to pay more as they get older, and as a result, Australia\u2019s ageing population is buying less life insurance.<\/p>\n

As Australia\u2019s big insurers grapple with this problem, their revenues and earnings are at risk of sliding\u2026hence today\u2019s writedown and the negative reaction by Suncorp investors.\n<\/p>\n

What now for the Suncorp Group?<\/h2>\n

\nSometimes companies have to \u2018take their medicine\u2019 and reset investors\u2019 expectations when they rise unreasonably high. Today\u2019s news is a bitter pill and the share price has duly copped a whack.<\/p>

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But it\u2019s worth noting that the writedown won\u2019t impact Suncorp\u2019s cash earnings or dividend\u2026and industry conditions can turn around sooner than you think.<\/p>\n

In the meantime, Suncorp\u2019s general insurance division is performing strongly. The bottom line is that Suncorp investors shouldn\u2019t necessarily view this news as a reason to sell all their shares.\n<\/p>\n

Tim Dohrmann+<\/a>
\nSmall-Cap Analyst, Australian Small-Cap Investigator<\/em><\/strong><\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

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\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au What happened to the Suncorp Group Ltd Share Price? Shares in banking and insurance conglomerate Suncorp Group Ltd [ASX:SUN] fell by nearly 2% today, dragging the broader market down with them. The stock is falling off a six-year high after a sustained two-year rally. Why did this happen to the Suncorp Group Ltd […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-51813","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/51813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=51813"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/51813\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=51813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=51813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=51813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}