Morgan Stanley expects domestics insurers will be exposed to more CAT risk volatility in their own earnings, and will have to pay more for reinsurance cover. In particular, Suncorp Group is thought to face a difficult reinsurance renewal in July.

The broker believes the current period represents just a normalisation for CAT costs after a subdued 2013 to 2018.

The Equal-weight rating and $12.50 target are unchanged. Industry view: In-Line.

Sector: Insurance.

Target price is $12.50.Current Price is $12.15. Difference: $0.35 - (brackets indicate current price is over target). If SUN meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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