Premium rate increases have not moderated and support the outlook, Macquarie suggests.
A lower interest-rate environment, assuming claims are unchanged, emphasises the need for higher premiums to support insurance underwriting profitability.
Policy cancellations and refund in response to the pandemic do not appear to have been material in the June quarter.
Macquarie retains an Outperform rating and $3.70 target. The company will report its FY20 result on August 25.
Target price is $3.70.Current Price is $3.40. Difference: $0.30 – (brackets indicate current price is over target). If SDF meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).