INDEPENDENT NEWS

Tower says summer storms will cost about $5 million

Published: Tue 13 Feb 2018 12:58 PM
Tower says summer storms will cost about $5 million
By Sophie Boot
Feb. 13 (BusinessDesk) - Auckland-based insurer Tower said recent storms will have a financial impact of about $5 million after tax.
The company said it received about 300 claims as a result of the New Year storms, and estimates that will cost it between $1.4 million and $1.8 million after tax. It has received 150 claims as a result of ex-cyclone Fehi, which hit the South Island earlier this month, and says the financial impact of those will be between $2.2 million and $3.2 million after tax.
Tower said it is too soon to know the extent of the damage done by Cyclone Gita, which hit Tonga last night having already passed through Samoa and American Samoa and may yet impact Fiji.
However, the insurer said it has a non-catastrophe reinsurance program meaning it absorbs the first $7 million of before-tax losses and reinsurance then covers the next $10 million, up to $5 million per event.
"Weather events in New Zealand may have already reached $7 million," Tower said. "Should damage from Tropical Cyclone Gita exceed $5 million, Tower may be exposed to a further $3.5 million after tax, prior to catastrophe cover commencing. Tower retains full catastrophe cover of $798 million, plus appropriate back-up cover."
The shares last traded at 65 cents, down 28 percent from a year earlier. The stock pulled back sharply last year after the Commerce Commission declined a proposed merger with major insurer Vero New Zealand in July. A High Court appeal of that decision was scheduled to begin early this year but this was abandoned.
(BusinessDesk)
ends
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team led by former Bloomberg Asian top editor Jonathan Underhill and Qantas Award-winning journalist and commentator Pattrick Smellie provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Govt declines application to mine conservation land
By: New Zealand Government
Deer Milk wins Innovation Award at Fieldays
By: Pamu Farms
Regulator concerned at Fonterra's milk price calculations
By: BusinessDesk
Waves trigger Antarctic ice shelf collapse
By: Australian Antarctic Program
Latest Housing Affordability Measure (HAM) released
By: Ministry of Business Innovation and Employment
Avocado prices smash records
By: Statistics New Zealand
Conservation land saved from coal mine
By: Forest And Bird
Coal Mining Rejection is a Win for People-Power
By: 350 Aotearoa
Te Kuha protection a victory for the people, climate change
By: Coal Action Network
‘Green’ mining encouraged, but barriers remain
By: NZ Energy and Environment Business Week
Chefs rave about Pāmu deer milk
By: Pamu Farms
Commission concerned Fonterra's risk estimate is too low
By: Commerce Commission
Shane Jones lambasts Fonterra at Fieldays
By: RNZ
PM needs to rein in motor mouth Jones
By: New Zealand National Party
Helping dairy farmers avoid FEI penalties
By: GrainCorp Feeds
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media