Tower lost ground today as insurance claims come in. Photo / Alex Burton
Insurer Tower slipped three and a half per cent as it assessed the impact of the flooding in Auckland and other parts of the upper North Island on a flat day for the New Zealand sharemarket.
The S&P/NZX 50 Index drifted in the afternoon and closed at 12,034.17, down 1.87 points or 0.02 per cent after reaching an intraday high of 12,065.34.
There were 69 gainers and 65 decliners over the whole market on light trading of 16.27 million shares worth $68.98m with many investors in the upper North Island taking some welcome rest on the Auckland Anniversary public holiday.
Tower tumbled as much as 8 per cent to 65c during the day but recovered to finish 2.5c or 3.52 per cent down at 68.5c.
The insurer told the market it has so far received 1900 claims – 1000 of them involving house insurance and the remainder motor and contents claims.
Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said the amount of claims and extent of the damage may just be the tip of the iceberg.
“The initial best assessment for the Christchurch earthquakes was $12 billion and the claims came to $40b. But it looks like Tower has plenty of headroom and robust reinsurance in place to handle the claims,” he said.
Sullivan said investor interest will be centred on the United States this week with 100 of the S&P 500 stocks reporting their latest financial results and the Federal Reserve revealing its latest move on fighting inflation – with an expected 50 basis points rise in its official cash rate. “There is plenty of data to be crunched by investors.”
At home, Tower said it is well prepared to respond to large-scale events and is in a strong position to support the recovery.
“Tower is firmly focussed on supporting affected customers and communities, proactively communicating via text messages and email, and has bolstered resourcing in our contact centres and assessors on the ground,” the company said.
Tower said the reinsurance arrangements, with multiple treaties in place, covered house, contents and motor losses. This was in addition to providing $934m of catastrophe cover, which has an excess of $11.85m and is within the $30m Tower has allowed for large events in the 2023 financial year. Its full-year guidance remains unchanged.
Auckland lines company Vector declined 9c or 2.06 per cent to $4.28 with the market expecting the company to complete some remedial work as a result of the flooding.
Auckland International Airport, which was always hit by the flooding, was down 5.5c to $8.45.
Arvida Group, down 2c to $1.17, said part of its Parklane retirement village in Auckland suffered serious flooding and affected residents were evacuated on Friday night and successfully relocated to temporary accommodation.
Arvida has comprehensive insurance cover in place for the affected villas, apartments and clubhouse.
Ryman Healthcare continued on its merry way, increasing 15c or 2.24 per cent to $6.85, and has risen 30 per cent in the past fortnight, missing out on only one day of gains. Fellow retirement stock Summerset Group was down 13c to $9.80.
Market leader Fisher and Paykel Healthcare was up 9c to $25.20; Serko gained 5c or 1.96 per cent to $2.60; Comvita increased 6c to $3.48; Manawa Energy collected 10c or 1.89 per cent to $5.40; and Sanford added 6c to $4.28.
In the energy sector, Meridian gained 6c to $5.35; Manawa was up 9c to $5.39; and Contact increased 3c to $7.88.
In the property sector, Precinct was up 2.5c or 1.98 per cent to $1.29, and Vital Healthcare Property Trust was down 4.5c or 1.88 per cent to $2.355.
Accordant Group increased 7c or 4.29 to $1.70; Eroad rose 6c or 6.45 per cent to 99c; Winton Land collected 6c or 3.45 per cent to $1.80; Napier Port added 7c or 2.35 per cent to $3.05; AFT Pharmaceuticals gained 11c or 2.69 per cent to $3.83; and Savor was up 1.5c or 3.23 per cent to 48c.
Ebos Group declined 83c or 1.84 per cent to $44.39; Freightways was down 27c or 2.73 per cent to $9.61; Seeka shed 10c or 2.86 per cent to $3.40; and Smartpay Holdings declined 4c or 2.9 per cent to $1.34.
Colonial Motor Company decreased 13c to $9.37; Radius Residential Care declined 2c or 6.06 per cent to 31c; and Solution Dynamics decreased 4c or 1.83 per cent to 2.14.