Auckland floods: Tower’s insurance claims surge to 4810

Tower chief executive Blair Turnbull. Photo / Brett Phibbs / www.photosport.nz

Tower has received 4810 claims relating to the floods which hit Auckland and the upper North Island from January 27 - a big jump up from the 1900 it reported receiving soon after the event on January 30.

The NZX-listed insurer noted most of the claims were for home insurance at 2660 with around 740 motor claims and the remaining number mostly contents claims with most claims relating to flood damage and some due to landslides.

Tower chief executive Blair Turnbull said the company remained financially strong with robust reinsurance cover and a well-capitalised balance sheet.

“Tower continues to invest in sophisticated underwriting capabilities and risk-based pricing which enhance our rating agility and accuracy and help to deliver sustainable margins.”

Tower chief financial officer Paul Johnston said it was continuing to assess the financial impact of the event but at this stage the company expected it would trigger Tower’s reinsurance cover for catastrophe events.

It has an excess of $11.875 million for catastrophe events which means it will cough up that amount before its reinsurance cover kicks in.

Johnston said the excess was within the $30m Tower had allowed for large events in its 2023 financial year.

However, he said it was likely the company would purchase reinstatement cover to ensure it retained its full level of catastrophe protection with the costs being absorbed within the financial year.

The company did not say how much it would cost to purchase that cover but said its FY23 guidance remained unchanged.

Tower is New Zealand’s third largest general insurer behind IAG and Suncorp.

Yesterday Suncorp which owns Vero and has a joint share in AA Insurance said it had now received in excess of 8000 claims.

Tower’s shares are down 1.8c or 2.58 per cent over the year to 68c.