Kiwi insurer Tower has renewed its reinsurance program for fiscal year 2025 (FY25), securing coverage for its home, motor, boat, and commercial portfolios in New Zealand and the Pacific. The company said that it obtained comprehensive reinsurance at competitive rates.
In a news release, Tower’s chief financial officer Paul Johnston (pictured above), explained that the reinsurance arrangements are designed to protect the company from the financial impact of large-scale events while maintaining flexibility to support growth and ensuring strong solvency.
“Tower’s focus on risk-based pricing combined with our dynamic rating ability helped us secure favorable terms for our FY25 reinsurance. We’ve further strengthened relationships with global reinsurers, with several agreeing to new multi-year arrangements, which provides greater long-term certainty of reinsurance costs and catastrophe excesses,” Johnston said.
Johnston added that these agreements are expected to provide long-term certainty around reinsurance costs and catastrophe excesses.
To support its growth strategy and align with its risk appetite, Tower has made adjustments to its reinsurance coverage for FY25. The company increased its catastrophe upper limit to $800 million, up from $750 million in the prior year.
Additionally, Tower expanded its coverage for a third catastrophe event to $85 million, an increase from $75 million in FY24.
For FY25, Tower's catastrophe reinsurance excess is set at $18.75 million for the first two events, compared to $16.9 million in FY24, due to the expiration of previous multi-year arrangements. The excess for a third event remains unchanged at $20 million.
Tower estimates that reinsurance costs will represent 11.7% of its total income in FY25, down from 13.9% in FY24.
Johnston also noted that securing a comprehensive reinsurance program with stable excesses and pricing positions Tower to maintain competitive pricing for its customers.
Tower was recognized as one of the winners for the Best Insurance Companies for Claims in Australia. Read the full winners here.
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