Cyclone Harold, which passed through several Pacific Island nations, is expected to cost Tower Insurance between $8 million and $10 million before tax.
In a stock exchange filing by the insurer, it said that its estimates include an allowance for further development of claims. The company also has a reinsurance programme in place that limits the total exposure to Cyclone Harold to $10 million.
According to Tower, its aggregate reinsurance cover has been activated by the cyclone. This reinsurance programme provides immediate cover for any further large weather events in New Zealand and the Pacific to a total of $20 million for the remainder of FY20.
Combined with the Timaru hailstorm earlier in the year, Tower Insurance’s total large event expenses are now at approximately $10.5 million to $12.5 million before tax. This is between $2.5 million and $4.5 million more than the insurer’s $8 million large event estimate.
Tower noted that strict travel restrictions due to COVID-19, along with wide ranging communication outages and the destruction of critical infrastructure, have resulted in the inability to access impacted locations, particularly in Vanuatu, until late last week. Once entry to impacted areas was possible, assessments were undertaken, and preliminary estimates calculated.
Cyclone Harold was a category 5 cyclone that caused significant damage in Vanuatu, Fiji, and Tonga, in early April. It caused around 30 fatalities and devastated numerous homes, properties, and critical infrastructure.
