Tower Insurance has called for urgent clarity on climate adaptation funding in New Zealand, warning that the country's position as having the second-highest natural risk profile globally demands immediate attention.
Speaking at Tower's annual general meeting on Tuesday, chairman Michael Stiassny emphasized the need for "long-term certainty" on climate change adaptation policy to maintain affordable insurance coverage and stable reinsurance conditions.
The insurer reported strong financial results for the September 2024 year, with underlying net profit after tax reaching $83.5 million and gross written premium increasing 15% to $595 million. Shareholders approved a $45 million capital return via mandatory share buyback, with a final dividend of 6.5 cents per share.
Drawing parallels with January's devastating California wildfires, Stiassny warned New Zealand must avoid a similar insurance gap. "These fires have laid bare a massive insurance gap that has been decades in the making," he said, urging the government to develop a cross-party supported climate adaptation framework.
Despite a government committee addressing natural hazard risks, Stiassny described funding responsibility as "the elephant in the room," noting the lack of consensus between private asset owners, councils, insurers, and central government.
Outgoing Tower CEO Blair Turnbull, in his final week before joining Milford Asset Management, reported continued growth with customer numbers increasing by 5,000 to 310,000. Tower has revised its 2025 financial year profit guidance upward to $60-70 million, assuming full utilization of its $50 million large events allowance.
The insurer now projects gross written premium growth between 7% and 12% for 2025, down from previous estimates of 10-15%, citing a shift toward lower-risk policies.
Chief financial officer Paul Johnston, who becomes interim CEO from Feb. 13, confirmed $3 million of the events allowance was used following October 2024's Dunedin floods.
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