Tower has forecasted a first-half loss of $3 million following a surge in claims due to the extreme weather events that hit New Zealand earlier this year.
For the six months to March, Tower said that it would see a downturn compared to last year’s $3 million profit as it tallied the impact of three major weather events that will cost the insurer anywhere between $260 million and $310 million.
In a report from RNZ, Tower chief executive Blair Turnbull said that New Zealand experienced its “worst cyclone this century” over a three-month period, in addition to record flooding in Auckland. Vanuatu also experienced two significant cyclones, which further contributed to Tower’s losses.
"Tower estimates that the average claims cost for this event will be around double that of other recent large weather events. This is due to deeper flood waters in high-density areas causing substantially more damage, contamination, and landslides," Turnbull said.
Turnbull also said that there would be no interim dividend to make up for the first half loss, and as a result the insurer has cut its profit forecast to between $8 million and $13 million from its previous $18 million to $23 million quote. The insurance group has received more than 9,100 claims for the floods and cyclones, with more than half accounting for the North Island floods and costing between $195 million to $225 million.
Meanwhile, Cyclone Gabrielle had 3,350 claims lodged, with an estimated cost between $55 million and $75 million. The cyclones in Vanuatu had 250 claims, with an estimated cost of $10 million.
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