Flooding in the suburb of Wesley Photo: RNZ / Cole Eastham-Farrelly
Insurer Tower expects the ultimate cost of the severe Auckland and Upper North Island weather events to be between $95m and $125m in claims to the company, but says the majority of this will be covered by reinsurance.
Chief executive Blair Turnbull said the costs of the event would predominantly be covered by Tower's reinsurance for catastrophe events, which had an excess of $11.875m.
He said Tower had received around 5325 claims for the Auckland and Upper North Island event alone, but was still assessing the potential costs of Cyclone Gabrielle in claims.
"Tower has received approximately 2200 claims for damage caused by Cyclone Gabrielle and is in the early stages of estimating its financial impact as further claims continue to be received," he said.
"Tower expects Cyclone Gabrielle is likely to also trigger Tower's reinsurance for catastrophe events, with an excess of $11.875m."
Turnbull said the insurer was progressing reinstatement cover to ensure it maintained sufficient protection for two additional catastrophe events.
Tower reaffirmed its trimmed full year earning guidance, with profit expected to be between $18m and $23m.
"This includes a large events allowance of $40m and the expected cost of reinstating reinsurance arrangements," Turnbull said.
The company had forecast its profits would be between $27m and $32m but revised this down in mid-February after severe weather in the North Island.
"Tower's forecast dividends are 5 cents per share for the full year," Turnbull said.
Photo: RNZ / Dan Cook
The insurer said its premium revenue for the three months ended December was $123m, which represented a growth of 12.5 percent on the same period last year.
Average motor claims frequency increased 1 percent compared to pre-Covid figures, due to higher traffic volumes and an increase in motor thefts, Turnbull said.
"These factors have contributed to a claims ratio excluding large events of 54 percent for the quarter compared to 47 percent in the same period last year.
"Building on its approach to risk-based pricing for earthquake and inland flooding risks, Tower plans to expand its natural hazards model to include landslips and coastal hazards in FY23," Turnbull said.
