Storms lash Tower earnings

It never rains but it pours for NZX-listed insurer Tower.

With the impact of the Canterbury earthquakes still eating into its results, Tower has had to contend with severe storms damaging its customers' property in New Zealand and the Pacific Islands.

The effect on Tower will be about $5 million after tax, the company says.

“New Zealand has experienced some unusually inclement weather this summer and we are committed to helping our customers get back on their feet as soon as possible,” chief executive Richard Harding says.

Tower shares fell 2.3% to 63.5c on the news, valuing the company at $214 million.

New year storms led to about 300 claims, it said, with a financial impact of $1.4-1.8 million after tax.

A further 150 claims had been received so far as a result of Cyclone Fehi, which hit in early February. Those claims would have an impact of $2.2-3.2 million after tax.

Tower said it was too early to estimate the financial effects of Cyclone Gita on its insurance cover in the Pacific Islands.

However, if the damage exceeded $5 million, Tower could be exposed to costs of $3.5 million after tax, it said. Its own catastrophe insurance would pick up costs in excess of that.

Tower is due to hold its annual meeting in Auckland on March 1. Shareholders will be asked to vote on the re-election of director Steve Smith and the election of new director Wendy Thorpe.

Ms Thorpe is based in Melbourne and has held senior executive roles at AMP and AXA Asia Pacific.

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