New Zealand insurance company, Tower Ltd (ASX:TWR)
, is expecting to increase its claims provisions for the Canterbury earthquake, which occurred in 2010.
Six years after the earthquake, Tower is seeing a higher number of disputes and litigation – as claimants are worried that may fall outside the 6-year limitation period to bring a claim. Tower says there are around 560 claims remaining from the almost 16,000 claims which were lodged.
The company says this will result in a $16.2 million impact on its profit after tax.
Tower maintains that it has a strong balance sheet with a 213% solvency ratio after the claims provision increase, and that it has $11.7 million in excess solvency (above the minimum regulatory requirements).
Tower reported a net loss of $7.8 million at 31 March 2016.