Tower Increases earthquake claims provisions

Company News

by David Chau

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.

David Chau

Finance News Network
David joined FNN in April 2016. In addition to presenting the Market Outlook and latest business news stories, David interviews senior economists and CEOs of ASX-listed companies. Prior to working for FNN, David was a litigation lawyer.