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Tower has strategically expanded its catastrophe reinsurance coverage, boosting capacity for the forthcoming financial year to enhance growth prospects and mitigate the impacts of large-scale events.
Chief Financial Officer Paul Johnston highlighted the company’s success in reinforcing ties with global reinsurance partners, including securing several multi-year agreements. "These agreements bring us a significant degree of long-term stability in terms of reinsurance costs and catastrophe excesses," Johnston remarked today.
Commending the achievement, Johnston added, "We are delighted to have established a robust reinsurance framework characterized by consistent excesses and stable pricing."
The company has elevated the upper threshold for catastrophe cover to NZ$800 million (US$733 million) from the previous NZ$750 million (US$687 million). Additionally, Tower augmented its coverage for a third event to NZ$85 million (US$78 million) from NZ$75 million (US$69 million).
Excesses for the initial two events have risen to NZ$18.75 million (US$17.2 million) from NZ$16.9 million (US$15.5 million), while the excess for a third event remains steady at NZ$20 million (US$18 million).
Tower projects that its reinsurance costs will constitute 11.7% of its total income, a reduction from last year's 13.9%, exemplifying efficient cost management.
Following an earnings guidance upgrade announced last month, the company looks forward to reporting its annual financial results in November.
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Knowledgebase
Insurance Policy: Broadly, the entire written contract of insurance. More narrowly, the basic written or printed document, as distinguished from the forms and endorsements added thereto.
