Insurer relays effects of Cyclone Pam on its Pacific presence

Insurer relays effects of Cyclone Pam on its Pacific presence | Insurance Business

Insurer relays effects of Cyclone Pam on its Pacific presence
Tower has advised that it does not expect to be affected by Cyclone Pam, despite having a significant presence in the Pacific Islands.

The company said its representation was in seven territories including the Solomon Islands and Fiji, both of which had been affected by the storm, but it said it had no exposure in Vanuatu which was the most significantly hit.

Indeed, earlier this week, experts had predicted Tower’s Cyclone Pam-related claims to be in the hundreds of thousands, which was a much lighter hit than expected.

However, longer term, industry analysts were saying the company’s plans to grow in Vanuatu would be hampered as a result.

Last year, Tower CEO David Hancock told Insurance Business the company was actively investigating expansion opportunities in the Pacific, saying they were looking at territories that Tower did not yet have a presence in but their competitors did.

Now, according to a report this week by Forsyth Barr analyst James Bascand, the future of that expansion looks uncertain.

“The Pacific remains a key focus for Tower from a growth perspective, with the company having highlighted that it is considering expansion into both Vanuatu and Timor L’Este.

“We expect the aftermath of Cyclone Pam will slow down any expansion into Vanuatu, and potentially bring additional competition into the market as companies look to capitalise on new, higher spec builds and potentially higher premiums.”

He added: “We believe Tower will continue to look into expansion into the Pacific, and expect an update during this fiscal year.”

Tower was unavailable to comment further on the subject when approached by Insurance Business.