Kiwi insurer reassures market after quake hits share value
Tower Limited has revealed its reinsurance cover details after taking a hit to its share value following yesterday’s 7.5 magnitude earthquake.
The Kiwi insurer was the biggest decliner in the S&P/NZX 50 Index ending the day down 7.1% to 79c, the NZ Herald reported.
The price recovered by the end of the day after initially being down 9.4% in the morning which one analyst put down to most property damage appearing to be superficial rather than structural as initially anticipated.
Tower issued a statement today saying it was still in the early stages of assessing the impact of the earthquake event with its priority being helping its customers to get their homes and businesses restored and their lives back on track.
Until it had properly assessed the damage it could not say what the ultimate financial implications would be.
“Given the continuing aftershocks and difficulties in reaching some impacted areas, Tower will not have a thorough understanding of the damage – and therefore the financial implications of the earthquakes – for some days yet,” the insurer said.
“However, Tower’s reinsurance program provides over $700 million of cover for events such as this.
“Tower advises its reinsurance program provides cover once the excess of $10 million has been surpassed.
“Therefore the maximum possible impact is $7.2 million after tax.”
The company said it would make a further announcement to the market ‘in due course’.