New Zealand insurer Tower Insurance boss Blair Turnbull recently shared his thoughts on a marked downturn for the company, citing the effects of the Auckland Anniversary floodings and the more recent Cyclone Gabrielle as the biggest factors. Addressing these devastating weather events, Turnbull said that “we need to stop building in areas that are prone to floods and coastal erosion” in order to avoid disasters like the recent ones in the future.
“We need to help communities to face into that,” Turnbull said. Admitting that his opinion could be unpopular, he added, “it’s tough to talk about it. It’s a managed retreat. But we need to start talking about it, and we need to help transition some of those communities away from flood-prone areas.”
“The last two years we’ve all been talking about the pandemic and inflation that always keeps rubbing us in back pockets,” Turnbull told NZ Herald when asked about the possibility of higher premiums. “We’ve managed to weather that one, now we’re getting storms. Inevitably, if inflation and these storms continue, it will result in higher reinsurance costs and higher premiums.”
Turnbull said that despite the company’s efforts to invest in technology and efficient operations, allowing Tower Insurance to absorb a lot of the costs associated, insurance premiums will inevitably go up “to reflect higher inflation.”
According to Turnbull, the Auckland Anniversary floods cost Tower between NZ$95 and NZ$125 million. Cyclone Gabrielle’s total costs are still unknown, but Turnbull restated Tower’s resiliency and the company’s preparedness with its reinsurer.
“We are increasing our allowance for large events from 30 to 40 million,” Turnbull said. “We think it’s appropriately prudent to do that since there is quite a lot of the year to go, in terms of our financial year. We’re very pleased to be helping impacted customers and communities. We’ll do that today, and we’ll make sure to do it tomorrow as well.”
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