Reinsurance recoveries for Tower Limited, a New Zealand based insurance company, from flooding in Auckland and Cyclone Gabrielle may now hit as much as $276m according to the carrier’s recently updated loss estimates.
The insurer had previously highlighted that it expected its excess-of-loss catastrophe reinsurance would be triggered by these events, with a retention of $11.875m of losses per-event before that cover attaches.
Regarding the Auckland and upper North Island floods and severe weather, Tower stated that claim numbers remain consistent with earlier estimates at around 5,550 claims.
Tower has now increased its estimate for the ultimate cost for this event to a range of between $195m to $225m. The insurer has previously said that its reinsurance recovery could have been between $83.125 million and $113.125m, based on a loss estimate of $95 million to $125m.
As these figures have been updated, this means that at the upper-end roughly $213m could be recovered from its excess-of-loss reinsurance partners for that event.
From Cyclone Gabrielle, Tower received approximately 3,350 claims, and has estimated the financial impact of this event to be within the range of $55m to $75m.
At the upper-end of that range, that could be a further $63 million in reinsurance recoveries, giving a total of $276 million should both events’ estimates move toward the top-end of its estimates.
Tower’s robust reinsurance arrangements have multiple levels of cover in place and provide up to $889m of catastrophe cover, the insurer stated.
Adding that, in line with its “prudent and comprehensive approach to reinsurance”, it is now looking to reinstate catastrophe reinsurance to cover the increased costs of the Auckland flood and severe weather event.
The New-Zealand based insurer also stated that it has full protection for a third catastrophe event and will reinstate full levels of protection for a fourth catastrophe event in the financial year.
On cyclone Gabrielle, Tower said that it has sufficient reinstatement cover for claims regarding this event.
