Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Tower's minimum solvency reduced as quake claims progress

Tower's minimum solvency reduced as Canterbury claims progress

By Suze Metherell

Aug. 22 (BusinessDesk) - Tower's minimum solvency margin has been reduced by $30 million as the Reserve Bank relaxes the amount the insurer needs to have on hand as it progresses through its Canterbury earthquake claims.

The general insurer is now required to carry a minimum of $50 million, from a previous $80 million, to retain its insurance licence from the central bank, it said in a statement. According to Tower's website it carried a group solvency of $147.4 million at March 31, 2014. In 2010 and 2011 New Zealand's second largest city, Christchurch and its Canterbury surrounds, were devastated by three earthquakes. The cost of the subsequent rebuild has been estimated at $40 billion, according to the Reserve Bank.

Tower expects to complete all Canterbury earthquake related claims by 2015, having settled 81 percent of its cases. In the six months ended March 31, Tower said it has $22.1 million in claims related to the earthquake, all covered by reinsurance, while in the year ended Sept. 30, 2013 it had a gross claims of $72.2 million in relation to Christchurch.

"We're pleased that our efforts in resolving claims have been recognised and this capital will be released," said chief executive David Hancock. "We will continue to keep the RBNZ informed on the progress of our programme of work in Canterbury."

Tower has sold off its life, health and investment units to focus on general insurance, and has flagged a return of capital to shareholders once its Christchurch claims are completed.

Tower shares last traded at $1.87, and have gained 8.7 percent in the past year.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Shocking Dairy Footage: MPI Failing Our Animals And Damaging Our Reputation

Greens “Nathan Guy needs to urgently look into how his ministry is enforcing animal welfare standards, how these appalling incidents happened under its watch and what it’s going to do prevent similar incidents happening again in the future." More>>


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news