Tower, the insurer whose cornerstone shareholder Guinness Peat Group is looking to sell its stake, has increased its premiums on rising costs of reinsurance.
The Auckland-based company is passing on the increased costs to its customers through higher premiums for its house, contents and motor policies, it said in a statement. That comes after it secured reinsurance cover for two catastrophe events in the 2012 financial year with excess an of $6.7 million for an event, up from $5 million a year earlier."
Tower kept its forecast earnings range of between $22 million and $28 million, and said it meets solvency requirements under the Reserve Bank's new prudential supervision regime.
Insurance companies have been struggling to secure reinsurance cover for the Canterbury area after a series of earthquakes over the past year caused billons of dollars in damage and killed 181 people. Tower has previously flagged the cost of the quakes at between $22 million and $26 million.
The insurer said it's looking for growth opportunities, and has shown interest in buying rival AMI Insurance after the Christchurch-based insurer was forced to ask the government for a bail-out following the February earthquake.
