Chch quake to hit Tower profit

Last updated 09:32 04/09/2012

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Insurance company Tower says its net profit for the year to September will take a $9 million hit due to the February 2011 Christchurch earthquake.

It told the stock exchange this morning that the impact of the Christchurch earthquakes continued to involve "elements of uncertainty" for the firm, and the board felt it was prudent to make conservative provisions.

Claims had not dented Tower's underlying financial strength, but net profit after tax for the current year would be reduced by $9.4m, equal to a one-off impact of 3.5 cents per share, it said.

Total claims and provisions would exceed Tower's reinsurance cover of $325m, but the company had since increased its reinsurance to $500m per event.

Group managing director Rob Flanagan said Tower remained well capitalised at approximately $475m of equity, well in excess of regulatory capital requirements.

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