Source: Radio New Zealand
Tower insurance chair Michael Stiassny says some progress to tackle the impacts of extreme weather events had been “haphazard, inadequate and painfully slow”. RNZ
- Tower paid out $12m already in bad weather claims, expects more
- Company has $45m fund for big events, a quarter already spent
- Full year underlying profit will be almost halved if events fund exhausted
- Chair criticises lack of action on climate change as “costing lives and money”
Local insurance company Tower expects a rise in weather-related claims will nearly halve its profits this year, as its chair criticised the lack of action to confront climate change.
The company’s annual meeting heard it had already used about $12 million of its budgeted $45m to cover large events, and expected more costs from the storms of the past week.
“This includes the October windstorm, the Timaru hailstorm in November, and the late January nationwide storm,” chief executive Paul Johnston said.
“Claims from the stormy weather across New Zealand over the past few days are still being assessed and at this early stage, Tower expects costs to exceed its … large events threshold.”
It forecast its full year underlying profit would be between $55m-$65m from a record $107m in 2025 if it used all of its large events fund.
Johnston told the meeting the first part of the year has been steady with growth in house policies, premium growth, and adding new customers.
The company said its risk based pricing meant it building a less vulnerable business, while its technical upgrades have sped up the processing of claims with more motor claims were being referred directly to repairers.
Climate change costing lives and money
The retiring chair, business veteran Michael Stiassny, said too little progress was being made in tackling climate change.
“In the wake of the tragic events at Mount Maunganui, Papamoa and Warkworth, we face a chilling reality. Climate change is here, and it’s costing lives and money.”
He said some progress to tackle the impacts of extreme weather events had been “haphazard, inadequate and painfully slow”.
Stiassny said three years after Cyclone Gabrielle there had been no decisive action to prevent loss of life, prevent building on flood plains, active measures to protect against floods from more frequent and severe rain events.”
“Are we confident that our infrastructure is resilient and will cope with large storms that are no longer anomalies? The answer is a resounding no.”
Insurance review questioned
Stiassny also questioned the planned review of the insurance industry ordered by the government earlier this month from financial regulators to look at the high cost of insurance and growing evidence that some companies are refusing to insure certain towns or parts of towns.
“The rate of premium increase is either on par with the sum insured increase or much lower. In short, premiums have not climbed as much as some Ministers have said,” he said.
“The real issue when it comes to insurance affordability is the cost of living more generally for Kiwis. With costs of all goods and services spiralling up significantly more than incomes, it is inevitable that some people are unable to afford insurance.”
He said levies for Fire and Emergency and Natural Hazards Insurance made up about 40 percent of premiums, over which it had no control.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
