1 May 2015

Small tumble for Tower share price

2:53 pm on 1 May 2015

Tower's share price is down 2 percent this morning, as claims from the Canterbury earhtquakes continue to mount.

The insurance company says customer claims from the Canterbury earthquakes are likely to increase by between $20.9 to $22.4 million.

Tower Chief Executive David Hancock said it had been difficult to estimate the total cost of the damages, but the costs estimates had become more certain with time.

He said the company had now settled 94 percent of the volume of claims relating to the earthquake events in 2010 and 2011, and it remained on track to complete 95 percent by the end of this calendar year.

Mr Hancock said Tower was well capitalised and could manage the increased claim costs from its current reserves of around $110 million.

The company will give details of its capital management program later this month, when it releases its first-half result.

As well, Mr Hancock said Tower had also issued a fresh guidance for an improved operating profit of between $17 and $18 million, for the six months ended in March, which is better than the market forecast.