14 Mar 2011

Tower premiums to rise due to Christchurch quake

12:57 pm on 14 March 2011

Insurer and fund manager Tower says last month's earthquake in Christchurch will restrict its full year earnings and force up premiums.

The listed company says costs may jump by $15 - $20 million, due in part to paying a $3.5 million excess on its reinsurance and buying additional reinsurance afterwards.

It says these costs will not be recovered in this September financial year, hitting its bottom line.

Tower also warns premiums will increase in the future.

Meanwhile, Tower says it does not expect to make a decision on a return of capital to shareholders in the short term.