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- Release Date: 04/09/12 10:39
- Summary: FORECAST: TWR: TOWER adjusts Christchurch earthquake provisions
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TWR
04/09/2012 08:39
FORECAST
REL: 0839 HRS Tower Limited
FORECAST: TWR: TOWER adjusts Christchurch earthquake provisions
(Auckland - NZ) TOWER Limited today announced that the impact of the
Christchurch earthquakes continues to involve elements of uncertainty for the
company and the Board feels that it is prudent to be conservative when
providing for the amounts that will be paid out to affected policy holders.
While claims have not dented TOWER's underlying financial strength, market
expectations of TOWER's net profit after tax for the year ending 30 September
2012 should be reduced by $9.4 million to take into account increases in
claims provisions relating to the February 2011 event. This equates to a
one-off impact of 3.5 cents per share.
While TOWER's reinsurance cover for this event has not been fully utilised,
continued notification of claims and the application of an appropriate risk
margin, together with an inflationary allowance, will bring the total claims
and provisions over TOWER's $325m of cover. Since the Christchurch
earthquakes, TOWER has increased the limits on its reinsurance program to
$500m per event.
Group Managing Director, Rob Flannagan, confirmed that TOWER remains well
capitalised at approximately $475m of equity, well in excess of regulatory
capital requirements.
Mr Flannagan also advised that TOWER had concluded a strategic review that
began earlier this year. The review involved a comprehensive evaluation of
aspects of the TOWER Group including capital structure, its existing four
business units (Health, Life, Investments and General Insurance), and
strategic acquisition and divestment opportunities.
Mr Flannagan said TOWER expects to be able to provide further information
next week.
Ends
For further information, please contact:
Rob Flannagan
Group Managing Director
TOWER Limited
Tel: +64 9 369 2279
ARBN 088 481 234 Incorporated in New Zealand
End CA:00226861 For:TWR Type:FORECAST Time:2012-09-04 08:39:37
