Tower Limited has finalised the renewal of its reinsurance programme for the financial year ending Sept. 30, 2026 (FY26), covering its operations in New Zealand and the Pacific.
The insurer reports that the updated programme provides coverage for its home, motor, boat, and commercial insurance portfolios.
The company projects that reinsurance premium expenses will account for 10.7% of gross written premium in FY26, a reduction from the 13.3% recorded in the previous year.
Tower notes that while this decrease will lower expenses, it will also result in fewer reinsurance recoveries on property risks that were previously ceded under a proportional treaty.
Paul Johnston, CEO of Tower, said the renewal demonstrates the company’s ongoing focus on financial stability and adaptability.
“Tower’s risk-based pricing strategy and ability to dynamically adjust rates has once again enabled us to secure favourable terms for FY26,” he said. “We’ve deepened partnerships with global reinsurers, with several committing to new multi-year agreements. These arrangements offer greater certainty around future reinsurance costs and catastrophe excesses, supporting our resilience.”
Among the notable changes in the FY26 programme:
For the upcoming year, the catastrophe reinsurance excess will be $20 million for the first two events, up from $18.75 million in FY25 due to the conclusion of previous multi-year arrangements. The excess for a third event remains unchanged at $20 million.
“We’re pleased to have secured a comprehensive programme with stable excesses and lower pricing," Johnston said. "This supports our ability to maintain competitive pricing for customers while protecting the business from volatility.”
Tower has also revised its financial outlook for the year ending Sept. 30, 2025. The company now anticipates underlying net profit after tax (NPAT) to be in the range of $100 million to $110 million, contingent on the absence of major catastrophic events in September.
This updated guidance is higher than the previous forecast of $70 million to $80 million, which assumed the full utilisation of a $50 million allowance for large events.
To date, Tower has recorded $7 million in large event costs for the current financial year. If this figure remains unchanged, the company expects to add approximately $31 million ($43 million before tax) to its underlying NPAT at year-end.
