Tower has issued a profit warning after setting aside more for insurance payments to people affected by the Christchurch earthquake in February 2011.
The listed insurer and fund manager says the quakes continue to cause uncertainty and it has reduced its profit forecast by $9.4 million for the year to September.
Tower's previous full-year earnings have already been badly affected by the Canterbury quakes which began in September 2010 and include the devastating tremor in February last year.
Despite its profit jumping four-fifths to $23.6 million in the six months to March, Tower says an increase in the amount of money set aside to cover claims from the February quake will lessen earnings.
The company says it equates to a one-off reduction of 3.5 cents per share.
Tower expects the total claims and provisions will exceed the $325 million of reinsurance cover it has in place and has increased its cover to $500 million per event since the quakes.
The share price fell 6 cents, or about 3%, to $1.78 per share by the close of trade on Tuesday.