24 Nov 2015

Tower Insurance blames $7m loss on extra quake costs

2:05 pm on 24 November 2015

Tower Insurance has made a loss of nearly $7 million for the year ended September, because of extra costs of the Canterbury earthquake claims.

Christchurch construction.

The ongoing costs of rebuilding a quake-shattered Christchurch have hit Tower insurance's bottom line Photo: RNZ / Alexander Robertson

It had warned the market last week that it would drop into the red, because of the higher cost of repairs and rebuilding - and an increased risk margin.

Leaving aside the quake claims, Tower's underlying earnings were up 12 percent to $28 million, although it said its market share and revenue were essentially flat.

It had raised its dividend payout and was going to continue with its share buyback, which had so far cost about $12 million.

Chief executive Richard Harding said the company was confident there were no more shocks and they had the resources to continue with the return of capital to shareholders.

"We've got a much deeper level of certainty around the provision of where we are. We have clarity about that in terms of how claims are developing over time," he said.