The insurance company Tower has revised down its full year profit forecast following an above average number of large house claims.
Photo: RNZ / Dan Cook
The company expected underlying net profit for the year ending September to be between $19 and $21 million, a drop of $3m on its earlier guidance of between $22m and $24m.
It said the last quarter of the year had been particularly bad with four total loss fires in the past week.
The value of large house claims was double the year earlier, with 97 claims costing about $21.3m, up three quarters on last year's 56 claims costing $10.4m.
Tower said its costs and operations improvements were tracking to expectations, with ongoing challenges raised at the interim result announcement continuing to influence the second half.
It said industry-wide inflation was a continuing source of pressure on both motor and house claims.
This was predominantly driven by a 14 percent rise in the value of second-hand vehicles and increased costs of house materials which rose 4.6 percent in the June quarter, due to supply chain constraints.
Despite the challenges, Tower said the company was in a strong capital and solvency position and still expected to pay a final dividend, in addition to the 2.5-cent interim dividend announced previously.
Tower will release its full year result on 24 November.
