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Tower lifts premiums for house, contents and motor cover

Monday 1st October 2012

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Tower said it has raised its premiums for house, contents and motor insurance to reflect an increase in charges from reinsurers after locking in $525 million of cover for the 2012/2013 year.

Tower's excess has risen to $11.7 million from $6.7 million a year earlier, the company said in a statement. The programme again involves reinsurance cover for two catastrophe events, it said.

"Due to changes in the programme, and an increase in premium levels charged by reinsurers, Tower's total reinsurance premiums for the 2012/13 year will be higher than in 2011/12," it said.

Tower, which is about one third-owned by Guinness Peat Group, last month lowered its annual profit guidance because of the impact of Christchurch earthquake claims and as it concluded a strategic review.

The Auckland-based company said market expectations of profit for the year ending Sept. 30 should be reduced by $9.4 million "to take into account increases in claims provisioning relating to the February 2011 event."

Tower made a profit of $33.4 million a year earlier and the downgrade amounts to a one-time impact of 3.5 cents a share, it said.

The shares last traded at $1.81 and have gained 18 percent this year.

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