Tower reduced its forecast for annual profits and dividends following the North Island floods and Cyclone Gabrielle.
The insurance company now expects net profit after tax of between $18 million to $23 million, down from a previously estimated range of $27 million to $32 million.
Tower said it had taken proactive steps to position itself for the future. It increased its large events allowance from $30 million to $40 million and took steps to restore its reinsurance arrangements.
The insurer made a downward revision to its dividend forecast. It now expects a dividend of 5 cents per share for the full year, rather than a 6.5 cents per share dividend.
Tower reiterated its strong solvency position.
The company will decide whether or not to distribute an interim dividend once its half-year results are ratified.
Tower chief executive Blair Turnbull said the business was in a good position to assist customers and communities during the recovery.
He said the individual and financial effects of the summer’s weather events underlined the essential role of the insurance sector.
Tower said there had been a significant increase in claims between early to mid-February.
As of February 17, the underwriter reported that approximately 4850 claims had been made.
According to a Tower estimate, the total cost of the weather-related incidents in Auckland and the Upper North Island will range between $95m and $125m.
The insurer has received approximately 945 claims for damage caused by Cyclone Gabrielle and the firm is still estimating the financial impact.
Tower expects a further rise in claims from affected regions as people return to their homes.
The group stated that it lacked information to calculate the ultimate cost of Cyclone Gabrielle, but that the event would most likely trigger its catastrophe reinsurance, which had an excess of $11.875 million.
