Tower asseses financial impact of claims from Tongan disaster

Friday, 21 January 2022

More pictures are also emerging revealing widespread damage from the volcanic eruption and tsunami.

Tower says it’s in the early stages of assessing the financial impact of Tongan tsunami damage.

The insurer owns National Pacific Insurance in Tonga, which is in a state of emergency following the eruption of underwater volcano Hunga-Tonga-Hunga-Ha’apai on Saturday.

Tower chief executive Blair Turnbull said his thoughts were with the people of Tonga, as well as the Tongan community in Aotearoa New Zealand.

“Our focus is on supporting our people and customers in Tonga who have been affected by this natural disaster,” he said in a statement to the NZX on Friday.

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In this photo provided by the New Zealand Defence Force, volcanic ash covers rooftops and vegetation in an area of Tonga, Monday, January 17, 2022. Thick ash on an airport runway was delaying aid deliveries to the Pacific island nation of Tonga, where significant damage was being reported days after a huge undersea volcanic eruption and tsunami.

“We are grateful that all our team members are safe. Our Nuku’alofa branch is now open, and we are assisting customers who have been severely impacted,” Turnbull said.

“Tower plans for such large-scale events. Alongside our robust reinsurance programme that supports our resilience, we are in a strong position to support our customers throughout Tonga’s recovery.”

About 2500 of Tower’s 310,000 total customers were in Tonga, he said.

Tonga’s population is just over 105,000 and many families have seen their homes damaged, or destroyed.

As well as selling house insurance, Tower has around 300 commercial customers, Turnbull said.

Tower was currently assessing the financial impact of this event.

Its reinsurance programme provided up to $873 million of cover for catastrophe events.

Its reinsurance excess for such events is $11.25m which is within the $20m Tower had allowed for large events in its current financial year, Turnbull said.

Tower would make a further announcement to the market about the financial impact of claims from Tonga customers in due course.