Someone watching the rain radar?
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Someone watching the rain radar?
Id expect some claims but so far everything is holding together.
They will pay that dividend & the next one imo. There’s enough balance sheet capacity & underlying earnings to do so.
Issue with Tower is the state of the insurance industry & the recurring ‘one-offs’ which many investors would now view as normal.
https://www.nzherald.co.nz/nz/wild-weather-hits-new-zealand-heavy-rain-flooding-fears-for-christchurch-canterbury/CE5ZG7CIANC6WBPJWBUEOC4O2Y/
So Tower comes across as a company with volatile earnings & with the latest results, as a company with limited earnings growth potential.
Unfortunately, as per my previous post on this on 18 May, with the ever increasing effects of climate change extremely unusual weather events like the rain affecting Canterbury this weekend are going to be more and more frequent to the point where they become so regular they become normal. Not a good sector in my opinion.
I can't take any credit for this insight as I was very fortunate to have a very loyal client who worked on contract for Metservice for over 50 years. Lovely old chap and the last time I saw him when he retired he told me, don't believe all this one in 100 year weather event nonsense. You'll get at least one, more often two of these so called one in one hundred year weather events every year. He went on and told me some other really scary stuff....basically the amount of methane now being released from ice sheet melting means we are on an irreversible road to catastrophic climate change irrespective of what we do with CO2 emissions. https://cage.uit.no/2021/04/28/metha...ng-ice-sheets/
If there were 20 distinct locations within the country, a 1 in 100 event should happen to the country every five years. There are multiple types of events that are individually described by there frequency, so you get back to an event every few years. Start considering 1:20 year events and a year without something should be the exception.
Across the country seeing regular (but not super regular) infequent events shouldn't be a problem if Tower has done the underlying risk maths correctly. Some risks vary by location and Tower is at least some of the way towards higher premiums where there is a higher claim risk.
Tower said as it was experiencing higher call volumes than usual, due to the state of emergency in Ashburton, it was asking people from other areas with non-urgent inquiries to lodge their claims online through the My Tower app, or via its website.
“We hope everyone is keeping safe. Make sure to take extra care on the roads or avoid driving if possible, and if water has entered your house, make sure to turn the power off,” it said in a Facebook post.
https://www.stuff.co.nz/business/mon...for-some-weeks