Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
The 11 June announcement from TWR (giving an update on the financial impact of the Canterbury floods) noted that the assumption was that TWR was now at a large events cost of $14m for the current financial year and therefore the reinsurance cover would kick in. If the announcement is correct and yesterday’s weather event turns out to be a large event, it should be TWR’s reinsurers rather than TWR shareholders that pick up the financial cost.
Last edited by Southern Lad; 20-06-2021 at 11:58 AM.
The 11 June announcement from TWR (giving an update on the financial impact of the Canterbury floods) noted that the assumption was that TWR was now at a large events cost of $14m for the current financial year and therefore the reinsurance cover would kick in. If the announcement is correct and yesterday’s weather event turns out to be a large event, it should be TWR’s reinsurers rather than TWR shareholders that pick up the financial cost.
Does the reinsurance kick in on a per event basis or per annum basis?
Does the reinsurance kick in on a per event basis or per annum basis?
Don’t know
If they do need this reinsiurance this year helps this years profit but reinsurance premium / cost will only be higher in subsequent years as no doubt premiums based on past claims experience.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
So as the tornado is likely only a 'little event' (insurance wise) no need to call on reinsurance?
From previous attached chart it appears there are two elements to the reinsurance.
One being for Catastrophe events with cover the steps in after 10m Tower spend and up to 767m cover with also an additional catastrophe cover extending to 812m. I cant find find definition of what constitutes a "catastrophe event"
The second reinsurance cover appears to be for "events" ( would think this excludes BAU claims) that are not catastrophe events with the first 14M spend per annum covered by Tower and then reinsurance stepping up with up to 7.5m per event once Tower has spent 14M per annum and reinsurance covering up to 34m per annum total
BAU claim spend likely excluded from all these figures.
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