TWR - Tower Insurance.

[Jaa]

From an insurance broker's point of view, Tower never ceases to amaze us in its ability to post losses, pay claims out of reinsurance revenue and all the while maintain its high dividend yield; who knows, maybe senior execs jumping ship before the ink's barely dry can be added to their list of industry-defying abilities?

http://www.insurancebusinessonline.c...ns-219853.aspx

Disc: Bought in at $1.24 last month despite my professional opinion/better judgement.

As a long suffering shareholder, I am getting tired of each year's "normal level of profitability" being diverted to upward revisions of estimated Christchurch earthquake costs.

Maybe the board got sick of the CFO's inability to accurately forecast the earthquakes total costs?

Whoever bought the extra $50m(?) of reinsurance after they happened deserves a pat on the back and to be listened to more. If it was the CFO maybe he got sick of being ignored?

All the reinsurance relating to the Chch earthquake is now gone. So lets hope they finally have it right!

[Jaa]

I should also add what a debt NZ and Christchurch owe to Tower, IAG, Suncorp and their reinsurance partners.

Tower was the least exposed to Christchurch of the major insurers and have been the fastest at settling Christchurch related claims. Yet they have run through all their reinsurance, the above mentioned bonus reinsurance and several years of profits to honour the claims. They have also held a large amount of excess capital over and above the Reserve Bank minimums as an extra safety buffer since the quakes (which I guess is now at risk).

Compared to the cowboys at AMI, Tower alone has probably saved NZ taxpayers half a billion dollars or so (and cost shareholders a $1+ a share). The big Aussie companies, billions and billions of dollars.

Not that anyone will care when selecting an insurer for their house, but they should.

[Under Surveillance]

I should also add what a debt NZ and Christchurch owe to Tower, IAG, Suncorp and their reinsurance partners.

Tower was the least exposed to Christchurch of the major insurers and have been the fastest at settling Christchurch related claims. Yet they have run through all their reinsurance, the above mentioned bonus reinsurance and several years of profits to honour the claims. They have also held a large amount of excess capital over and above the Reserve Bank minimums as an extra safety buffer since the quakes (which I guess is now at risk).

Compared to the cowboys at AMI, Tower alone has probably saved NZ taxpayers half a billion dollars or so (and cost shareholders a $1+ a share). The big Aussie companies, billions and billions of dollars.

Not that anyone will care when selecting an insurer for their house, but they should.

Could it be that the departing CFO is paying the price for having been gulled by Southern Response into supporting a syndicate including TWR acquiring SR at a knockdown price? Or perhaps he has been outspoken in pointing to the folly of TWR getting involved? I've heard it said that Key and Co have recently woken up to the hundreds of millions of unavoidable payouts that Southern Response has been deceitfully blind-eying, and want to flick SR and its obligations at "giveaway" terms to any willing dupes.

[BlackPeter]

Salt Asset Management accumulating: https://www.anzsecurities.co.nz/dire...spx?id=4193935

This should explain the rising SP ...

[winner69]

Tower along with all insurors as well as EQC/Gvt should all be ashamed of themselves

But they wont because that's how disaster capitalism works

Bastards

http://www.interest.co.nz/insurance/...ing-canterbury

[BlackPeter]

Tower along with all insurors as well as EQC/Gvt should all be ashamed of themselves

But they wont because that's how disaster capitalism works

Bastards

http://www.interest.co.nz/insurance/...ing-canterbury

Well - I guess the article is describing a less than perfect process as defined by government which had its first real test in a real world horror scenario. Of course are insurers benefiting from delaying claim payments, but I don't see any evidence that they systematically caused these delays.

Or are you referring to the comments below the article (which do hit ways under the belt) describing a (if true) terrible family tragedy without clear links to any actions (or lack thereof) of the insurance industry? Great example for absolutely irresponsible use of discussion forums, but nothing to do with irresponsible insurance companies.

I would be ashamed to use the tragic death of a child in this way ... but each to their own. It is certainly not an attempt to bring facts or rationality into the debate.

Back to the role of the insurance industry in the earth quake settlement business. The overwhelming majority of the effected house owners (me being one of them) have their claim settled and are happy with the settlement process. Yes, there have been some delays - and in the majority of the delays I am aware of, this was more due to the (by parliament created) complex interface between EQC and the private insurance industry or due to unclear responsibilities, than due to ill will on the side of the insurer.

And yes, there have been as well disputes around the scope of work. I am sure as well, that some have been due to the house owner wanting to get as well stuff fixed which was broken before (not every house owner is an innocent angel, even if they whing(e) like one ...) and sure - there have been cases where it was the insurer delaying the processing of the claim... maybe even due to staff being too cautious or distrusting.

I don't see a case to make against the insurance industry in general ... and if anything, Christchurch should be an example for the benefits of the industry. Just look at Earthquake damaged regions after 5 and 10 years in e.g. Turkey, Pakistan, Japan or Italy ... and than compare it with Christchurch. We don't know how lucky we are.

[Grunter]

Back to the role of the insurance industry in the earth quake settlement business. The overwhelming majority of the effected house owners (me being one of them) have their claim settled and are happy with the settlement process. Yes, there have been some delays - and in the majority of the delays I am aware of, this was more due to the (by parliament created) complex interface between EQC and the private insurance industry or due to unclear responsibilities, than due to ill will on the side of the insurer.

There have been rumours of sharp practices going on - with Insurers intentionally milking the disfunctional interaction between EQC and private Insurers to minimise the cost of claims on the Insurers, and maximise EQC's exposure.

Also, the likes of Tower have been using time and distance to reduce their cost of reinsurance each year. Hence the constant adjustments.

[bull....]

not looking good, bad management glad im out as those Canterbury earthquake claims to settle good bring the company down. investment income will keep declining as well industry headwind so will profit cover the claims or any other event? risky as

[Humphrey Appleby]

Could it be that the departing CFO is paying the price for having been gulled by Southern Response into supporting a syndicate including TWR acquiring SR at a knockdown price? Or perhaps he has been outspoken in pointing to the folly of TWR getting involved? I've heard it said that Key and Co have recently woken up to the hundreds of millions of unavoidable payouts that Southern Response has been deceitfully blind-eying, and want to flick SR and its obligations at "giveaway" terms to any willing dupes.

Are you able to substantiate that, Under Surveillance? While it's not impossible given how shady SR and DPMC have been about the total cost of their liabilities, I (and I daresay my broker colleagues) would be very interested to read more about if you've got something? It's the first I've heard of this! Cheers.

[BlackPeter]

There have been rumours of sharp practices going on - with Insurers intentionally milking the disfunctional interaction between EQC and private Insurers to minimise the cost of claims on the Insurers, and maximise EQC's exposure.

Also, the likes of Tower have been using time and distance to reduce their cost of reinsurance each year. Hence the constant adjustments.

Lots of rumours around ... however - rumours might often be vicious, but they are rarely based on facts. Are yours?

Related to the adjustments: not sure I understand your remarks re "using time and distance to reduce costs" but in terms of underestimating the size of the damage do I not think that Tower was the only entity getting it wrong. Actually - lets face it - nobody (neither state nor City nor any insurer including EQC) got it right fathoming the size of the damage in the first place ... so why outing Tower for underestimating the damage as well?