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09-07-2010, 11:21 AM
#101
The life tax changes are estimated to cost the industry $75m in profit a year, Tower's share of this would be around $7m. Under the changes existing life insurance policies can be grandfathered under the old laws for 5 years so most of the damage will be hidden for a while.
Will however give a short term bump in new business as policy holders scrambled to sign up for new policies and lock in their old premiums over the last couple of months. Just watch out for the inevitable drop post July 1. Be wary of any spin in the next report about "record levels of new business". Same kind of effect as the GST change only much larger. Premiums have risen from 5-22% across the industry.
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05-09-2010, 08:43 AM
#102
Whats the earthquake likely to cost tower?
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05-09-2010, 01:14 PM
#103
Originally Posted by ratkin
Whats the earthquake likely to cost tower?
I would think all insurance company share prices will take a hit when the market opens on monday. I also wonder tongue in cheek if they insured themselves up to the point of being able to trade out of it without going under. Macdunk
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05-09-2010, 10:11 PM
#104
Member
Originally Posted by duncan macgregor
I would think all insurance company share prices will take a hit when the market opens on monday. I also wonder tongue in cheek if they insured themselves up to the point of being able to trade out of it without going under. Macdunk
Great opportunity to buy into if that does happen. But I think it won't happen.
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06-09-2010, 09:12 AM
#105
Member
Don't insurance companies have insurance for such events.
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06-09-2010, 10:21 AM
#106
I would think that the least profitable companies up to this point will tend to be risk adverse reinsuring to the point where they tend to be over reinsured for events like this. The problem that I see is if one company goes under creating a domino crisis with other more conservative companies. There is a lot of money to come out of this sectors profits, it would be a brave investor who would dip in trying to bottom pick.
Macdunk
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06-09-2010, 11:22 AM
#107
Member
Sounds interesting Belg...what icomps would you consider...
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06-09-2010, 12:17 PM
#108
Tower expects claims to cost the company $5m before tax, after reinsurance.
$3.5m after tax.
Last edited by macduffy; 06-09-2010 at 12:19 PM.
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06-09-2010, 12:38 PM
#109
Originally Posted by macduffy
Tower expects claims to cost the company $5m before tax, after reinsurance.
Originally Posted by belgarion
There we go - annoucement out - I’m guessing the 5 mill “cap” would have been where their Catastrophe (a form of stop loss that works at the whole-of-portfolio level) re-insurance contract fires. Pretty conservative and good to see that they took a bit of risk but not a big one.
So is $5m their effective 'excess' to be able to claim from their re insurers.
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06-09-2010, 12:48 PM
#110
Originally Posted by macduffy
Tower expects claims to cost the company $5m before tax, after reinsurance.
$3.5m after tax.
This is the exact amount as they were liable for the Samoa Tsunami last year. Must be a general contract for any event. Good to know for any future disasters.
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