New Zealand insurance company Tower has renewed its reinsurance package with increased cover at lower cost for the coming year.

The company said it had secured cover for all its major businesses for home, motor, boat and commercial for its New Zealand and Pacific customers at favourable rates.

“Tower’s focus on risk-based pricing combined with our dynamic rating ability helped us secure favourable terms for our FY25 (financial year) reinsurance,” chief financial officer Paul Johnston said.

“We’ve further strengthened relationships with global reinsurers, with several agreeing to new multi-year arrangements, which provides greater long-term certainty of reinsurance costs and catastrophe excesses.”

Reinsurance is the insurance cover taken out by insurance companies to cover potential claims from disasters.

Tower has increased its maximum catastrophe cover, with increased payment for some policies but unchanged for others.

Overall the cost of its reinsurance programme has fallen to 11.7 percent of income from the previous year’s 13.9 percent.

Johnston said the new arrangements were aimed at providing financial protection from large events volatility, maintain financial flexibility to support growth, and underpin solvency.

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