Kiwi insurance firm Tower has raised its catastrophe limit to NZ$915m (approximately US$533.96m) under its renewed reinsurance programme for the fiscal year 2026, according to a media release on Wednesday, 24 September.
This new upper limit, up from NZ$800m in FY25, covers competitive rates for home, motor, boat, and commercial portfolios across New Zealand and the Pacific.
Paul Johnston, Tower’s chief executive, stated that the company’s risk-based pricing strategy and its ability to adjust rates played a significant role in securing the renewal. “We’ve deepened partnerships with global reinsurers, with several committing to new multi-year agreements,” Johnston said, adding that these arrangements provide greater certainty amid future reinsurance costs and catastrophe excesses.
Tower projects that its reinsurance premium expense will account for 10.7% of gross written premium in FY26, compared to 13.3% in the preceding year. However, this will be partially offset by lower reinsurance recoveries on property risks once ceded to a proportional treaty, according to the company.
In addition to an increased catastrophe limit, Tower retained the coverage for a third catastrophe event of up to NZ$85m. Notably, it also shifted the coverage for large individual property risks from proportional reinsurance to excess of loss cover, to achieve lower premiums while maintaining protection for huge claims.
For reinsurance excess, the company is offering NZ$20m for the first two events–increasing from NZ$18.75m in FY25–and another NZ$20m for a third event.
Johnston, who was promoted from CFO to CEO in February this year, said, “We’re pleased to have secured a comprehensive programme with stable excesses and lower pricing.”
“This supports our ability to maintain competitive pricing for customers while protecting the business from volatility,” he added.
