Tower renews reinsurance program, expects lower premiums for FY26

Tower, a Kiwi insurer, has renewed its reinsurance program for the financial year ending 30 September 2026 (FY26), covering its home, motor, boat, and commercial portfolios across New Zealand and Pacific markets. The company estimates its reinsurance premium expense will decrease to 10.7% of gross written premium in FY26, down from 13.3% in FY25. This reduction is partly offset by lower reinsurance recoveries on property risks.

The FY26 program includes an increased catastrophe upper limit of $915 million, up from $800 million in FY25, and continued cover for a third catastrophe event up to $85 million. There's also a structural change in protection for large individual property risks, shifting from proportional to excess of loss cover, which contributes to lower reinsurance premiums while maintaining protection for large claims.

Catastrophe reinsurance excesses for FY26 are set at $20 million for the first two events (up from $18.75 million in FY25) and $20 million for a third event (unchanged from FY25). Tower chief executive Paul Johnston stated the renewed program reinforces the company's commitment to financial resilience and competitive pricing.