GWP and claims ratios are good long term indicators trending in the right direction, but rough to have another $10m punched out of this year isn't pretty. Backs up no dividend from earlier.
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GWP and claims ratios are good long term indicators trending in the right direction, but rough to have another $10m punched out of this year isn't pretty. Backs up no dividend from earlier.
I don’t think I would ever invest in tower. I’ve never known it to not be dramatic with its profit number lol
Fair enough.
I would say the Tower of 2023 isn't the Tower of 2017 which was not one I would invest in. Short term looks ugly but longer term I think there is value here in the underlying structure.
The last two years have been particularly crap claims environment, but the last 3 years have laid some good groundwork for a long term machine of profit.
Insurance companies are at the forefront of both climate change and social disharmony (widening disparities in wealth and indigenous/general population politics.) If premiums covered risks and investors’ expectations for profit margins adequately, they would probably shrink their customer base too much….
SO I wonder when global warming with climate uncertainty will make most of NZ uninsurable…
Disc: ex-shareholder
There is a significant difference is what is uninsurable, and risks that are not economic to insure. Risks that fall into these categories change over time for good reasons as both the propensity and severity of the underlying risk increases. Either because the peril environment (physical or otherwise) has changed or the understanding of the peril and the risk has changed. I'd wager there is almost no property that is uninsurable, that would also be liveable.
This is important as insurance is essentially a reverse clipping the ticket process. The absolute value of the underlying claims (going up down or sideways) is not so important as the ratio of claims and income. This is why fire and general policies change every 12 months - certainly for premium, and occasionally for terms and conditions.
Global warming is certainly changing the industry, and I suspect parts of New Zealand will gradually be uneconomic to insure, especially where not just the risk itself but the surrounding area mitigation is lacklustre. In part because the peril profile is increasing, and in part because our understanding of the perils is increasing. While primarily this flows through currently with more complicated and discrete risk premium rating calculations (i.e. premium increases), it is not unfeasible that rewards for mitigation of costs could result in the same effect in the different direction.
Seismic risks are more risks to the EQC pool and reinsurers pockets than any individual insurance company with good reinsurance coverage. The large part of NZ's insurance industry (those profitable Aussie insurers mostly...) went through Christchurch, Napier, Edgecumbe and all the intervening events while surviving and even thriving.
As an aside any climate change doubters only have to look how the insurers and reinsurers are responding - as they have the most money on the line here.
certain irony in insurance companies these days suffering from climate change and environmental issues
For decades they were amongst the biggest investors in the oil and mining industries ….zillions of the premium float invested in the worlds biggest polluters
Don’t feel sorry for insurance companies …but we should feel sorry for their customers (us) who are the real losers in carrying cost.
Just remember that after 30 September financial year end then FY23 is in the rear-view mirror and the slate is clean again.
This has been a very eventful period, and yes it will have a tail in administrative costs and other overhead given the adverse claims experience, and there will be no final dividend declared, but premiums have been recalculated and GWP is showing almost unprecedented % increase. Life will go on and perhaps better than before. Digitalisation is at the leading edge in the sector and is cutting overhead to offset increasing costs elsewhere in the business. And a decent cash return is now being received on premiums invested over the short term.
The very muted market reaction to this announcement tells its own tale!