New Zealand insurer Tower has renewed its reinsurance program for the financial year ending September 30, 2027.

The firm says it has secured comprehensive cover at competitive rates across its home, motor, boat, and commercial portfolios across New Zealand and Pacific markets. 

Tower estimates its reinsurance premium expense will represent 9.5% of gross written premium in FY27, down from 10.6% in FY26.  

Key details of the FY27 reinsurance program include: 

•Catastrophe upper limit increased to $NZ970 million ($779 million), up from $NZ915 million ($735 million) in FY26 

•Increasing cover for third catastrophe limit to $NZ100 million ($80 million), up from $NZ85 million ($68 million) in FY26, which the firm says improves structure, while supporting efficiency 

•Catastrophe event excesses remain at $NZ20 million ($16m), unchanged from FY26 

• As in previous years, the $NZ970 million ($779 million) catastrophe limit includes a pre-paid reinstatement, providing cover for two large catastrophe events. 

Tower CEO Paul Johnston says the reduction reflects a combination of favourable global reinsurance market conditions, Tower’s strong business performance, and the FY25 and FY26 expansion of its risk-based pricing capability across additional perils. 

“Our disciplined approach to risk selection, pricing and portfolio management has helped us secure a strong outcome for our FY27 reinsurance arrangements, supporting Tower’s ongoing resilience and ability to offer competitive pricing for customers,” he said. 

Tower has revised its approach to securing its third catastrophe limit of cover. In prior years, Tower purchased this cover annually as a prepaid limit. For FY27, Tower has secured this cover on pre-agreed terms, payable if two catastrophe events occur.

The insurer says it has also continued to strengthen its relationships with global reinsurers, with several partners committing to new multi-year agreements.

These arrangements provide greater certainty around future reinsurance costs and catastrophe excesses, it says.