Tower narrows loss

WELLINGTON: Tower has narrowed its firsthalf loss as its underlying earnings improved, offsetting yet another unexpected increase in the cost of the Canterbury earthquakes.

The Aucklandbased insurer reported a loss of $8.4 million in the six months ended March 31, from $8.7 million a year earlier, it said yesterday.

While underlying earnings rose 7.6% to $8.1 million, the general insurer added another $9.8 million to its provisioning for the Canterbury earthquakes, which levelled much of what was then the country’s secondbiggest city in 2011.

Tower’s claims from the Canterbury quakes totalled $892.7 million at March 31, of which $744.1 million was covered by reinsurance, and the cumulat ive impact has climbed to $124.3 million after tax from $91.3 million a year earlier.

‘‘Tower continues to make solid progress settling claims in Canterbury. However, issues with EQC (Earthquake Commission) continue to confront the entire industry,’’ chief executive Richard Harding said.

The insurer increased provisioning for the Canterbury quakes by $25.3 million in the 2016 financial year and carved out those problematic claims in a separate entity called RunOff.

Also weighing on the bottom line was a $7.2 million expense for the Kaikoura earthquake and a $3.6 million hit from the ‘‘Tasman Tempest’’ storms and Port Hills fires.

The board continued to suspend dividend payments. The shares last traded at $1.125. — BusinessDesk