Tower is to pay more for its re-insurance coverage, meaning insurance premiums are to increase by 20% to 30% on average .
After the Canterbury earthquakes, Tower changed its modelling to reflect the greater damage caused by the second quake in February.
It has now obtained cover for two catastrophe events for the October 2012 year, lifting its excess from $5 million to $6.7 million.
Managing director Rob Flannagan says that as well as a significant increase in reinsurance costs, mean rates for house, contents and motor policies will rise.
Mr Flannagan says while premiums are set to rise 20% to 30% on average, Christchurch and Wellington will carry a higher risk than Auckland.
Tower reiterated that it expects to make a profit of $22 million to $28 million in the year to September and that it is well-capitalised.
