New Zealand-based insurer Tower has renewed its reinsurance programme for the financial year ending September 2026, increasing its catastrophe cover limit to NZ$915 million from NZ$800 million in 2025.
Meanwhile, the renewed programme includes continued coverage for a third catastrophe event of up to NZ$85 million, along with a structural shift in protection for large individual property risks, transitioning from proportional to excess-of-loss coverage, which reportedly reduces reinsurance premiums while maintaining strong protection for large claims.
Under Tower’s renewed 2026 programme, the catastrophe reinsurance excess is set at NZ$20 million for each of the first two events, up from NZ$18.75 million in 2025 following the expiry of multi-year arrangements. It remains at NZ$20 million for a third event, unchanged from last year.
On this, Tower CEO Paul Johnston commented, “We’re pleased to have secured a comprehensive programme with stable excesses and lower pricing.
“This supports our ability to maintain competitive pricing for customers while protecting the business from volatility.”
Tower estimates its reinsurance premium expense will represent 10.7% of Gross Written Premium in the 2026 financial year, down from 13.3% in 2025.
“The reduction in reinsurance premium expense will be partly offset by lower reinsurance recoveries on property risks that were previously ceded to a proportional treaty,” the firm added.
Johnston continued, “Tower’s risk-based pricing strategy and ability to dynamically adjust rates have once again enabled us to secure favourable terms for FY26.
“We’ve deepened partnerships with global reinsurers, with several committing to new multi-year agreements. These arrangements offer greater certainty around future reinsurance costs and catastrophe excesses, supporting our resilience.”
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