TWR - Tower Insurance

[Basil]

Interesting space

It sure is.  Many will remember the damage caused by the recent tsunami that hammered Tutukaka marina pretty badly.  https://www.nzherald.co.nz/northern-advocate/news/work-started-on-repairing-tsunami-surge-damaged-tutukaka-marina/AHBXEU3IN5E55AYOMXA4HCBHV4/
Looking at many properties in One Tree Point area south of Whangarei in Northland around the marina and waterways there is something I have been doing, also Ruakaka and Waipu Cove.  Nice area but many properties are very close to sea level, some only ~ 2 to a few meters above it.  One really decent tsunami could do immense damage there and also in Orewa and other low lying coastal area's  That fact is probably what's behind Tower's risk averse approach and has given me plenty of food for thought.  Sure you might be able to get insurance elsewhere but if its priced somewhere in the region of a "Rolls Royce" level, alarm bells should be ringing very loudly.  The other thing is peace of mind is a very valuable commodity.  Do you really want to buy a property that's vulnerable to a tsunami and always carry around that small risk in the back of your mind ?  That's a question I am really wrestling with but I think I know the answer and if Tower won't cover it, then I shouldn't take that risk with someone else either just because they will, at a much higher cost.  I guess we all need to have a really good think about what level of risk we can tolerate for the lifestyle some properties give you.  I think as you get older, most people are more risk averse.  Here's a good example. It wouldn't take much of a sea surge to wipe this house out.  https://www.trademe.co.nz/a/property/residential/sale/northland/whangarei/one-tree-point/listing/5448058760  Guess if Tower will cover it lol  G.V. is $3.17m, who's feeling wealthy and brave ?

[Left Field]

The implications of global warming, sea level rising and  storm extremes don't only effect your choice of a new home Basil.

In my coastal community our local yacht club was faced with an insurance renewal bill of $70k pa for their modest 1980's club room building as well as facing increasing maintenance and council compliance bills.

This non-profit, voluntary organisation has chosen to go uninsured and the community now lives in the knowledge that our precious community 'asset' could be lost at any time.

[Basil]

Wow. Do you mind sharing if the club tried to get a more competitive quote and what happened ? It would seem that was also a completly unpalatable quote.

This sort of thing must be going on all around N.Z  in low lying, vulnerable coastal area's.

I guess this is a good thing for Tower shareholders. At the end of the day it would seem that the days of low risk property premiums subsidizing higher risk ones is over although I suspect an element of cross subsidization still goes on.

[Umpah]

The thing to bring to mind you might get a quote this year but future years?

[Left Field]

Wow. Do you mind sharing if the club tried to get a more competitive quote and what happened ? It would seem that was also a completely unpalatable quote.

Yes I suspect their insurance Coy wanted out..... I'm not privy to the details but suspect they got alternative quotes.

I've also heard there are surf clubs in similar circumstances.

On a brighter note, talking to a farmer mate who had his Hawkes Bay property munted in the last cyclone floods (two houses, 3 utility buildings a shearing shed all gone plus kms of fences etc) he couldn't speak more highly of his insurer, got paid out within two months, is now fully repaired (in higher locations) and fully reinsured...... his insurer was FMG - the farmers co-operative.

Best you buy a seaside farm Basil!? lol.

[snapiti]

We are insured with FMG, they are becoming very risk adverse as well, won't take on anymore business in Wellington, now requires you to declare any local natural hazards the council records have on the property (flood zone, earthquake zones) wants to know your building site land slope.
Don't think I could sleep well at night without insurance but understand why more and more poeple won't pay for it because of how expensive it is and the government have bailed out the uninsured before. ( those with mortgages must carry insurance as it is in the mortgage document fine print)
Personally I think your insurance should reflect the individual risk of your own property, in saying that I also believe ACC levies should also reflect individual lifestyles (why should I subsidies someone who has risky lifestyle hobbies (rugby, mountain biking, quad riding, horse riding etc)

[HAWKDOG]

I agree insurance should reflect the individual risk of your own property however with extreme weather events its hard to predict - tornados in northland, pine forests blown over in Turangi/Nelson/Blenheim, landslides in Gisborne/Napier, drought, fires, earthquakes.
If you are on the flat you might flood, if you are on a hill your house may slide to the bottom - hard to win especially with how outdated the infrastructure is in this country.  I am in Gisborne - went through the Gabrielle ordeal - the weather has sucked for 4 years now - to the point where we have bought a holiday home over the hill to escape to better weather. 

Its likely to get worse, best to just to enjoy every day to the fullest otherwise you can put yourself in a doomer cycle and never leave the house.

[HAWKDOG]

It sure is.  Many will remember the damage caused by the recent tsunami that hammered Tutukaka marina pretty badly.  https://www.nzherald.co.nz/northern-advocate/news/work-started-on-repairing-tsunami-surge-damaged-tutukaka-marina/AHBXEU3IN5E55AYOMXA4HCBHV4/
Looking at many properties in One Tree Point area south of Whangarei in Northland around the marina and waterways there is something I have been doing, also Ruakaka and Waipu Cove.  Nice area but many properties are very close to sea level, some only ~ 2 to a few meters above it.  One really decent tsunami could do immense damage there and also in Orewa and other low lying coastal area's  That fact is probably what's behind Tower's risk averse approach and has given me plenty of food for thought.  Sure you might be able to get insurance elsewhere but if its priced somewhere in the region of a "Rolls Royce" level, alarm bells should be ringing very loudly.  The other thing is peace of mind is a very valuable commodity.  Do you really want to buy a property that's vulnerable to a tsunami and always carry around that small risk in the back of your mind ?  That's a question I am really wrestling with but I think I know the answer and if Tower won't cover it, then I shouldn't take that risk with someone else either just because they will, at a much higher cost.  I guess we all need to have a really good think about what level of risk we can tolerate for the lifestyle some properties give you.  I think as you get older, most people are more risk averse.  Here's a good example. It wouldn't take much of a sea surge to wipe this house out.  https://www.trademe.co.nz/a/property/residential/sale/northland/whangarei/one-tree-point/listing/5448058760  Guess if Tower will cover it lol  G.V. is $3.17m, who's feeling wealthy and brave ?

Its interesting that people put so much emphasis on the risk of a Tsunami when driving on NZ roads is astronomically more hazardous.

No one has died in a Tsunami in NZ in 50 years
On average 300-400 die on NZ roads annually.  15 over just xmas holidays last year

[Basil]

Less than a month to go until the end of the financial year.  I still think a significant majority of the $50m extreme event provision remains intact and they are likely to pay this out as a special fully imputed dividend in December along with the normal dividend.

My guess, a total of about 16 cps fully imputed in December made up of ~ 8 cps special and 8 cps ordinary dividend.
Say 75% of $50m reserve remaining, = $37.5m less tax at 28% = 27.0m / 341.54m shares = 7.9 cps.

What do you guys reckon ?

[Basil]

Pretty quiet in here, have some of you sold out and "insured" (you see what I did there ) your profit is realized not unrealized.

[Left Field]

Pretty quiet in here, have some of you sold out and "insured" (you see what I did there ) your profit is realized not unrealized.

Still see TWR as a long term hold and happily 'overweight.'

Also happy to leave dividend predictions to others.

[alkebab]

Less than a month to go until the end of the financial year.  I still think a significant majority of the $50m extreme event provision remains intact and they are likely to pay this out as a special fully imputed dividend in December along with the normal dividend.

My guess, a total of about 16 cps fully imputed in December made up of ~ 8 cps special and 8 cps ordinary dividend.
Say 75% of $50m reserve remaining, = $37.5m less tax at 28% = 27.0m / 341.54m shares = 7.9 cps.

What do you guys reckon ?

We had a bit of damage to our roof on Sunday with the wind in Auckland, but we're with AMI, lol. But not much was reported in the news so I don't think it would have been that bad, other than the delayed flights into Auckland.

There seems to be a lot of the short, sharp, extremely intense weather events (plus "atmospheric rivers") over the last 2-3 years. Don't recall anything like that before.

[alkebab]

Pretty quiet in here, have some of you sold out and "insured" (you see what I did there ) your profit is realized not unrealized.

We have another 3 months to go (late Nov) until FY25 results are announced, so the share price might languish here for a while unless we get another guidance update prior to that.

Maybe a few folks have cashed out for now and will come back closer to the FY25 announcement dates or even the ex-div date. Decisions decisions...

[Plata]

I think holding until results day is a safe bet, not much to see here until then so long as the weather plays ball.

[Dolcile]

Also still holding tight.  Just a game of patience.