New Zealand insurer Tower  says its business faces an ultimate cost of  about $NZ2.8-3 million  ($2.6-2.8 million)  before  tax  from the floods that inundated the Canterbury region last month.

The insurer made the projections in an investor update, saying it has received 164 claims in relation to the disaster.

Tower says as a result, the business has lowered its earnings guidance for this financial year to September 30 to $NZ22-24 million  ($20.4-22.3 million)  from $NZ25-27 million  ($23.2-25 million). The old forecast assumed large event costs of $NZ9.7 million  ($9 million).

“Given the subsequent occurrence of the Canterbury floods, Tower now assumes full year large events of $NZ14 million  ($13 million), being the point at which aggregate reinsurance for large events applies,” the update said.

The entire Canterbury region was  declared a state of emergency  last month  as heavy rains and flooding prompted the evacuation of hundreds of residents and 3000 homes were at risk of flooding.