Tower estimates claims related to floods in Auckland that began January 27 will cost it $NZ95-125 million ($86-114 million), and says it has also received almost 1000 claims so far for damage caused by Cyclone Gabrielle last week.

Tower lowered its net profit forecast to $NZ18-23 million ($16-21 million), from a previous estimate of $NZ27-32 million ($25-29 million).

“This guidance reflects positive actions taken by Tower to prepare itself for future events, including an increase in Tower’s large events allowance ... and the expected cost of reinstating reinsurance arrangements,” a statement to the stock exchange said.

The deadly floods devastated Auckland and surrounds and killed four. Insurers have received more than 40,000 claims, and the Insurance Council of New Zealand (ICNZ) says it was the nation’s most expensive insured weather event, excluding earthquakes.

Tower received 4850 claims from the event. Costs will largely be covered by its reinsurance for catastrophe events, which has an excess of $NZ11.88 million ($10.78 million).

“Our hearts go out to the many Kiwis who have been devastated by these two natural disasters in quick succession. Tower has been working tirelessly to support customers through this extremely difficult time,” Tower CEO, Blair Turnbull said.

A national emergency was declared for New Zealand after Cyclone Gabrielle destroyed infrastructure, homes, businesses and roads and left large parts of the North Island cut off. The death toll has climbed to 11.

Tower expects further Cyclone Gabrielle claims as people in affected areas regain access to their properties and power and communications are restored. It is also expected to trigger Tower’s reinsurance for catastrophe events, with the same excess amount.

“Tower’s solvency position remains strong, despite the occurrence of potentially two catastrophic events so early in the financial year,” the insurer said.

Tower cut its dividend forecast and says a decision will be made later on whether to pay an interim dividend.

“Tower remains financially strong and is well placed to continue supporting customers and communities through the recovery,” Mr Turnbull said. “The personal and economic impacts of these events is a reminder of the critical role insurance plays in bolstering our collective resilience.”