New Zealand insurer Tower has completed the purchase of additional reinsurance for the remainder of its financial year following impacts from Auckland flooding and Cyclone Gabrielle.

This additional purchase of $NZ100 million ($94.5 million) of cover reinstates protection for a fourth catastrophe event up to $NZ889 million ($840 million) for the year ending September 30. Prior to the reinstatement Tower had protection for a potential third event up to $NZ889 million ($840 million).

The company says it has sufficient reinstatement cover for Cyclone Gabrielle claims and will provide further reinsurance details when it releases its first-half results tomorrow.

Tower previously advised that it intended to buy more reinsurance when it early this month forecast a first-half loss and cut its full-year guidance due to the string of catastrophes in New Zealand and Vanuatu over a three-month period.

Tower has said it expects a first-half after-tax loss of around $NZ3 million ($2.8 million) and anticipates not paying an interim dividend. A decision on a full-year payment will be made when annual results are finalised. 

Full-year underlying net profit guidance was cut to $NZ8-13 million ($7.6-12.3 million) from $NZ18-23 million ($17-21.7 million), including the expected cost of reinsurance reinstatements as well as an increase in the large events allowance.