Tower NZ has been forced to buy more reinsurance cover following the latest earthquake in Christchurch.

Due to the high cost of the extra reinsurance, Tower is warning it will increase the company’s expenses this financial year and that will hit its bottom line.

“These costs are expected to amount to $NZ15 million to $NZ20 million ($11 million to $14.6 million) after taxation and will not be recovered in the current year,” the company said in a statement to the NZ Stock Exchange.

“Tower therefore expects the additional costs to impact its net profit after tax for the year ending September 30.”

The company has also warned it will pass these costs onto customers with a rise in premiums expected in the future.