Tower NZ has collected close to $NZ20 million ($16.5 million) in claims following this month’s earthquake and tsunami in the Pacific Islands. But much of the cost will be met by reinsurance.

An 8-magnitude earthquake centred off Samoa on September 29 devastated parts of Samoa, American Samoa and Tonga, killing at least 178 people. Tower controls about 51% of the Samoan market through a 71% stake in National Pacific Insurance.

Tower MD Rob Flannagan says reinsurance arrangements will mitigate much of the company’s exposure, with total costs estimated at about $NZ5 million ($4.1 million). The after-tax imposition is expected to be around $NZ3.5 million ($2.9 million).

“While this has been devastating for our customers, Tower is in the business of insurance and the cost is part of our normal financial planning and expectations,” he said.

The company has forecast full-year results to the end of September 30 will remain in line with analysts’ expectations.