Tower has strong bounce-back into profit
· RNZInsurance company Tower has had a strong rebound back into profit as a lack of disaster claims, higher premium income, and cost control restored its fortunes.
Key numbers for the year ended September compared with a year ago:
- Net profit $74.3m vs $1m loss
- Underlying profit $83.5m vs $7.1m
- Gross written premium $595m vs $527m
- Final dividend 9.5 cents per share vs nil
The New Zealand-owned company benefited from a lack of large claims and planned to hand back $45m of excess money not needed for payouts through a mandatory buy back of shares.
Chief executive Blair Turnbull said the positive result also reflected its strategy to simplify the business and greater use digital processes.
"Continued improvements in claims performance, sustained GWP (gross written premium) growth and enhanced business efficiencies along with unusually benign weather in New Zealand and the Pacific, have delivered a positive result for shareholders."
The company also gained from higher premiums which had been raised to cover rising costs, crime and rising reinsurance costs, but Turnbull said the company was looking to limit price rises.
"As inflation settled later in the financial year we moved to moderate premium increases, particularly for low-risk assets. With inflation now easing, we expect premium increases to stabilise further."
The company forecast an underlying profit for the coming year between $50m-$60m, and has set aside $50m to cover any big disaster claims.
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