Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Tower 1H profit rises 83% as quake, liability costs fall

Tower boosts 1H profit 83% as quake, policy liability costs subside, lifts interim dividend

By Paul McBeth

May 25 (BusinessDesk) - Tower, the insurance firm controlled by Guinness Peat Group, boosted first-half profit 83 percent after the costs associated with the Canterbury earthquakes and policy contract liabilities fell, letting the company lift its dividend.

Profit rose to $23.6 million, or 8.87 cents per share, in the six months ended March 31, from $12.9 million, or 4.88 cents per share, a year earlier, the Auckland-based company said in a statement. Tower's policy liabilities dropped to $671,000 in the period from $8.4 million a year earlier, while revenue climbed 14 percent to $295.7 million.

The board declared a first-half unimputed dividend of 5 cents per share, or $13.3 million, from 4 cents per share a year earlier.

"The group is back on track after the negative impact of the Christchurch earthquakes and challenging economic conditions which combined to create a difficult operating environment," managing director Rob Flannagan said. "Our priority was to focus on getting the basics right through achieving higher revenue growth while maintaining a disciplined approach to costs."

Earlier this year the insurer flagged a capital return to shareholders after it was outbid by Insurance Australia Group in its pursuit of AMI Insurance, which was bailed out by the government.

Tower said it's undertaking a strategic review of its business segments to add value to shareholders, which may result in "partnerships, merger opportunities, acquisitions, divestments and/or a return to capital." GPG's one third-stake in Tower is also in play as the investment company winds itself down.

Tower shares slipped 0.6 percent to $1.62 in trading yesterday, and have gained 7.8 percent this year. The stock is rated an average 'outperform' in a Reuters consensus of analysts, with a median target price of $1.70.

The firm's performance improved across all segments, with health insurance profit rising 4.9 percent to $6.5 million. General insurance earnings rose 18 percent to $5.4 million, and investments climbed 18 percent to $3.6 million. Its life insurance unit's profit almost doubled to $12.4 million.

Tower booked a loss of $3.1 million in the latest six months from the Christchurch earthquakes, down from $7.5 million a year earlier. Last year it lifted premiums to pay for rising reinsurance costs.

The firm said reinsurers have "indicated a need to review policy terms and underwriting criteria to reduce risk in the region."

Tower's total funds under management, which includes KiwiSaver funds, grew $139 million to $4.12 billion from March last year.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Banking: Westpac NZ Lowers Merchant Fees For Small Businesses

Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers. On 1 September, most ... More>>

REINZ: Million Dollar Plus Property Sales Increase 11.7% Nationally

The number of properties sold around the country for one million dollars or more during the first half (H1) of 2020 increased by 11.7% compared to H1 2019, with 5,426 million-dollar plus properties sold (up from 4,858 in H1 2019) according to the Real ... More>>

Waste: Government To Regulate Plastic Packaging, Tyres, E-Waste

The Government is stepping up action to deal with environmentally harmful products – including plastic packaging, tyres and e-waste – before they become waste. As part of the wider plan to reduce the amount of rubbish ending up in landfills, ... More>>

ALSO:

Bankers Association: Banking Becomes First Living Wage Accredited Industry

Banking has become New Zealand’s first fully living wage accredited industry, leading to nearly 1800 employees and contractors moving onto the living wage and gaining greater economic independence for them and their families. As of today, all ... More>>

ALSO:

Economy: Funding For 85% Of NZ Not-For-Profit Entities Impacted By COVID-19

Results of a recent Institute of Directors poll show that 85% of board members on not-for-profit organisations say COVID-19 has moderately or significantly affected their funding. The ‘pulse check’ conducted in the first two weeks of July looked ... More>>

Volcano Detection: Eruption Alert System Would Have Given 16 Hours’ Warning At Whakaari

An alert system that could have given 16 hours’ warning of last year’s eruption at Whakaari/White Island is ready for deployment, University of Auckland scientists say, with warning systems for Ruapehu and Tongariro the next priority. ... More>>


Property: Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index. Trade Me Property spokesperson Aaron Clancy said ... More>>

Seismology: The Quiet Earth

As many daily activities came to a halt during lockdown, the Earth itself became quiet, probably quieter than it has been since humans developed the technology to listen in. Seismologists have analysed datasets from more than 300 international ... More>>

RNZ: James Shaw Says Kiwibank, Not Ministers Should Decide On Investors

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one. More>>

ALSO:

FMA: Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments

Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually ... More>>

FIRST Union: Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off

(FIRST Union comments on The Warehouse consultation and proposed restructure) 'Unfortunately the Warehouse have done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs ... More>>

ALSO:

Stats NZ: Mixed Performance By Regions Leaves National Emissions Picture Unchanged

Approximately two-thirds of New Zealand’s regions recorded decreases in their total greenhouse gas emissions, while one-third of regions saw increases between 2007 and 2018, Stats NZ said today. “While some regions reduced their emissions, ... More>>

RNZ: Economic Activity And Business Confidence Bouncing Back

Two surveys from ANZ show business confidence and economic activity have rebounded, but uncertainty about the future remains extreme. More>>

ALSO: