Kiwi insurer, Tower Limited (NZX/ASX:TWR), has today announced a half year profit of $11.9 million after tax, a $23.5 million improvement on the same period last year.
These results show that efforts to transform the company are paying off and have been delivered on the back of strong growth, a fairer approach to pricing and the company’s continued push to become a digital insurer.
Tower Chief Executive Richard Harding says the results reflect the dedication of Tower’s team who have been focussed on turning around New Zealand’s only listed general insurer.
"We’re on a mission to challenge the traditions and norms of a stale insurance industry and I’m pleased that it’s resonating with customers and our business is growing," says Harding.
"Our drive to become a digital insurer and our fairer approach to pricing has seen online sales increase significantly. Our market share is increasing as more New Zealanders choose Tower over the others.
"The momentum we’ve built in the business will be accelerated by next month’s launch of our new technology platform and digital offering.
Mr Harding said that the result is immensely pleasing, demonstrating the strength and opportunity that still exists in the business.
"After a number of years removing legacy issues and creating a solid platform for growth, we’re now well placed to take on the large, overseas-owned insurers.
"Our new digital offering, together with prioritising a great customer experience will see us continue challenging the market. Tower is providing customers a genuinely different, Kiwi option when it comes to insurance," says Harding.
Detailed features of Tower’s 2019 half year result:
-Reported half year profit
$11.9 million after-tax reported profit
$19.4 million after-tax underlying profit
$4.7 million after-tax impact from CEQ provision adjustments
Revised guidance for underlying NPAT in FY19 is expected to be in excess of $26m
-Strong growth achieved
Gross written premium in core NZ portfolio increased 8.9% on half year 2018
Growth of 9,383 risks in core NZ portfolio
-Improved claims ratio
Claims costs reduced to 44.5%, an 11 point decrease from 55.5% in half year 2018 thanks to improved pricing, underwriting and benign weather
-Management expense ratio stable
Management expense ratio maintained at 38.7% compared to 38.9% in half year 2018
-Major technology upgrade to begin phased launch in coming weeks
Full replacement of core platform with world-leading technology to launch, with new business to be on sale in coming weeks