Kiwi insurer Tower Limited (NZX/ASX:TWR) today announced underlying profit excluding large events increased 23% on the prior year to $34.7m, underlying profit including large events increased 3% on the prior year to $28.4 million, passing the top end of its guidance.
Tower’s reported profit of $12.3 million, includes the $9.5 million impact from the recently announced EQC settlement of $42.1 million. Tower will receive $42.1m after disbursement to reinsurers and cost which amounts to 76% of the gross carrying value listed in Tower’s accounts.
Tower’s investment in digital and data has helped the company grow GWP 8% to $385 million and increase customer numbers by 11% to 300,000.
Tower CEO Blair Turnbull, who joined the company in August 2020, says the company’s digital and data strategy is a game changer and is laying the groundwork to fundamentally transform how we deliver insurance in New Zealand and the Pacific.
"New Zealand and the South Pacific are beautiful locations, but there’s no doubt we face a few natural perils, like earthquakes and cyclones, which is why insurance is so important" says Turnbull.
"As an insurer it’s our job to help get customers back on their feet and the recent flooding in Napier and fires in Lake Ōhau demonstrate the importance of the role we play in communities. But we want to do more than just help customers when they need to claim, we want to support them to avoid accidents.
"We have a significant amount of data and we’re investing in innovations that will help customers understand risk, create safer driving habits and get customers to see insurance as a valued part of their life."
Turnbull says that as well as deepening customer relationships, digitisation will continue simplifying insurance and deliver efficiencies.
"Digitisation allows Tower to reach customers in new and exciting ways. As a result of our simplified online processes, two-thirds of new business is now coming through online channels and close to half of all claims are being logged online. Less than a year ago we launched MyTower, a fully online sales and service portal, and since then we’ve had over 50,000 people register. It’s this type of innovation that will set us apart," says Turnbull.
"To help accelerate our digital and data progress, we’ve entered new partnerships with the likes of the University of Auckland’s Science Faculty, Ushur in the US, Amodo in Croatia, as well as existing partners such as Corelogic.
"Digital and data also allows us to reduce our operating ratios, by giving us the tools and insights we need to manage our claims expenses closely. Tower improved its loss ratio from 48% to 46% in FY20 which demonstrates our ability to grow the business while managing claims effectively and without a significant increase in our cost base.
"Following the recent settlement with the EQC, our strong capital base has been further strengthened and we are well placed to accelerate. Our competitors should be left in no doubt that we are here to compete and show Kiwis they can expect more from their insurer."