Wednesday 24th November 2021
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Kiwi insurer, Tower Limited (NZX/ASX:TWR) has today reported full year profit of $19.3m, up 72% from $11.2m at the full year 2020. Underlying profit including large events was $20.8m, compared to $28.4m in the prior year.
The Board has declared a final dividend of 2.5 cents per share, bringing total dividends for FY21 to 5 cents per share. As at 30 September Tower New Zealand Parent’s solvency ratio was 271% and the company was holding $56.6m above its target solvency margin. Considering current opportunities and the company’s capital position, the Board has proposed the return of $30.4m excess capital to shareholders by way of a compulsory share buyback.
Tower CEO Blair Turnbull said the full year result reflected challenging external factors first signalled at the half year. These included an increase in large events and large house claims, Covidrelated claims costs inflation, and lower investment income.
“Tower has navigated a difficult year. Our focus has been on addressing a range of external challenges, while supporting our customers and delivering on our technology and distribution growth strategies,” said Mr Turnbull.
FY21 large events comprised a $13.9m impact up from $9.7m in the prior year and included the large fire at Lake Ōhau and severe floods in Napier in late 2020, and Westport flooding in July. The frequency of large house claims, predominantly driven by house fires, continued to increase in the second half rising 61% over the year to 92, totaling approximately $21.1m. Inflationary pressures also continued to challenge claims costs which increased $17.1m in total to $166.8m, while net investment income reduced by $5.1m to $0.2m for the year.
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