Wednesday 26th May 2021
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Kiwi insurer, Tower Limited has today reported half year profit of $12m, down from $14.9m for the half year 2020. Underlying profit before large events was $18m, 5% lower than the prior year.
Positive growth and ongoing reduction in management expenses have been offset by several factors that Tower has taken decisive action to address. These include an increase in large events and large house claims, rising building costs, and lower investment income.
The large events comprise a $9.3m impact before tax, up from $2.8m in HY20, and included the large fire at Lake Ōhau village and severe flooding in Napier in late 2020.
Recognising increasing house claims cost and reducing investment income, Tower has revised its underlying net profit after tax FY21 guidance to a range of $25m to $27m, assuming large events of $9.7m.
Tower is well capitalised and confirmed its first dividend in five years
Tower confirmed a dividend of 2.5 cents to be paid on 14 July, reflecting resolving legacy issues and consistent growth. Under Tower’s dividend policy, the full year guidance would equate to an approximate full year dividend payment in the range of 5 cents to 5.5 cents per share.
As at 31 March Tower’s (New Zealand Parent) solvency ratio was 309% and the company was holding $97m above the regulatory solvency requirement.
Tower has signed an agreement with one of the world’s largest insurers, Allianz Partners to introduce new products including travel and pet insurance to our customers. This will support revenue growth and retention.
Tower also expanded its cover over the half to include growing markets such as electric vehicles, e-bikes and escooters and is digitising its online boat experience.
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