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Tower ends insurance products accord with ANZ National

Thursday 7th August 2008

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Tower, New Zealand's third-biggest fund manager for individual investors, ended a 15-year agreement to provide insurance products to ANZ Bank and National Bank because of underwriting losses.

The relationship will end on March 1, 2009, Tower group managing director Rob Flannagan said in a statement today.

The banking portfolio had grown to about NZ$70 million a year in annual premium revenue though revenue sharing arrangements "have resulted in Tower incurring an ongoing underwriting loss from the venture," it said.

The decision doesn't affect Tower's own customers, it said. The insurer and fund manager in May posted a 29% gain in first-half profit to NZ$20.2 million, excluding discontinued businesses.

Tower stock rose 1.9% to NZ$2.15 and has gained about 7% in the past month.

By Jonathan Underhill

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