Tuesday 17th September 2013
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Tower, the general insurer that is 34 percent owned by Guinness Peat Group, says it will return an initial $70 million of capital to shareholders from the sale of its life insurance business.
The insurer sold its life business to Fidelity Life Assurance for about $145 million in cash and liabilities in May though in determining what capital was available had to take into account the Reserve Bank's requirements for its insurance licences, including an increase in its minimum solvency margins. In August, Tower said it had concluded talks with the central bank.
"We continue to review our capital management plan following the issue of full licences for our general insurance and retained life insurance businesses," said chief executive David Hancock, in a statement.
"With minimum solvency margin requirements now confirmed, it was appropriate that some capital realised from the execution of Tower's strategic review, and which was surplus to capital and business requirements, was returned to shareholders," he said.
The company remains committed to returning a total of $114.5 million, he said. Asset sales have released $370 million of capital, of which $120 million has already been distributed. GPG stands to get about $24 million from the life business sale.
Shares of Tower rose 1.1 percent to $1.83 and have declined about 6 percent this year.
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