Tower Limited
Level 5, 136 Fanshawe Street
Auckland 1142, New Zealand
ARBN 645 941 028
Incorporated in New Zealand
Market Information onlyNZX Limited
Level 1, NZX Centre
11 Cable Street
Welli gton
New Zealand
Company Announcements Office
useASX Limited
Exchange Centre
Level 6, 20 Bridge Street
Sydney NSW 2000
A stralia
26 May, 2022
personal6 | NZX Distribution Notice |
Tower Limited Half Year 2022 Results Announcement
In accordance with NZX Listing Rule 3.5.1, please find enclosed the following for release to the market in relation to Tower Limited's (NZX/ASX: TWR) Half Year 2022 Results:
1 Media Release
2 Results Announcement
3 Interim Financial Statements (including Independent Auditor's Review
Report)
4 Results Announcement Presentation
5 Results Announcement Call Script
ForTowe 's Chairman Michael Stiassny, Chief Executive Officer, Blair Turnbull and Chief Financial Officer, Paul Johnston will discuss the half year results at 10.00am New Zealand time today.
For the purposes of ASX Listing Rule 1.15.3 Tower confirms that its primary listing is on the main board of the New Zealand Stock Exchange and Tower therefore continues to comply with the NZX Listing Rules.
ENDS
This announcement is authorised by Blair Turnbull, CEO, Tower Limited.
For media enquiries, please contact in the first instance:
Emily Davies
Head of Corporate Affairs and Sustainability
Tower Limited
Mobile: +64 021 815 149
Email: emily.davies@tower.co.nz
Level 5, 136 Fanshawe Street
Auckland 1142, New Zealand
ARBN 645 941 028
For personal use only
Market Information
NZX Limited
Level 1, NZX Centre
11 Cable Street
Wellington
New Zealand
Company Announcements Office
ASX Limited
Exchange Centre
Level 6, 20 Bridge Street
Sydney NSW 2000
Australia
26 May, 2022
Strong growth and efficiencies drive improved business performance
Tower maintains guidance and announces half-year dividend
Kiwi insurer, Tower Limited (NZX/ASX:TWR) has today reported half-year underlying profit excluding large events of $18.2m, up 6.4% from $17.1m at the half-year 2021. Reported profit including large events of $17.9m was $3m, compared to $11.1m in the prior year.
Summary of key results:
- Gross written premium (GWP) $216m, up 11% on HY21
- Customer numbers increased 6% to 312,000
- Management expense ratio (MER) improved to 35.8% vs 37.1% in HY21
- Large event costs $17.9m vs $9.3m in HY21
- Underlying net profit after tax (NPAT) excluding large events $18.2m vs $17.1m in HY21
- Underlying NPAT including large events $5.4m vs $10.4m in HY21
- Combined operating ratio (COR) 94.8%, increased 3.9%
- Reported profit including large events $3m vs $11.1m in HY21
Tower maintains its full year guidance of between $21m and $25m underlying NPAT and the Board announces a half-year dividend of 2.5 cents per share.
Strong business performance
Tower's operational business performance has improved over the half through positive growth, improved efficiencies and effective management of inflationary pressures.
Tower CEO, Blair Turnbull says, "By building deeper, more engaging relationships with customers Tower is experiencing consistent growth in both premium and customer numbers year-on-year. Our digitisation and distribution strategy focused on simple and rewarding customer experiences has seen us welcome another 18,000 customers to Tower and increase GWP by 11% to $216m."
Disciplined cost control and improved efficiencies through increasing scale saw Tower's overall MER improve to 35.8% versus 37.1% in HY21. Supporting these improvements was Tower's investment in digitising its Pacific business where MER dropped 5% compared to HY21.
Level 5, 136 Fanshawe Street
Auckland 1142, New Zealand
ARBN 645 941 028
For personal use only
The decisive actions taken last year to address claims inflation are also delivering results with Tower's BAU loss ratio being brought back to a more normal level of 48.6%, after reaching 52.1% in the second half of the FY21 year.
Turnbull says, "Tower is continuing to leverage our unique direct model and scalable technology platform to provide simpler and easier experiences for customers along with efficiencies for the business."
Tower's transformed Partnerships business contributed to commission payments nearly halving year-on-year to 2.3% of gross earned premium.
Mitigating climate-related and other large events volatility
Large event costs over the half-year were substantial, totalling $17.9m, up from $9.3m in the prior year. This includes $7.6m from the eruption of Tonga's Hunga Tonga-Hunga Ha'apai volcano and subsequent tsunami in January; $3.6m from February's Cyclone Dovi in New Zealand; and $6.7m from the significant rainstorms that swept through the North Island in March.
Tower's reinsurance programme has been designed to provide protection from the volatility of large event costs. Under these arrangements, Tower pays the first $20m of large event costs in the year (currently totalling $17.9m) and reinsurance covers the next $20m, up to $40m. Tower's catastrophe cover is triggered by a single event of over $11.25m.
Large event costs of $20m have also been planned for within the FY22 guidance range.
In November last year, Tower commenced risk-based pricing for flooding with the aim of assisting customers to better understand their risks from flooding while more accurately matching insurance pricing to risks. To date Tower has transitioned around 70,000 customers to this new pricing model as their house insurance policies have come up for renewal. Tower plans to add other climate-related risks to its ratings tool in the coming year including coastal inundation and erosion, and windstorms.
Turnbull says, "Tower is acutely aware of the ways climate change is increasingly affecting our communities. We are responding. By expanding our risk-based pricing policies and focusing on a high quality reinsurance programme, we ensure Tower remains in the strongest possible position to continue protecting both our customers' and shareholders' interests."
In the last 12 months Tower has returned $51m to shareholders through dividends and a capital return. As at 31 March, Tower New Zealand parent's solvency ratio was 210% after the declaration of an interim dividend, and Tower was holding $72.2m above its minimum solvency capital.
ENDS
This announcement has been authorised by Tower CEO, Blair Turnbull.
For media enquiries, please contact in the first instance:
Emily Davies
Head of Corporate Affairs and Reputation
Tower Limited
Mobile: +64 21 815 149
Email: emily.davies@tower.co.nz
Template
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 17 October 2019
only | ||||||||||
Results for announcement to the market | ||||||||||
Name of issuer | Tower Limited | |||||||||
Reporting Period | 6 months to 31 March 2022 | |||||||||
Previous Reporting Period | 6 months to 31 March 2021 | |||||||||
Currency | NZD | |||||||||
use | ||||||||||
Amount (000s) | Percentage change | |||||||||
Revenue from continuing | $214,130 | 5% | ||||||||
operations | ||||||||||
Total Revenue | $214,130 | 5% | ||||||||
Net profit/(loss) from | $2,930 | -72% | ||||||||
continuing operations | ||||||||||
personal | Total net profit/(loss) | $2,930 | -72% | |||||||
Interim/Final Dividend | ||||||||||
Amount per Quoted Equity | 2.5 cents | |||||||||
Security | ||||||||||
Imputed amount per Quoted | N/A | |||||||||
Equity Security | ||||||||||
Record Date | 16 June 2022 | |||||||||
Dividend Payment Date | 30 June 2022 | |||||||||
Current period | Prior comparable period | |||||||||
Net tangible assets per | $0.52 | $0.57 | ||||||||
Quoted Equity Security | ||||||||||
A brief explanation of any of | Revenues increased 5% year-on-year through a mix of premium | |||||||||
the figures above necessary | rating increases and attracting new customers to Tower, partly | |||||||||
to enable the figures to be | offset by lower investment revenue. | |||||||||
For | understood | Net profit decreased by 72% year-on-year, primarily due to the | ||||||||
impact of large storm events in New Zealand and the Tonga | ||||||||||
volcanic eruption on Tower's claims expenses, plus the impact | ||||||||||
of rising interest rates on Tower's investment portfolio. The | ||||||||||
comparative period has been restated due to the retrospective | ||||||||||
application of the change in accounting policy for software-as-a- | ||||||||||
service assets. | ||||||||||
Please refer to the 2022 half year results presentation for further | ||||||||||
information. | ||||||||||
For personal use only
Authority for this announcement | |
Name of person authorised | Tania Pearson. Company Secretary |
to make this announcement | |
Contact person for this | Emily Davies, Head of Corporate Affairs and Reputation |
announcement | |
Contact phone number | +64 21 815 149 |
Contact email address | emily.davies@tower.co.nz |
Date of release through MAP | 26 May 2022 |
Unaudited financial statements accompany this announcement.
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Tower Limited published this content on 25 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 May 2022 05:24:41 UTC.