A lack of catastrophic events helped Tower Insurance’s profits soar in its 2024 financial year, with the company’s insurance premiums also climbing to almost $600 million.
The company’s Chief Executive says he expects insurance premiums to “stablise further” as inflation in New Zealand continues to ease.
The general insurer reported gross written premium (GWP) jumped to $595 million in the September year, up 15% from the $527 million in GWP that the insurer reported in the 2023-year. GWP is the total amount of premiums collected.
“We recognise the impact of premium increases for customers. As inflation settled later in the financial year we moved to moderate premium increases, particularly for low-risk assets. With inflation now easing, we expect premium increases to stabilise further,” Chief Executive Blair Turnbull said.
Tower’s annual underlying net profit after tax (NPAT) rose to $83.5 million, a complete reversal from underlying profit levels in 2023. That's up from $7.6m in its 2023 financial year after the Auckland floods and Cyclone Gabrielle took a chunk out of the insurer’s bottom line.
More than half the insurer’s NPAT in the 2024-year came from its large events allowance of $45 million, which went unused due to the lack of natural disasters. The unused allowance increased underlying NPAT by $32 million after tax.
Tower’s underlying profit in the 2024-year increased by 998% compared to 2023 levels. The general insurer, which is listed on the NZX, updated the market five times with higher earnings guidance throughout 2024.
Tower said it has now closed 99% of both the Auckland Anniversary and Cyclone Gabrielle catastrophe event claims received in the 2023-year.
“This strong result is underpinned by our strategy of delivering simple and rewarding customer experiences combined with our use of digital technology and data,” Turnbull said.
Reported profit came to $74.3 million in the 2024-year which was also a massive turnaround from the $1 million reported profit loss Tower experienced last year.
Tower said year-on-year improvements in business-as-usual (BAU) claims performance and operational and digital efficiencies had also contributed to its strong results.
The BAU claims ratio was at 48.1% compared to 55% the 2023-year.
Tower said its board has conditionally approved a return of $45 million of excess capital to shareholders via a mandatory share buyback.
Tower’s board also declared a final dividend of 6.5 cents per share, bringing the total dividend for its 2024 financial year to 9.5 cents per share.
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