Tower exits commercial farm business
New Zealand’s Tower will no longer offer insurance for commercial farms, and from February will refer those customers to Aon as Tower policies expire.
Tower’s commercial rural book comprises farms of more than 10 hectares with annual income of over $NZ10,000 ($9,194). The book generates gross written premium (GWP) of about $NZ9 million ($8.28 million) a year.
Tower says it will continue to insure lifestyle blocks, and the change comes as it focuses on its leading direct personal and small business lines insurance business.
“We look forward to developing a new digital offering for our lifestyle block customers in the coming year,” Tower CEO Blair Turnbull said.
The Aon agreement provides good value for Tower’s shareholders and gives commercial rural customers access to specialised Aon Agri solutions, he says. Agri New Zealand GM Jessica Hunt says dedicated teams are ready to provide advice and “access to advanced analytics to help them navigate increasing complexity to protect their business and assets”.
Tower will report its annual results on Thursday. It has forecast underlying net profit of between $NZ7 million-to-$NZ10 million ($6.54 million-to-$9.34 million), including large events costs estimated at $NZ38 million ($35.51 million).
Gross written premium rose 17% to $NZ526 million ($491.62 million) in the year to September, it says, on rating increases and strong customer retention.
Tower reported an underlying loss of $NZ3.3 million ($3.1 million) including large events costs for the six months to March. Last year, Tower’s underlying net profit was $NZ27.3 million ($25.3 million).