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Tower ready for new accounting standard 

New Zealand insurer Tower has adopted the new accounting standard IFRS 17 Insurance Contracts and the Reserve Bank’s Interim Solvency Standard.

CFO Paul Johnston says adoption of the standards is not expected to have a material impact on the business.

“Tower’s strategy, profitability and dividend policy remain unaffected by the new standards, although the presentation and disclosure of information in Tower’s financial statements ... will change,” he said.

The insurer says the release of its half-year results next week will mark the first interim reporting period under IFRS 17.

The standard is designed to enable better understanding of an insurer’s exposure, profitability and financial position, and to facilitate comparison across similar companies.

It replaces IFRS 4 and became mandatory for insurers from the start of the financial year beginning on or after January 1 last year.

The standard introduces a new metric, insurance revenue, that recognises the portion of premiums seen as income in the accounting period, reflecting coverage provided.

Gross written premium does not exist under IFRS17 but Tower says it will continue to be provided as part of its reporting to shareholders.

The insurer says adopting IFRS17 reduced its 2023 reported net loss by $NZ200,000 ($182,000) to $NZ1 million ($912,000).