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Tower swings to H1 profit

New Zealand insurer Tower says it is “well positioned” after achieving a profit of $NZ36 million ($33.26 million) in the half-year to the end of March.

That compares with a loss of $NZ5.1 million ($4.71 million) a year earlier when record floods and Cyclone Gabrielle struck the North Island. Tower has now closed 97% of related claims.

There were no large event costs in the latest first half, compared with $NZ37.3 million ($34.46 million) a year earlier.

“Tower has delivered a strong result this half,” CEO Blair Turnbull said. “The business is well positioned to deliver sustained premium growth through innovating our products and services and improved efficiencies.”

Tower is forecasting full-year net profit of more than $NZ35 million ($32.34 million) and gross written premium growth of 10-15%. Tower’s combined operating ratio is now 80.2% and it lifted its full-year forecast to sub-93%, from an earlier range of 95%-97%.

In the first half, the business-as-usual claims ratio improved to 49.7% from 51.1% on reduced house claim frequency and lower motor theft claims following a tightened risk appetite for high-theft vehicle models.

GWP rose 20% to $NZ291 million ($268.89 million) on rating increases designed to mitigate inflation, crime and increased reinsurance costs.

Tower says its Suva hub is now answering half of all New Zealand customer calls, and this year's large events allowance of $NZ45 million ($41.58 million) remains unused.