Tower has reinsurance cover but this only kicks in once costs rise to over $20m in any given year. It is covered up to $40m.
"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 November last year Tower brought in risk-based pricing for floods. So far it had transitioned 70,000 customers to the new pricing model, Turnbull said.
Tower's gross written premiums rose from $194.6m to $216.1m while its net earned premiums rose from $167.8m to $173.7m.
The insurer increased its customers by 6 per cent to 312,000 and saw its management expense ratio fall from 37.1 per cent to 35.8 per cent.
Turnbull said its operational business performance had improved over the half-year through growth, improved efficiencies and effective management of inflationary pressures.
"By building deeper, more engaging relationships with customers Tower is experiencing consistent growth in both premium and customer numbers year-on-year."
Tower maintained its full-year guidance of between $21m and $25m underlying net profit.
It declared a half-year dividend of 2.5 cents per share.
Tower shares are down 10.2 per cent over the last year and closed at 68.5c on Wednesday.