Tower Insurance eyes up earnings lift as written premiums grow

Tower expects to report an improved result for the September year. Photo / File

Tower said it anticipates its underlying net profit after tax including big events to be about $26m, up from a range of $21m-$25m for the September 30 year.

The insurer said underlying net profit excluding large events ($14m after tax) was expected to be about $40m, above the previously advised range of $35.4m to $39.4m.

The profit boost followed a surge in gross written premiums (GWP), reflecting rate increases and organic growth from existing and new customers, the company said.

Tower said other factors were stronger retention, and disciplined management of claims and operating costs.

Unaudited GWP had increased 13 per cent to $457m during the 2022 financial year compared to the prior year and customer numbers grew 4 per cent to 317,000.

Tower's "reported" profit would be impacted by additional strengthening of its residual Canterbury earthquake provision, due to factors including inflationary impacts and receipt of new claims.

There would also be a one-off provision of about $3m after tax for customer remediation arising from an error in the calculation of multi-policy discounts, it said.

Tower said dividend guidance remained at 5.5c per share over the full year.

For the September 2021 year, Tower reported a net profit of $19.3m and underlying profit, including large events, of $20.8m.