Kiwi insurer Tower has reported a net loss for the year ended September 30 2023, as the firm’s combined ratio deteriorated by more than 10 percentage points on the back of an elevated catastrophe loss experience.
For the year to 30 September 2023, the insurer recorded an underlying profit including large events of $7.8 million, down on the $27.3 million seen a year earlier, with a reported loss of $1.2 million versus profit of $18.9 million in FY22.
The reported loss for the period includes strengthening of the residual Canterbury earthquake and remediation provisions, partially offset by the sale of Tower’s Papua New Guinea subsidiary and its building in Suva.
For the year, large loss events cost the firm $55.6 million, up considerably on the $19 million reported a year earlier, as the combined ratio deteriorated to 101% from 90.1%.
The insurer’s gross written premium (GWP) increased by 17% to $527 million in FY23.
Tower says that its focus on efficient claims settlement has seen approximately 84% of claims for the Auckland and Upper North Island weather event and Cyclone Gabrielle, and 88% of claims for Cyclones Judy and Kevin in Vanuatu completed as of 20 November.
Back in May, Tower successfully placed additional reinsurance reinstatement cover for the remainder of the financial year ending 30 September 2023, to cover the increased estimate for the ultimate cost of February’s Auckland and Upper North Island Weather event.
In late September, the insurer completed the renewal of its reinsurance programme for the 2024 financial year, decreasing its catastrophe upper limit to $750 million.
Blair Turnbull, Tower’s Chief Executive Officer, commented, “In the financial year Tower has navigated catastrophic weather events, widespread inflation and increasing crime. At the same time, we are continuing to grow and manage expenses while executing on our strategy.”
Turnbull added: “In the year ahead, Tower will continue its focus on delivering targeted customer and premium growth while further improving efficiencies and continuing to streamline the business. We will also build on our leading risk-based pricing by expanding our model to include landslide and coastal hazards.
“While we have certainly faced significant challenges this financial year, our underlying result demonstrates resilience and strategic delivery which positions Tower well for long-term sustainable growth and performance.”
