New Zealand insurer Tower has raised its profit guidance for the year to September to $NZ60-$NZ70 million ($54.17-$63.2 million).

It says it performed well in the October-December period and there are “positive early indications from January’s performance”.  

It had previously forecast $NZ50-$NZ60 million ($45.15-$54.18 million) annual profit. The guidance assumes full utilisation of a $NZ50 million large events allowance.  

Claims performance has been lifted by benign weather, easing inflation, fewer total-loss house claims and more careful risk selection, the insurer says.

The combined operating ratio forecast has improved to 84%-86%, compared with earlier guidance of 87%-89%.

The forecast for gross written premium growth has been reduced to 7%-12%, down from 10%-15%, due to a higher than expected proportion of lower-risk new house and motor policies, despite strong customer growth in recent months.

Tower has so far recorded one large event for this financial year, the Dunedin flood in October, which is estimated to cost $NZ3 million ($2.71 million).

The annual shareholder meeting will be held tomorrow.