Long-serving MD Rob Flannagan is to leave Tower Group, after telling last week’s annual general meeting the company is well positioned for organic growth.

Mr Flannagan, who has led the New Zealand insurer for seven years, told insuranceNEWS.com.au he would have left earlier but was committed to overseeing the group’s strategic review, which has led to the sale of its health and investment businesses in the past year.

Shareholders were given few details of Tower’s direction following the review. Some criticised the asset sales and asked about market speculation the life insurance business will be the next unit to be sold.

They were told no offer has been received.

Mr Flannagan must give 12 months’ notice but says he will leave when a replacement is found. He has no particular plans but is interested in directorships.

A question hangs over Tower’s ownership, with investment company Guinness Peat Group keen to sell its 33.6% shareholding. 

Under New Zealand law, anyone acquiring more than 20% would have to make a takeover bid or seek an exemption.

Mr Flannagan says Tower has closed more than 60% of its Christchurch earthquake claims and paid out more than $NZ255 million ($203 million).

COO Michael Boggs told the AGM earthquake payments have been fully covered by reinsurance and Tower expects to pay out more than $NZ450 million ($345.6 million) this year.

He says general insurance made a $NZ13.2 million ($10.5 million) profit last calendar year and the underlying business continues to grow.

Life insurance made a $NZ23.7 million ($18.9 million) profit, and premiums have maintained growth.

But Mr Boggs says claims “are proving a challenge this year” and positive growth is being offset by claims experience and volatility in investment returns.

Cyclone Evan, which struck some Pacific islands in December, will cause $NZ4 million ($3.19 million) of losses to Tower’s Fiji and Samoa operations, and a high number of small claims in the life business mean fewer claims have been recoverable from reinsurers.

Chartered accountant and barrister Michael Stiassny – a partner in corporate advisory firm KordaMentha – is Tower’s new Chairman.

Outgoing interim chairman Steve Smith says Tower sold its health business to Nib Holdings last year because it could not achieve the scale or return it needed. It sold the investments business in February because significant investment was needed to increase its value.

The board began the strategic review last year to increase Tower’s share value. Last week it announced a $NZ120 million ($95.6 million) capital return to shareholders.