New Zealand insurer Tower is undertaking a strategic review of its ownership structure to optimise its capital structure and explore market competitiveness options. 

US private equity firm Bain Capital owns a 20% stake in the insurer, bought in March 2018 from Suncorp brand Vero for $NZ53.9 million ($50.2 million). 

Tower Chairman Michael Stiassny says a thorough examination of the ownership structure is “prudent at this time,” and Goldman Sachs New Zealand has been appointed financial adviser. 

“This strategic review will enable us to explore options that align with our objectives and position us for continued success in the marketplace,” Mr Stiassny said, reassuring “business operations will continue as usual during the review process”. 

The strategic review is expected to take several months, and no decisions will be made regarding any transaction or other outcome until it is complete. 

Tower shares traded at NZ60 cents on Monday. Bain paid NZ80 cents a share after Suncorp’s $NZ236 million ($220 million) or $NZ1.40 a share takeover bid was rejected by the Commerce Commission. 

Canadian insurer Fairfax had previously also looked at purchasing the group. 

Tower shares are down 18% so far this year as North Island floods and Cyclone Gabrielle saw its annual large event costs reach $NZ55.6 million ($51.34 million), and its combined operating ratio hit 101%, from 90.1% a year earlier. It posted an underlying profit of $NZ7.6 million ($7.01 million) in the year to September. 

Tower is forecasting a combined operating ratio of 95-97% this financial year, and underlying net profit of $NZ22-27 million ($20.31- 24.93 million).