New Zealand insurer Tower says its annual large event costs reached $NZ55.6 million ($51.34 million), up from $NZ19 million ($17.54 million) a year earlier. 

CEO Blair Turnbull says Tower navigated catastrophic weather events, widespread inflation and increasing crime in the year to September, when the combined operating ratio including large events worsened to 101%, from 90.1% a year earlier. 

Tower is forecasting a combined operating ratio of 95-97% this financial year, underlying net profit of $NZ22-27 million ($20.31- 24.93 million), and gross written premium (GWP) growth of 10-15%. 

“While we have certainly faced significant challenges this financial year, our underlying result demonstrates resilience,” Mr Turnbull said. 

In the year to September 30, Tower recorded an underlying profit including large events of $NZ7.6 million ($7.01 million), versus $NZ27.3 million ($25.21 million) a year earlier. GWP rose 17% to $NZ527 million ($486.65 million). 

Inflation and a higher frequency of motor claims contributed to a rise in the business as usual claims ratio to 55.5%, from 48.9% in 2022. Tower says it is continuing to apply targeted rating and underwriting actions to address this. 

A reported loss of $NZ1.2 million ($1.1 million) includes strengthening of the residual Canterbury earthquake and remediation provisions. Tower will not pay a full-year dividend. 

Around 84% of Tower claims for the Auckland and Upper North Island weather event and Cyclone Gabrielle are completed, and 88% for Cyclones Judy and Kevin in Vanuatu. 

Tower says it is moving workflows to its operational hub in Suva where its team of 250 staff are delivering lower service costs.