New Zealand insurer Tower expects underlying net profit to be more than $NZ35 million ($32.11 million) this year.

The new guidance is up from early forecasts of $NZ22-$NZ27 million ($20.19- $22.94 million) for the year to September.

“The increased expectation ... follows lower than expected business as usual claims costs and higher than expected gross written premium from favourable retention,” Tower said. 

The insurer recorded an underlying profit including large events of $NZ7.6 million ($7.01 million) in fiscal 2023, and $NZ27.3 million ($25.21 million) a year earlier.

In February, it said it may outperform expectations this financial year after strong trading results in the first four months. In the October-January period, Tower had “positive gross written premium growth and a better than expected claims performance as the frequency of motor claims began to normalise”.

The updated guidance assumes full utilisation of this year’s large events allowance, which Tower says is "conservatively” set at $NZ45 million ($41.29 million). No large events have been recorded in the financial year to date.

Tower’s half-year October-March result will be presented on May 28.