New Zealand insurer Tower has reported a net profit after tax of $NZ44.2 million ($37 million) for the six months to March, up 87.3% on the previous corresponding period.

The sum includes a $NZ30.7 million ($25.7 million) net impact from one-off events, including the sale of its investments and health businesses.

Tower also sold most of its life business recently, so it can focus on general insurance. See earlier story

These gains were moderated by the impact of the Christchurch earthquakes and an IT systems writedown.

The general insurance business posted a profit after tax of $NZ5.9 million ($4.9 million) – before the impact of the quakes and revaluation of Australian liabilities; with these factors taken into account, the division reported a $NZ14.8 million ($12.4 million) loss.

This follows a $NZ5.4 million ($4.5 million) profit in the previous corresponding period.

The division recorded gross written premium of $NZ269 million ($225 million) and a 13.7% lapse rate. The combined ratio was 116%, compared with 95% in the previous corresponding period.

Net incurred claims were $NZ52.6 million ($44 million), with an extra $NZ3.3 million ($2.8 million) listed for “claims catastrophe” – claim events greater than $NZ1 million ($836,411) – referring to Cyclone Evan.

Tower says it has settled 64% of its 18,800 Christchurch earthquakes claims.

But it has revised its liabilities provision, because it continues to receive new claims when “under-cap” claims exceed the $NZ100,000 ($83,641) limit covered by the Earthquake Commission (EQC), after which they are passed to householders’ insurers.

Tower says claims settlement has slowed because of difficulty obtaining EQC data.

“Inflation in Christchurch is running at higher levels than originally provisioned,” it adds.

The company holds a 4.6% share of the total New Zealand market and 8.2% of the personal lines segment.

It plans to become more focused by reducing variations in policy terms across products, simplifying its product offering and restructuring to reduce costs.