New Zealand insurer Tower has begun a review of its business, which may lead to mergers, acquisitions, divestments or a capital return.

The company announced the review when releasing its half-year profit to March 31, which is up 83% to $NZ23.38 million ($18 million).

Tower says the review of the business segments aims to improve the company’s position in the market and enhance shareholder value.

MD Rob Flannagan says the group wants to double in size and was “hugely disappointed” to miss out on acquiring Christchurch-based AMI, which was bought by IAG.

Since the AMI acquisition bid fell through, Tower has come under pressure from shareholders and analysts on how it employs capital, and has appointed Goldman Sachs to consider growth opportunities. Mr Flannagan says there is no deadline for the review.

He told insuranceNEWS.com.au that as part of refreshing the business, two new directors have joined the board – Graham Stuart, the CEO of fishing company Sealord, and professional director Stephen Smith.

Mr Flannagan says the half-year result shows the group has recovered from the Christchurch earthquakes.

Tower’s general insurance business increased its profit by 17% to $NZ5.4 million ($4 million), despite incurring an additional $NZ4 million ($3.08 million) of catastrophe claims from the earthquake on December 23 last year.

The combined ratio from general insurance was 95% compared with 96% in the corresponding period last year.

Profit from life insurance rose from $NZ2.3 million ($1.78 million) to $NZ13 million ($10 million), reflecting increased investment income and a substantial decrease in policy liabilities.

Net profit from the health business rose 5% to $NZ6.8 million ($4.2 million).

Insurance premium revenue increased 7% to $NZ231 million ($178 million), but the higher cost of reinsurance post-Christchurch saw Tower’s reinsurance bill rise by 31% to $NZ29 million ($22 million).

Claims expense fell 68% to $NZ134 million ($103 million), a reflection of fewer claims.