New Zealand insurer Tower has lifted its earnings guidance, saying claims performance has been stronger than expected since June.

Unseasonably benign weather and underwriting action to tackle vehicle theft costs have boosted profitability.

Tower now forecasts net profit of more than $NZ45 million ($41.12 million) for the year to September, up from an earlier forecast of more than $NZ40 million ($36.55 million).

Expected gross written premium growth of 10%-15% may also be exceeded, it says. First-half GWP grew 20% to $NZ291 million ($268.89 million) on rate rises to mitigate inflation, crime and increased reinsurance costs. The combined operating ratio was 80.2%.

“In a departure from recent norms, no large events have been recorded in the financial year to date. Any unused portion of the large events allowance at year end will increase underlying net profit to improve the full-year result,” the insurer said.

If no large events occur, underlying profit will increase by $NZ32 million ($29.24 million).

In the first half, Tower’s business-as-usual claims ratio improved to 49.7% from 51.1% on reduced house claims frequency and lower motor theft claims amid a tightened risk appetite for the most targeted car models.

Tower posted a loss of $NZ5.1 million ($4.71 million) in the 2023 financial year, when record floods and Cyclone Gabrielle struck the North Island.