New Zealand insurer Tower has reported an $NZ8 million ($7.3 million) loss for last financial year, as the Canterbury earthquake legacy continued to hit results and more recent natural disasters took a toll.

The company, which was to be acquired by Suncorp before the Commerce Commission blocked the deal, has also announced a $NZ70.8 million ($64.2 million) capital raising.

“That capital will provide Tower with a strong, durable base to appropriately manage risk and give confidence that the legacy of Canterbury is adequately provided for,” Chairman Michael Stiassny said. “It will also enable the acceleration of Tower’s transformation through investment in IT and digital.”

Tower’s net loss narrowed from $NZ21.5 million ($19.5 million) the previous financial year, while gross written premium increased 3% to $NZ312.4 million ($283.2 million).

“In the past 12 months we have grown our business, reduced management expense and contained claims costs, despite experiencing the highest number of natural event losses in more than 25 years, excluding the Canterbury quakes,” CEO Richard Harding said.

A $NZ1.6 million ($1.5 million) increase in second-half Canterbury provisions brought the full-year after-tax impact to $NZ11.4 million ($10.3 million), while a $NZ7.2 million ($6.5 million) additional risk margin was allocated for claims.

The Kaikoura quake last year caused a $NZ4.1 million ($3.7 million) after-tax impact.

Tower has selected tech group EIS to complete scoping and costing for an IT simplification program that will reduce the number of core systems from four to one.

“The new build is forecast to take 12 months, following which new business will immediately go live on the new platform and migration of the legacy book can start,” the insurer says.