Tower may outperform expectations this financial year after strong trading results in the first four months, the New Zealand insurer says.

The business is targeting $NZ22-$NZ27 million ($20-$25 million) in underlying net profit after tax for the year to September 30, a combined operating ratio of 95-97% and gross written premium (GWP) growth of 10-15%.

It says full-year underlying net profit after tax “is expected to be at the upper end of or exceed” the guidance.

“This assumes full utilisation of a large events allowance, which has conservatively been set at $NZ45 million ($42 million). No large events were recorded in the four-month period.”

In the October-January period, Tower had “positive GWP growth and a better than expected claims performance as the frequency of motor claims has begun to normalise. Accordingly, Tower expects it will be at the top end or exceed its gross written premium and combined operating ratio guidance ranges over the [financial] year.”

Tower will provide further details on its performance at its annual shareholder meeting on Wednesday.