Tower CEO Richard Harding will leave the Auckland-based insurer and return to Australia toward the end of next year after deciding not to extend his contract past its current term.

“He has decided to return to Australia to be with his family after commuting for some time,” Tower said in a statement today.

“As a result, Tower’s board has started a full domestic and international search for a new CEO, as well as considering internal applicants.”

Tower is New Zealand’s third-largest general insurer after Australian-owned IAG and Suncorp. An attempt by Suncorp subsidiary Vero NZ in 2017 to acquire Tower for $NZ236.1 million ($212.5 million) was blocked by the New Zealand Commerce Commission.

Mr Harding, who joined Tower in 2015, previously led the Darwin-based Territory Insurance Office and held positions with IAG including head of China and head of strategy and mergers and acquisitions.

Tower reported net profit of $NZ16.8 million ($16.1 million) for the past financial year, returning to the black after climbing from a loss of $NZ21.5 million ($20.6 million) three years ago as it battled the impact of the Canterbury earthquakes.

Mr Harding says it is timely to signal his departure now as the company introduces a new platform operating model as part of a move to greater digitisation.

Customer migration to the new platform is set to be completed by next December, paving the way for legacy systems to be decommissioned.

Tower Chairman Michael Stiassny says Mr Harding has led a transformation that changed Tower from a traditional insurer to one that is increasingly profitable and based on technology. The board will be looking for a CEO who can continue to drive that shift, he says.

“We have fixed the foundations of the business and will be using digital to challenge the New Zealand market, grow the business and deliver shareholder value, and the new CEO will focus on delivering these benefits.”

Tower also announced today that CIO Peter Muggleston will take up a new role as COO, providing executive oversight for Tower’s claims, underwriting, Pacific and IT business units.