NZ financial group Tower says the business is now back on track after posting a 28.8% lift in half-year profit on reduced claims and steady investment income.

Claims in both the Health & Life and General Insurance divisions fell for six months to March 31 as the group lodged an interim net profit after tax of $NZ27.7 million ($22.2 million).

Tower MD Rob Flannagan told insuranceNEWS.com.au the result is “clean”, saying there are few one-off losses or gains that would skew its financials.

He says the insurer enjoyed a favourable claims period, largely due to benign weather.

“I think it’s been a pretty robust result,” he told insuranceNEWS.com.au.

Profits in Tower’s insurance operations soared 26.6% to $NZ11.9 million ($9.5 million), despite a $NZ8.9 million ($7.13 million) fall in net premiums to $NZ90.8 million ($72.7 million).

Claims fell by nearly $NZ7 million ($5.6 million), but rose slightly in Health & Life, up $NZ4.6 million ($3.7 million) to $NZ75.6 million ($60.5 million).

Mr Flannagan says cost-cutting has been a significant contributor to the result.

“The bottom line result is very robust and reflects Tower’s ongoing steady progress against the backdrop of a difficult economy,” he said.

“Throughout the past year we’ve aggressively focused on achieving cost efficiencies and improving customer services… and on proactively managing assets in the investment business.”

Health & Life suffered a $NZ12.7 million ($10.2 million) tax expense on policyholders to post a slight fall in net profit to $NZ17.3 million ($13.85 million), down 8.5%. Premiums rose 3.6% in the half to $NZ99.4 million ($79.6 million).