Tower Australia will raise $96 million in new capital to fund new buying opportunities after the life insurance specialist booked a 5% rise in first-half net profit.

It earned $28.4 million in the first half as strong growth in life insurance sales outpaced rising exposure to claims.

Inforce premium grew 33% to $946 million offsetting the rising cost of claims, which at $123.2 million exceeded first-half expectations by $6 million.

MD Jim Minto says more Australians are becoming aware of the value of life insurance as the market continues to grow at more than 10% per year.

“Pleasingly, more people are recognising the value life solutions bring to them in helping manage personal risks,” he said.

The insurer will raise $96 million in capital through a one-for-seven renounceable pro-rata share entitlement issue offer to existing shareholders.

Chairman Rob Thomas says opportunities have arisen for Tower following strong growth in the sector in addition to changes brought about by consolidation and regulation.

“We want to strengthen our capital base and increase flexibility to position ourselves to take advantage of any opportunities which may arise,” he said.