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Tower boosts profit, faces year with optimism

Life insurer Tower Australia lifted net profit 40.8% to $68.7 million in the year to September 30 last year.

The result was achieved on higher revenue from 10% growth in insurance contracts of $712.8 million.

And MD Jim Minto is upbeat about the year ahead, saying tough times should work in the company’s favour.

“In difficult economic times people tend to become more aware of their protection needs and financial risks,” Mr Minto said in an address to Tower’s AGM last week.

“We believe the Australian life insurance market will continue to grow in 2009 driven by underinsurance and greater consumer awareness of their financial protection needs.”

Mr Minto says Tower Australia still has a relatively low level of debt, with a gearing ratio of 24.3% and interest cover of 7.9 times earnings.

Two representatives from Japan’s Dai-ichi Mutual Life Insurance Co have joined the Tower board following the purchase of a one-third stake in the company in October.