Tower Australia Chairman Rob Thomas believes the insurer will able to meet any increased capital requirements proposed by the Australian Prudential Regulation Authority (APRA).

Speaking at the company’s AGM last week, he said the APRA review on capital adequacy might require Tower to raise more capital.

“We do not believe any significant increase is needed and we will endeavour to ensure that appropriate returns are priced on any additional capital required,” he said.

“We are hopeful that in any proposed changes, a sensible balance can be found that does not impose major new costs on consumers.”

Mr Thomas admits the year ahead will be “very interesting”.

“The shifting economic and regulatory environment will be with us for some time to come,” he said.

“The Government has flagged changes to the financial advice sector, and we continue to look at using technological advances to deliver better services and products to our customers and business partners.”

While proposed regulatory changes will affect Tower’s business, Mr Thomas says it will not stop the company’s growth.

“The local life insurance market continues to grow in excess of 10% each year,” he said.

“During the past five years, Tower has grown its inforce premium income in excess of the market to more than $1.2 billion, a compound annual growth rate of 15%.”

Mr Thomas says the company is ranked number three in the Australian life insurance market with a market share of 11%, providing life and income protection cover for more than 2.5 million Australians.

“We see Tower continuing to be a top-tier player in this market,” he said. “This will be achieved through organic growth and by taking advantage of opportunities as they arise in the external market.”

Tower is currently subject to a takeover offer by Japanese giant Dai-ichi Life. Shareholders will vote on the proposal before the end of the second quarter this year.