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<h2>Tower Ltd</h2>
<h3>Focused on sustainable growth and earnings</h3>
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<p>Tower Limited is a New Zealand-based general insurance company. Tower’s insurance operations are focused on New Zealand and the Pacific region. The group offers car, home &amp; contents, business, travel and boat insurance. Over the last few years, Tower has resolved a number of legacy issues following the Christchurch earthquake, and also embarked on a strategic direction of digitalisation and simplification, including changes to its IT systems and legal structure. Tower recently acquired Youi NZ, Club Marine and ANZ Bank’s rights over a portfolio underwritten by Tower for $14m. TWR was well prepared for the impact of COVID in FY20 and in FY21 remains well capitalised (3x regulatory minimum at HY21) despite recent disaster-related claims and a reduction in FY21 guidance. Tower is focused on sustainable growth and earnings through enhanced insights from data to inform its digitisation agenda both in New Zealand and the Pacific region. The company is leveraging partnerships that allow the business to scale and further expand its product offering.</p>
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<p><strong>Business model</strong><br>Tower has a market share of approximately 9% of the New Zealand general insurance market and offers general insurance products in NZ. The company has repositioned over the last few years to become a cloud-based digital challenger brand in New Zealand. The transformation leaves the company with more efficient operations and the potential to substantially lift returns on capital. However loss rates in some classes combined with COVID impact and some weather events have been challenging headwinds in FY21.</p>
<p><strong>With growth come returns?</strong><br>In May 2021 the company reduced full year guidance due to higher frequency of large house claims (mostly fire), lower-than-expected investment returns, higher-than-expected large events and emerging inflation in claim costs. Severe floods on New Zealand’s West Coast have not caused the company to update guidance with the full year result due in November.</p>
<p><strong>Tower needs an improved track record but isn’t overvalued</strong><br>TWR competes directly with the larger listed general insurers with operations in Australia and New Zealand as well as the Australian operations of international groups and smaller fintech businesses. The Australian market has improved with premium growth in FY20 and 21 but remains competitive with smaller aggressive challenger brands. Two of these operate in New Zealand alongside TWR as do two major insurers. TWR is trading on a lower Price/Book Value than the three large companies at 0.81x versus IAG (2.04x), SUN (1.18x) and QBE (1.40x).</p>
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Tower Ltd
Focused on sustainable growth and earnings





Tower Limited is a New Zealand-based general insurance company. Tower’s insurance operations are focused on New Zealand and the Pacific region. The group offers car, home &amp; contents, business, travel and boat insurance. Over the last few years, Tower has resolved a number of legacy issues following the Christchurch earthquake, and also embarked on a strategic direction of digitalisation and simplification, including changes to its IT systems and legal structure. Tower recently acquired Youi NZ, Club Marine and ANZ Bank’s rights over a portfolio underwritten by Tower for $14m. TWR was well prepared for the impact of COVID in FY20 and in FY21 remains well capitalised (3x regulatory minimum at HY21) despite recent disaster-related claims and a reduction in FY21 guidance. Tower is focused on sustainable growth and earnings through enhanced insights from data to inform its digitisation agenda both in New Zealand and the Pacific region. The company is leveraging partnerships that allow the business to scale and further expand its product offering.





Business model Tower has a market share of approximately 9% of the New Zealand general insurance market and offers general insurance products in NZ. The company has repositioned over the last few years to become a cloud-based digital challenger brand in New Zealand. The transformation leaves the company with more efficient operations and the potential to substantially lift returns on capital. However loss rates in some classes combined with COVID impact and some weather events have been challenging headwinds in FY21.
With growth come returns? In May 2021 the company reduced full year guidance due to higher frequency of large house claims (mostly fire), lower-than-expected investment returns, higher-than-expected large events and emerging inflation in claim costs. Severe floods on New Zealand’s West Coast have not caused the company to update guidance with the full year result due in November.
Tower needs an improved track record but isn’t overvalued TWR competes directly with the larger listed general insurers with operations in Australia and New Zealand as well as the Australian operations of international groups and smaller fintech businesses. The Australian market has improved with premium growth in FY20 and 21 but remains competitive with smaller aggressive challenger brands. Two of these operate in New Zealand alongside TWR as do two major insurers. TWR is trading on a lower Price/Book Value than the three large companies at 0.81x versus IAG (2.04x), SUN (1.18x) and QBE (1.40x).













Tower Ltd: Focused on Sustainable Growth and Earnings

New Zealand

TOWER Limited provides risk insurance and wealth management products and services. The Company operates in general insurance, health & life insurance, and investments and funds management.

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Tower Ltd (TWR NZ)

Tower Ltd: Focused on Sustainable Growth and Earnings

Tower Ltd Focused on sustainable growth and earnings Tower Limited is a New Zealand-based general insurance company. Tower’s insurance...

Research as a Service (RaaS)

Tower Ltd: Focused on Sustainable Growth and Earnings

Tower Ltd Focused on sustainable growth and earnings Tower Limited is a New Zealand-based general insurance company. Tower’s insurance...

Research as a Service (RaaS)

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