Tower Insurance has affirmed its net profit after tax (NPAT) guidance of more than $22 million for FY19.
This guidance assumes a $10 million aggregate reinsurance excess for large weather events will be fully utilised, the insurer said in its latest business performance update. Four months ahead of its full-year results, Tower advised that its business performance in the four months to January 31 was in line with expectations. This included a 7.9% increase in gross written premium (GWP) of its core New Zealand book and a reduced claims ratio to 43.8% from 52.3% in FYI (excluding large loss events). It also reported continued progress in closing Canterbury claims, with claim numbers down to 138 from 168.
“These results demonstrate that the strategy, plan and team we have in place is delivering and the future looks bright,” Tower Insurance chief executive officer Richard Harding said. “The key enabler for our strategy is a technology platform that allows us to deliver something genuinely better to customers.
“This new technology will accelerate our momentum and deliver a step change in results,” he added.
Tower also announced that 70% of its technology build is now complete, including the development and build of phase one of a new platform. This progress includes the development of its new business platform, digital interface and a new telephone and customer communications system. It noted phase two has been pushed out to the second half of 2019, including the migration of all of its customers to the new platform and new products.
“As a result of phased implementation, risk associated with the delivery of the technology upgrade and migration of customers to the new platform has been reduced,” the insurer added. “Along with the extended scope, Tower currently estimates total costs to be higher than the board’s approved investment of $38.5 million, including contingency, at $45 million.”
