Tower to stop covering commercial farms in 2024

Tower has announced a strategic shift in its insurance offerings, deciding to discontinue insurance services for commercial farms.

The firm revealed that it will be shifting on focusing on its core direct personal and small business lines while maintaining its insurance services for lifestyle blocks, according to a news release.

The change, which will take effect from Feb. 1, 2024, involves transitioning commercial rural clients to Aon New Zealand's AonAgri division. Tower's commercial rural portfolio primarily consists of farms larger than 10 hectares, generating a gross annual income exceeding $10,000. This segment has been contributing approximately $9 million per year in gross written premium (GWP) to Tower.

As part of this transition, Tower will refer its commercial farm customers to Aon as their existing Tower policies come to an end. Tower chief executive Blair Turnbull said that this decision aligns with the company's plan over the past three years to streamline operations and enhance efficiency.

“This change will help smooth the path to decommissioning our latest legacy technology system in New Zealand. We look forward to developing a new digital offering for our lifestyle block customers in the coming year,” Turnbull said.

He also expressed confidence that the agreement with Aon would serve the interests of both Tower's shareholders and its commercial rural customers. The partnership with AonAgri is expected to provide these customers with access to specialised insurance solutions.

Jessica Hunt, general manager of AonAgri New Zealand, welcomed the incoming clients and emphasised the commitment to support them, especially in navigating the complexities of protecting their businesses and assets.

“We believe that each client is an integral part of our wider New Zealand agriculture community, and our dedicated teams are ready to support them now and into the future. We are committed to providing our clients with advice and access to advanced analytics to help them navigate increasing complexities to protect their business and assets,” Hunt said.

Tower also assured its customers that any existing claims filed within the policy term would be processed as usual until their completion. The agreement with Aon also does not require regulatory approvals to be implemented.

In other company news, Tower also recently announced that it has appointed Mike Cutter as an independent director to its board to fill a casual vacancy.

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