A rising number of high priced housing claims and inflationary pressures has seen Tower's half year profit tumble.
Photo: RNZ / Dan Cook
The insurance company's net profit for the six months to March was down 20 percent on year ago to $11.5 million, as large one-off events including the Ōhau fire and Napier floods took a bite out of its margins.
Revenue for the period rose by 2 percent to $203.5m, as customer numbers and gross written premiums increased.
Tower chief executive Blair Turnbull said the frequency of large house claims, which total more than $50,000, had more than doubled to 52 totalling more than $9m.
The situation had not been helped by rising building costs, which had increased by 8 percent to $4620 per claim, he said.
"Tower's investments in technology mean we are well placed to respond rapidly with rating and underwriting actions to address these challenges."
He said the company had commenced a review of its claims to help manage increases in claim costs in the future.
Tower continues to invest in new products to improve its services for customers, after teaming up with the Australian financial services company, Open, to bring its Huddle insurance product to the New Zealand market.
Huddle uses artificial intelligence and customer's personal data to determine insurance prices.
It has also partnered with the global financial services giant Allianz to provide Covid-19 specific travel insurance.
Last year, the company launched its GoCarma mobile application which monitors people's driving habits. However, the app drew the ire of privacy experts.
The company reaffirmed its full-year profit guidance would be between $25m and $27m, after downgrading it from more than $29.8m earlier this month.
Tower announced it would be paying its first dividend in five years, of 2.5 cents per share.