Photo: RNZ / Dan Cook
Insurer Tower is back in the black with a first half profit of $36 million, though strong premium growth is expected to slow as reinsurance costs ease.
The company said it was back to a business-as-usual performance, with premium growth and operational and digital improvements, compared with a string of catastrophe events in year earlier period, resulting in a $5.1m loss in the six months ended March 2023,
Tower also saw revenue growth of 19 percent, reflecting a 20 percent improvement in gross written premiums (GWP), with an underlying profit of $36.6m.
It said it would pay shareholders an interim dividend of 3 cents a share.
"The business is well positioned to deliver sustained premium growth through innovating our products and services and improved efficiencies, and ultimately attractive long-term shareholder returns," chief executive Blair Turnbull said.
"We continually review premiums to ensure we provide good value and competitive prices for our customers, while ensuring that the premiums we collect cover the costs of the claims we pay out."
While customer numbers dropped slightly, Turnbull said the 1 percent drop reflected a drop in insurance for high-theft vehicles.
He expected full year underlying net profit $35m, with GWP growth of between 10 and 15 percent.
"Should inflation and the reinsurance market soften near the end of the year as we are currently expecting, then we'll see lower levels of premium increases coming through," Turnbull said.
Challenge to banks
Chair Michael Stiassny said insurers should not be the only parties to respond to the Reserve Bank's recent comments calling on insurers and banks to improve their understanding of natural hazards and to proactively manage affordability challenges.
"We couldn't agree more. The banks have been missing in action... Seemingly reluctant to actively embed climate-related risks in their business operations and risk management frameworks, but nevertheless content to continue making record profits," Stiassny said.
"I look forward to seeing how the banks choose to respond to RBNZ's challenge because insurers can't - and shouldn't - be shouldering the burden alone."