Tower issues cross-appeal, assesses business performance

Tower issues cross-appeal, assesses business performance | Insurance Business New Zealand

Tower issues cross-appeal, assesses business performance
Tower Limited has advised that it has lodged its own cross-appeal against the Commerce Commission’s decision to decline Vero’s application to acquire the insurer.

Tower also announced a 392% growth in digital gross written premium to $7.7 million for the year ended in July, with TradeMe Insurance digital platform contributing a 150% increase in sales.

“Improvements in digital combined with new product offerings and a continued commitment to customer retention has seen Tower’s total policy numbers increase by 2.9%, contributing to New Zealand core GWP growth of 5.2%,” Tower Limited Chief Executive Officer Richard Harding said.

Its overall GWP growth across total New Zealand portfolio was up 3.6% from a year ago, while overall GWP across the Tower Group was up 1.9% for the year ended in July.

Claims costs for the New Zealand business, excluding large loss events, were up $1.9 million from the previous financial year.  This is partially offset by benign weather and fewer claims in the Pacific, resulting in Tower Group claims costs up by $1.1 million.

“New Zealand insurance industry has experienced one of the most severe natural disaster years in history,” Harding said. “Looking back at the last 25 years of loss events in Tower’s records, 2017 is the highest year of natural event losses, excluding the Canterbury quakes.”

Tower said it has closed 87% of EQC contents claims and 74% of EQC home claims that relate to Tower’s Kaikoura earthquake customers, with an after-tax impact of $6.1 million.

With regard to the Edgecumbe floods, Tower said, 78% of contents claims were settled and 35% of house claims were finalised, with an after-tax impact of $2.1 million.

More recent South Island winter storms in July left Tower with $1.2 million in claims after tax.

Harding said New Zealand motor insurance is experiencing an increase in claims frequency, which is further exacerbated by various constraints in the repair industry driving average costs higher. “These industry trends and other inflationary factors continue to negatively impact claims costs,” he said.

Related stories:
Speculation mounts over the future of Tower
Vero, Tower merger heads for High Court appeal