Tower has agreed to sell all of its shares in its Papua New Guinea subsidiary to Alpha Insurance Limited. The deal, which is expected to close within the year, is valued at AU$7.9 million (NZ$8.75 million), subject to settlement adjustments.
In the financial year ended Sept. 30, Tower Insurance (PNG) had gross written premiums of NZ$8.7 million and net profit after tax of NZ$900,000. As of Sept. 30, 2021, the company’s net assets were NZ$4.7 million.
Tower chief executive Blair Turnbull said the sale delivers good value to shareholders and will enable Tower to further streamline and modernise its business operations in the Pacific region. Tower also aims to complete the transitioning its Pacific business to its cloud-based technology platform by the end of this year.
“We remain committed to our Pacific operations in Tonga, Samoa, American Samoa, the Cook Islands, the Solomon Islands, Fiji and Vanuatu,” he said. “In reviewing our Pacific business, we identified that these seven territories offer the best alignment for progressing our digital strategy in terms of existing technology development, digital payments capabilities, and the balanced mix of commercial and personal lines customers.”
In December, Tower completed the acquisition of its subsidiary National Pacific Insurance Limited (NPI), which operates across Tonga, American Samoa and Samoa. Tower has begun the process of rebranding NPI to Tower.
“Our Papua New Guinea subsidiary has performed well and delivered solid results. We expect the company to continue to thrive under Alpha Insurance’s ownership,” Turnbull said.
After the sale’s completion Alpha Insurance will utilise Tower’s brand as it undertakes a three-month rebranding process. Tower will also provide transitional services to Alpha Insurance for up to six months after the transaction completes.
“We are looking forward to welcoming our new staff and customers to the Alpha Group and to our comprehensive range of insurance products,” said Bruce Avenell, Alpha Insurance managing director. “We know Tower has many long-term and loyal customers who are very important to us, and we look forward to continuing our relationship with them. Tower’s Papua New Guinea employees will also be warmly welcomed by the Alpha Group.”