Tower raises profit guidance, lowers premium growth

Tower has revised its underlying net profit after tax (NPAT) guidance for the year ending Sept 30, 2025.

The Kiwi insurer now expects underlying NPAT to be in the range of $70 million to $80m, up from the previous range of $60m to $70m.

This revision assumes the full utilisation of the $50m large events allowance.

Tower said it has already recorded one large event, the Dunedin flooding in October, which had an estimated cost of $3m.

The company is currently supporting customers affected by the storms that impacted New Zealand over the Easter weekend and has received nearly 250 claims.

Tower said this storm may exceed the $2m threshold for a large event.

The upward revision of underlying NPAT guidance was attributed to better-than-expected business-as-usual claims performance, which Tower said was due to favourable weather, a lower inflationary environment, fewer total loss house claims, and enhanced risk selection.

However, the company revised its guidance for gross written premiums (GWP) to mid-single digit growth, down from the previous range of 7% to 12%.

Tower said the reduction in average premiums, resulting from a higher proportion of lower-risk new house insurance and motor policies, as well as more competitive pricing in the NZ market, contributed to the lower-than-expected GWP growth.