Tower CEO gives the lowdown on what’s behind upcoming financials
“We highlighted earlier this year that we’ve invested over $125 million in the technology, and that’s enabling us now to really support those customers and support deeper relationships. We’ve enriched the product suite, and all that has played through nicely into a premium and customer growth. And you can see that with the guidance update.”
According to Tower’s tweaked guidance, the company is anticipating $26 million in underlying net profit after tax (NPAT). The revised amount is higher than the originally expected underlying NPAT of somewhere between $21 million and $25 million.
“Certainly, in my two years at Tower, this is the first time we’ve done a guidance update,” noted the chief executive. “And that’s nice. And we expect this to continue in the future.”
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As for the insurer’s customer count – which Tower said grew 4% to 317,000 in the full year – Turnbull is pointing to what he believes is a unique proposition.
He told Insurance Business: “They like buying Tower insurance. I do think we’re offering something that’s different in the market. We’re obsessed with the customer experience. And as part of that, because we are in direct play (80% of Tower’s business is via the direct channel), we’re not paying commission loads. We do have a very competitively priced and targeted offer to customers.
“What I really do also like about the customer numbers is when we look at that and we unpick it, over half of our new business is from existing customers. So, we’re actually forming deeper relationships. And in this past year we’ve launched pet, we’ve launched travel, we’ve done construction cover, we’ve expanded our policies to cover EVs (electric vehicles) and e-bikes and the like.”
Among the differentiators cited by Turnbull is the company’s quote process.
“We don’t ask 50-odd questions like other insurers in the country; we only offer a fraction of those questions without degrading the risk side of the business,” he said. “That’s coming through to fruition in terms of the customer and premium growth, which is really, really pleasing.”
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For Turnbull, who has been at the helm since August 2020, it’s about being consistent and transparent.
The CEO declared: “A key thing for Tower is building consistency of earnings, and being transparent about how we are driving that through customer and premium growth, efficiency, and insurance fundamentals around how we do risk-based pricing… We’ve been on a journey, and it’s a good journey. We’re doing something that we believe is much more around a unique proposition around the customer.”
As for what’s ahead, Turnbull revealed where they’re setting their sights on, in addition to sustaining what’s been working for the business.
“[Moving forward], I think it’s going to be a continuation of what we’re doing,” said the Tower boss.
“As we look a little bit further forward, we do see opportunities in that smaller end of the commercial market. We would like to explore more and see how well some of those smaller businesses with just two or three employees have been supported on their insurance. I think we do see an opportunity to positively disrupt that like we’ve done on the personal line side.”
Historically a mutual association, Tower is a listed general insurance company currently owned by international, institutional, and about 30,000 individual shareholders. Headquartered in Auckland, it operates not only in New Zealand but also in Pacific Island countries – offering car, house, contents, boat, business, travel, pet, motorbike, rural, caravan, and motorhome insurance.
