Tower forges five-year insurance partnership with Kiwibank

Tower forges five-year insurance partnership with Kiwibank | Insurance Business New Zealand

Insurance News

Tower forges five-year insurance partnership with Kiwibank

Collaboration expands home insurance portfolio

Insurance News

By
Roxanne Libatique

Tower Limited has entered a five-year referral agreement with Kiwibank to provide general insurance products to the bank’s retail customers.

Under this agreement, Kiwibank customers will insure their assets directly with Tower through policies branded by the insurance company.

“We’re thrilled about the opportunity to welcome Kiwibank customers to Tower and to be joining forces with another Kiwi born and bred business,” he said. “This referral agreement presents a strategic opportunity for Tower and aligns with our focus on growing our home insurance portfolio.”

“We’re excited about entering this new partnership with Tower and to be able to support our customers to have the right protection in place which goes to the heart of our purpose of Kiwi making Kiwi better off,” said Kiwibank chief executive Steve Jurkovich.

Tower already has referral agreements with several New Zealand organisations, such as the Kiwi Adviser Network, New Zealand Financial Services Group, and Trade Me.

No regulatory approvals are required for the agreement to proceed.

The insurer reported an underlying net profit after tax (NPAT) of NZ$36.6 million and a reported profit of NZ$36 million. This is a marked improvement from the NZ$5.1 million loss recorded in the same period last year, which was impacted by catastrophic events.

Key financial highlights for HY24 include:

A 20% year-on-year increase in gross written premium (GWP) to NZ$291 million
A reduction in the business-as-usual claims ratio to 49.7%, down from 51.1% in HY23
A decrease in the management expense ratio (MER) to 31.3%, from 35.0% in HY23
large event costs were -NZ$1.9 million, compared to NZ$37.3 million in HY23, due to a favourable revision of Vanuatu cyclone claims
customer numbers fell by 1% to 309,000, partly due to a stricter risk appetite for high-theft motor vehicle models
the combined operating ratio (COR), including large events, was 80.2%, down from 104.5% in HY23
an interim dividend of 3 cents per share was declared

The improvement in the business-as-usual claims ratio was attributed to enhanced processes, a reduction in motor theft claims due to targeted underwriting actions, and calmer weather conditions, leading to fewer house claims.