Tower Limited · NZX:TWR
Tower — Shareholder Meeting (February 2024)
27 slides from Tower's shareholder meeting presentation, Feb 21, 2024
Slide 1: Tower Annual Shareholder Meeting
Tower Annual Shareholder Meeting 21 February, 2024
Slide 2: Questions
Questions Shareholder & Proxyholder Q&A Participation Written Questions: Questions may be submitted ahead of the meeting. If you have a question to submit during the live meeting, please select the Q&A tab on the right half of your screen at anytime. Type your question into the field and press submi
Slide 3: Voting process
Voting process Shareholder & Proxyholder Voting Once the voting has been opened, the resolutions and voting options will allow voting. To vote, simply click on the Vote tab, and select your voting direction from the options shown on the screen. You can vote for all resolutions at once or by each res
Slide 4: Agenda
Agenda Chairman’s address Michael Stiassny, Chairman CEO's address Blair Turnbull, Chief Executive Officer Shareholder resolutions Questions & general business Michael Stiassny, Chairman 4
Slide 5: Chairman's update
Chairman’s update Strong underwriting discipline, business performance and growth positions Tower well 1. Our place in the Pacific • 150 years in Fiji, supporting Pacific resilience • Delivering growth and opportunity 2. Insurance remains critical • Strong growth demonstrates people value insurance
Slide 6: CEO address
CEO address Blair Turnbull Chief Executive Officer 6
Slide 7: Tower's journey
Tower’s journey 2024 - 2026 BEST DIRECT, PERSONAL LINES INSURER Leading end to end customer 2022-2023 experience • One core digital platform FUNDAMENTALS & • 80% digital transactions RESILIENCE • Claims transformation completed 2020 - 2021 • Leading house proposition >50% digital transactions RESOLV
Slide 8: Our Purpose
Our Purpose To inspire, shape and protect the future the good of our customers and commt Our Vision Ta tatou kaupapa To deliver beautifully simple and rewarding experiences that our people and our customers rave about. Our Strategy To be the best direct insurer in our selected markets differentiated
Slide 9: FY23 performance
FY23 performance Business performance impacted by catastrophe events GWP growth BAU claims ratio MER 1 Customers (Gross written premium) (Business as usual) (Management expense ratio) 1 17% | $527m 321,000 55.5% 32.2% vs $457m in FY22 vs 310,000 in FY22 vs 48.9% in FY22 vs 36% in FY22 2 Large event
Slide 10: FY23: Targeted customer and premium growth
FY23: Targeted customer and premium growth GROSS WRITTEN PREMIUM BY PRODUCT($m) 1 • 17% GWP growth (75% rate: 25% volume) 1 • 19% GWP growth in NZ; 4% GWP growth in Pacific • 26% GWP growth in active partnerships to $82m • 77% NZ retention - stable vs FY22 • 50% of customers as at 30 September 2023
Slide 11: FY23: Customer experience improves through digital and data
FY23: Customer experience improves through digital and data NZ DIRECT SALES ONLINE • 55% online NPS; overall Tower 28% (FY22: 20%) • 12% abandonment rate; reduction from 17% in FY22 • 264k My Tower registrations; increased 32% • $6.2m payments made in multi-policy discount customer remediation (as a
Slide 12: FY23: BAU claims challenged by motor frequency and inflation
FY23: BAU claims challenged by motor frequency and inflation 1 2 • High inflation period and supply chain capacity constraints NZ MOTOR SEVERITY & FREQUENCY impacting cost of claims (severity) • NZ motor claims frequency above historical norms • Covid lockdowns lowered motor frequency in previous pe
Slide 13: FY23: Reducing MER through simplification and digitisation
FY23: Reducing MER through simplification and digitisation MANAGEMENT EXPENSE RATIO (% NEP) • Scale and efficiencies reduced MER • Increased digitisation lowered cost to acquire and serve • Operational efficiency: Suva hub answered 16% of total FY23 calls relating to NZ policies • Management expense
Slide 14: One year on
One year on • Continuing to support affected customers • Implementing customer facing sea surge and landslip risk ratings FY24 • Third event catastrophe reinsurance cover up to $75m in FY24 Auckland Anniversary Cyclone Gabrielle • 5,688 claims • 3,636 claims • $174m gross cost • $52m gross cost • $1
Slide 15: Four-month trading update
Four-month trading update For the four months to January 31, 2024
Slide 16: FY24 four-month trading update
FY24 four-month trading update Strong growth and cost control GWP growth Customers BAU claims ratio (Gross written premium) (Business as usual) 21% | $194m 319,000 54% vs $161m in Jan 2023 vs 315,000 in Jan 2023 vs 52% in Jan 2023 MER Large event costs Solvency position 1 (Management expense ratio)
Slide 17: FY24: Continued strong premium growth
FY24: Continued strong premium growth GROSS WRITTEN PREMIUM ($m) • 21% GWP growth vs same period prior year • 90:10 split of rate vs volume • 32% GWP growth in Partnerships channel • 28% GWP growth in NZ House portfolio G R O S S W R I T T E N P R E M I U M ($m) ROLLING 12 MONTHS 1 • NZ retention st
Slide 18: FY24: Operational efficiencies reduce MER
FY24: Operational efficiencies reduce MER MANAGEMENT EXPENSE RATIO (% NEP) Operational efficiency • Digital service transactions at 57%; up from 53% for the same period last year • Suva hub answering 45% of NZ sales and service calls • Management expense increase below inflation • One scalable platf
Slide 19: FY24: BAU claims ratio beginning to reduce
FY24: BAU claims ratio beginning to reduce 1 2 • 54% BAU claims ratio; reduced from peak in FY23 but remains MOTOR SEVERITY AND FREQUENCY elevated due to large house claims in FY24 ($8.8m vs $3.5m) • Motor frequency stabilising and loss ratio trending downwards • Inflation experienced during FY23 im
Slide 20: Targeted and transparent pricing, underwriting
Targeted and transparent pricing, underwriting Dynamic pricing • Enhanced accuracy motor pricing algorithm with use of additional rating variables • Improved transparency of discounting Expanded risk-based pricing • Earthquake, flood, landslide, sea surge in place • Landslide and sea surge to be aut
Slide 21: Investing in future resilience and sustainability
Investing in future resilience and sustainability • Parametric partnership with CelsiusPro, global insurtech • Parametric product live in Fiji, Samoa, and Tonga • Investing in our people, and Fiji’s future • Scholarships for future talent in Fiji and New Zealand • Climate-related financial disclosur
Slide 22: FY24 guidance and future targets
FY24 guidance and future targets • FY24 guidance: expected to be at the upper end of, or exceed guidance ranges for GWP & underlying NPAT; at lower end of, or favourable to guidance for combined operating ratio (COR) • No large events recorded in FY24 to date • FY25 and FY26 targets introduced; exce
Slide 23: Strategic delivery leads to strong performance
Strategic delivery leads to strong performance • Continued double-digit premium growth • Continued reduction in MER • Claims ratio normalising • Solvency position above target • At upper end of or exceeding FY24 guidance 23
Slide 24: Shareholder resolutions
Shareholder resolutions Michael Stiassny, Chairman
Slide 25: Shareholder resolutions
Shareholder resolutions Resolution 1 • Election of Michael Cutter Resolution 2 • Authorisation for Board to determine auditor remuneration Resolution 3 • Adoption of new Company Constitution 25
Slide 26: Questions & general business?
Questions & general business?
Slide 27: Disclaimer
Disclaimer This presentation has been prepared by Tower Limited to provide shareholders with information on Tower’s business. This document is part of, and should be read in conjunction with an oral briefing to be given by Tower. A copy of this webcast of the briefing is available at http://www.towe