Tower Limited · NZX:TWR
Tower — Shareholder Meeting (February 2025)
29 slides from Tower's shareholder meeting presentation, Feb 11, 2025
Slide 1: Tower Annual Shareholder Meeting
Tower Annual Shareholder Meeting 11 February, 2025
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 update Michael Stiassny, Chairman CEO’s address Blair Turnbull, Chief Executive Officer Looking forward Paul Johnston, Chief Financial Officer Shareholder resolutions Questions & general business Michael Stiassny, Chairman 4
Slide 5: Chairman's update
Chairman’s update Strong business performance provides solid platform for further gains Generating value for shareholders • FY24 total dividends 9.5 cents per share • $45m capital return proposed • Tower entered the NZX 50 Portfolio Index and MidCap Index Strategy embedded and delivering results • I
Slide 6: CEO address
CEO address Blair Turnbull Chief Executive Officer 6
Slide 7: Our Purpose, Vision, Strategy and Values
Our Purpose To inspire, shape and protect the future for the good of our customers and communities. 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 personal lines and SME insurer in o
Slide 8: FY24 performance
FY24 performance Positive operational and business performance GWP growth BAU claims ratio MER 1 Customers (Gross written premium) (Business as usual) (Management expense ratio) 1 15% | $595m 305,000 48% 31.4% vs $527m in FY23 vs 311,000 in FY23 vs 55% in FY23 vs 32.0% in FY23 3 Large event costs Un
Slide 9: FY24: Continued premium growth
FY24: Continued premium growth 15% underlying GWP growth1 Targeted growth G R O S S W R I T T E N P R E M I U M ($m) • House GWP growth 18%; 72% rate, 28% volume • Motor GWP growth 13%; off-risking of high theft vehicles reduces number of motor policies • Risk-based pricing improving exposure; 91% o
Slide 10: FY24: Continued improvement in MER
FY24: Continued improvement in MER Management expense ratio (MER) improved to 31.4% MANAGEMENT EXPENSE RATIO 1 Operational efficiencies • Achieving scale with targeted premium growth • Suva hub answering 55% of NZ sales and service calls (FY23: 16%) Streamlining the business • Sale of Solomon Island
Slide 11: FY24: BAU claims ratio significantly improves
FY24: BAU claims ratio significantly improves Business as usual claims ratio improved to 48.1% Effective pricing and underwriting BAU CLAIMS RATIO 1 • Targeted rating has reduced high-risk policies • Rating for inflation, reinsurance, high motor theft Faster and more efficient claims management • Di
Slide 12: FY24: Delivering shareholder returns
FY24: Delivering shareholder returns CAPITAL RETURN & AM BEST TOWER SOLVENCY1 DIVIDENDS FINANCIAL STRENGTH RATING NZ PARENT ($m) $81m A- Proposed to be returned to Affirmed in shareholders April 2024 FY24 TOWER PARENT FY24 FULL YEAR SOLVENCY DIVIDEND PAID 212% 9.5c Post dividend and None paid in FY2
Slide 13: FY25 Q1 trading update
FY25 Q1 trading update For the three months to December 31, 2024
Slide 14: FY25 Q1 trading update
FY25 Q1 trading update Strong BAU claims performance, operational efficiencies, and targeted growth GWP growth Customers BAU claims ratio (Gross written premium) (Business as usual) 1 6% | $155m 310,000 39% vs $150m in Q1 FY24 vs 305,000 as at 30 Sep 24 vs 57% in Q1 FY24 MER Large event costs Solven
Slide 15: Q1: Continued premium growth
Q1: Continued premium growth GROUP GWP ($m) • 6% 1 GWP growth vs same period prior year • Rate increases have slowed, volume growth increased • 5k customer growth in Q1 to 310k • 12% GWP growth in NZ House portfolio; 6% volume growth • NZ retention at 78% (Q1 FY24: 78%)1 NET MOVEMENT IN NZ RISKS BY
Slide 16: Q1: Customer experience
Q1: Customer experience NET PROMOTER SCORE • NPS improved to +41 • Sales & service contact centre abandonment rate reduced to 7% (Q1 FY24: 9%) • Active users of My Tower increased 4% to 170k from Sep-24 • 7% increase in My Tower logins vs Q1 FY24 • Award winning service: 1st place Supreme Award for
Slide 17: Q1: Continued improvement in MER
Q1: Continued improvement in MER MANAGEMENT EXPENSE RATIO 1 • Management expense ratio at 30%, down from 32% • Achieving scale with targeted premium growth • Suva hub answering 70% of NZ sales and service calls • Digital transactions: 45% service, 60% sales, 66% claims Note 1: Calculated as manageme
Slide 18: Q1: BAU claims ratio significantly improves
Q1: BAU claims ratio significantly improves BAU CLAIMS RATIO 1 • BAU loss ratio reduced to 39% • Targeted rating has reduced high-risk policies • External factors remain favourable with calmer weather and lower inflation • Internal assessing of motor claims increased to 94% reducing assessment cost
Slide 19: Strong capital and solvency position
Strong capital and solvency position TOWER SOLVENCY1 NZ PARENT ($m) • Tower expects to continue to have a solvency margin, after the proposed capital return, that is in excess of both Previous ISS Pro forma ISS2 regulatory requirements and internal targets • RBNZ has issued a second amendment to the
Slide 20: Looking forward
Looking forward Paul Johnston
Slide 21: FY25 guidance and future targets
FY25 guidance and future targets FY24 FY25 FY27 Actual Guidance Target GWP growth 15% 7% - 12% 10% - 15% (excluding operations sold) Large events cost/allowance -$2.3m $50m Management expense ratio 31.4% < 29% < 26% Combined operating ratio 79% 84% - 86% < 86% Underlying NPAT $83.5m $60m - $70m (ass
Slide 22: Focus on customer experience and targeted growth
Focus on customer experience and targeted growth • Enhancing risk-based pricing – landslide and sea surge applied to renewal book and included in purchase journey • New partnerships for further growth • Motor policy growth through targeted risk approach • Renewal journey uplift to increase retention
Slide 23: Continuous efficiency & process improvements
Continuous efficiency & process improvements MANAGEMENT EXPENSE RATIO (% NEP) • Targeting 80% of all NZ sales, service, and claim lodgement tasks to be digital by end FY27 (FY24: 45%) • New house assessing system planned, reducing Targets assessment time and repair costs • New contact centre platfor
Slide 24: Fostering sustainability
Fostering sustainability Climate and community • Parametric partnership with the UNCDF and CelsiusPro, global insurtech • FY24 Scope 1 and 2 emissions 20% below FY20 baseline year • Supporting university scholarships in New Zealand and Fiji Our people • Staff engagement score 8.1 • Gender pay equity
Slide 25: Continued focus on strategic delivery & strong performance
Continued focus on strategic delivery & strong performance • Continuing to invest in customer experience • Customer remediations, FMA proceedings and implementing lessons • Delivering profitable growth in targeted segments • Continuous efficiency, digitisation and process improvements • Strong capit
Slide 26: Shareholder resolutions
Shareholder resolutions Michael Stiassny, Chairman
Slide 27: Shareholder resolutions
Shareholder resolutions Resolution 1 • Authorisation for Board to determine auditor remuneration Resolution 2 • Re-election of Marcus Nagel as Director Resolution 3 • Approval of capital return via a scheme of arrangement 27
Slide 28: Questions & general business?
Questions & general business?
Slide 29: 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