Slide 1: FY23 Full Year Results for Announcement to Market
Market Information Company Announcements Office NZX Limited ASX Limited Level 1, NZX Centre Exchange Centre 11 Cable Street Level 6, 20 Bridge Street Sydney NSW 2000 Wellington Australia New Zealand 23 November 2023 Tower Limited FY23 Full Year Results for Announcement to Market In accordance with N
Slide 2: Tower Reports Growth and Efficiency in a Challenging Year
Level 5, 136 Fanshawe Street Auckland 1142, New Zealand ARBN 645 941 028 Incorporated in New Zealand 23 November 2023 Tower Reports Growth and Efficiency in a Challenging Year Tower Limited (NZX/ASX: TWR) has today announced its full year results reporting improved revenue growth and expense control
Slide 3: Looking forward
Level 5, 136 Fanshawe Street Auckland 1142, New Zealand ARBN 645 941 028 Incorporated in New Zealand Looking forward The successful renewal of Tower’s reinsurance programme with $750m of catastrophe cover and the purchase of a prepaid third event cover up to $75m will provide important protection fr
Slide 4: Results announcement template
Template Results announcement (for Equity Security issuer/Equity and Debt Security issuer) Updated as at June 2023 Please do not amend or delete individual rows. As this template relates to prescribed content, changes to content should only be made where it is clearly indicated that this is permitte
Slide 5: Authority for this announcement
Authority for this announcement Name of person authorised Tania Pearson, General Counsel & Company Secretary to make this announcement Contact person for this Emily Davies, Head of Corporate Affairs and Sustainability announcement Contact phone number +64 21 815 149 Contact email address emily.davie
Slide 6: Tower Limited Annual Report 2023
Tower Limited Annual Report 2023
Slide 7: Slide 7
Slide 8: Contents
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 1 Contents 2023 IN REVIEW 3 2023 snapshot 4 Update from Chair 6 Update from CEO 8 LOOKING AFTER OUR CUSTOMERS AND COMMUNITIES 11 A year of un
Slide 9: Annual Report 2023
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 2
Slide 10: 2023 in Review
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 3 2023 IN REVIEW
Slide 11: 2023 snapshot
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 4 2023 snapshot 17 % 321 K Underlying GWP Customer growth vs. growth1 $527m vs. 310k in FY22 $457m in FY22 $ 7.6 M 32.2% Underlying profit2 M
Slide 12: Years in operation and counting
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 5 8 39 % Countries Senior leaders are women* 154 87.5K Years in operation Reported claims across and counting New Zealand and the Pacific, in
Slide 13: Update from the Chair
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 6 Update from the Chair In what has proved to be an extremely tough year for Importantly, Tower’s ability to proactively manage risks In the
Slide 14: Update from the Chair (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 7 In an ideal world, Tower would continue offering affordable, comprehensive cover to all, but in today’s complex environment, that approach
Slide 15: Update from the CEO
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 8 Update from the CEO At Tower, our purpose is to inspire, shape and Business performance Navigating catastrophic events protect the future f
Slide 16: Risk-based pricing and sustainability
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 9 Risk-based pricing supports competitive pricing and Sustainability is at the heart of our business Summary robust underwriting, and can inf
Slide 17: Community hub in Auckland
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 10 A community hub in Auckland, following January 27 weather event
Slide 18: Looking after our customers and communities
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 11 LOOKING AFTER OUR CUSTOMERS AND COMMUNITIES
Slide 19: A year of unprecedented large events
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 12 A year of unprecedented large events JAN 23 FEB 23 MAR 23 MAY 23 Auckland and upper Cyclone Gabrielle Vanuatu cyclones Auckland rain event
Slide 20: Events snapshot
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 13 Events snapshot Auckland and upper North Island weather event and Cyclone Gabrielle 5,711 1,045 2,330 House claims Motor claims Contents c
Slide 21: Supporting New Zealand's recovery
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 14 Supporting New Zealand’s recovery This financial year Aotearoa Tower’s rapid response faced two catastrophic events, The speed of our init
Slide 22: Claims settled and customer support
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 15 83 % Auckland & upper North Island event claims settled* 84 % Cyclone Gabrielle event claims settled* Tower staff at an Auckland community
Slide 23: ANNUAL REPORT 2023 2023 in review Weather events
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 16
Slide 24: Delivering on our strategy
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 17 DELIVERING ON OUR STRATEGY
Slide 25: Our strategy
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 18 Our strategy Our values To be the best direct insurer in our selected markets differentiated through digital and data, fairness and WE DO
Slide 26: Our purpose and vision
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 19 Our purpose Our vision To inspire, shape and protect the future for the good of our customers and communities. Ta tātou kaupapa To deliver
Slide 27: Leading customer experience
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 20 Leading customer experience
Slide 28: Innovating for our customers
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 21 Innovating for our customers In line with our strategy to create My Tower leading customer experiences, Tower In FY23, our flagship, digit
Slide 29: Forward thinking products for modern customers
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 22 77 Forward thinking products for modern customers Our focus on innovation and investment in large- % NZ direct sales online vs. 66% in FY2
Slide 30: Partnering for success
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 23 35 Partnering for success Our partners continued to drive more customers to Tower in FY23, with an uptick in referrals and subsequent % In
Slide 31: Sustainable and innovative growth
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 24 Sustainable and innovative growth Growth is key to our strategy Parametric insurance for the Pacific but in order to be there for our In A
Slide 32: Risk-based pricing, a fair way to price insurance
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 25 Risk-based pricing, a fair way to price insurance In FY24, Tower will fully automate underwriting for landslide and sea surge risks, and t
Slide 33: Fair and transparent insurance
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 26 Fair and transparent insurance 194 At Tower, fairness and transparency Committed to supporting our customers Tower team members are a core
Slide 34: Putting things right for our customers
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 27 Putting things right for our customers Tower is focused on putting things right for customers who have received incorrect discounts or ben
Slide 35: Operationally efficient and effective
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 28 Operationally efficient and effective
Slide 36: Our digital and data capabilities
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 29 Our digital and data capabilities 55 55 As a forward thinking insurer, the customer and efficiency benefits from our digital platform cont
Slide 37: Our vision for the future of claims
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 30 Our vision for the future of claims Tower’s vision for the future is of a digitised end-to- end customer experience, where our customers c
Slide 38: Simplifying our business to deliver sustainable growth
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 31 Simplifying our business to deliver sustainable growth and efficiencies Over the last four years Tower One core platform has invested heav
Slide 39: The cornerstone of our Pacific operation
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 32 The cornerstone of our Pacific operation With our core platform and Supporting our large event response Our strategic advantage My Tower n
Slide 40: Future growth enabled
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 33 New Zealand Fiji Business Council breakfast with Fiji Prime Minister Sitiveni Rabuka Future growth enabled To support this growth, at the
Slide 41: High performing culture
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 34 High performing culture
Slide 42: Our culture
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 35 Our culture Our people are at the heart of Diverse and inclusive everything we do. We know that At Tower, our values are; ‘we do what’s ri
Slide 43: Committed to our people
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 36 Committed to our people
Slide 44: Putting our people first
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 37 8.3 Employees rated Tower’s commitment to health and wellbeing at 8.3, in the top 25% of the global finance sector* Putting our people fir
Slide 45: Gender pay gap
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 38 20.2 % Gender pay gap, improved by 5.7% vs. FY22 When we take the total salary for all women and divide that by the number of women, and t
Slide 46: Looking after our people at work and at home
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 39 Looking after our people at work and at home In FY23 Tower increased parental leave entitlements from 12 to 16 weeks paid leave for primar
Slide 47: Resilient
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 40 Resilient
Slide 48: Here to do good, for good
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 41 Here to do good, for good 2023 was challenging for the local and global insurance industry. Our ability to stay agile, driven by digital a
Slide 49: Real-time, automated underwriting
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 42 Protecting Tower and our customers with real-time, automated underwriting In FY23, we continued automating our underwriting processes unde
Slide 50: Robust reinsurance
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 43 Robust reinsurance This cover, combined with Tower’s existing multi-year placements, results in a reinsurance excess increase to In May, f
Slide 51: Protecting the everyday
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 44 Protecting the everyday 4 As an insurer it’s our job to be there K 14 Travel insurance policies Rugby ball related claims in when the wors
Slide 52: Claims statistics
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 45 12.7 K Claims for Kiwi homes 530 Claims for hot water cylinders 26 % Increase in NZ motor theft claims 60 % Growth in electric vehicles (E
Slide 53: ANNUAL REPORT 2023 2023 in review Weather events
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 46
Slide 54: Environmental, Social and Governance Performance
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 47 ENVIRONMENTAL, SOCIAL AND GOVERNANCE PERFORMANCE
Slide 55: Sustainability at the heart of what we do
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 48 Sustainability at Moving all aspects of our business towards zero- the heart of what carbon and zero waste, and ensuring we have a positiv
Slide 56: ESG Governance
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 49 ESG Governance Tower’s Board provides the highest level of ESG governance at Tower. The Board approves and monitors our ESG governance and
Slide 57: Reducing our emissions
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 50 Reducing our emissions Emissions from powering our premises are now 25% below our baseline year, largely due to the move Tower has set a s
Slide 58: Climate-related Financial Disclosures
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 51 Climate-related Financial Disclosures Identifying material impacts In FY23 Tower made positive progress towards In 2021, we identified a r
Slide 59: Material impacts
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 52 Material impacts STRATEGY MATERIAL TOPIC SDG FY24 TARGETS TARGET FOR FY25 ALIGNMENT OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS ALIGNMENT MAN
Slide 60: Material impacts (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 53 Material impacts (continued) STRATEGY MATERIAL TOPIC SDG FY24 TARGETS TARGET FOR FY25 ALIGNMENT OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS A
Slide 61: Material impacts (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 54 Material impacts (continued) STRATEGY MATERIAL TOPIC SDG FY24 TARGETS TARGET FOR FY25 ALIGNMENT OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS A
Slide 62: Material impacts (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 55 Material impacts (continued) STRATEGY MATERIAL TOPIC SDG FY24 TARGETS TARGET FOR FY25 ALIGNMENT OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS A
Slide 63: Material impacts (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 56 Material impacts (continued) STRATEGY MATERIAL TOPIC SDG FY24 TARGETS TARGET FOR FY25 ALIGNMENT OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS A
Slide 64: Material impacts (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 57 Material impacts (continued) STRATEGY MATERIAL TOPIC SDG FY24 TARGETS TARGET FOR FY25 ALIGNMENT OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS A
Slide 65: Board of Directors
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 58 Board of Directors Michael Stiassny Graham Stuart Geraldine McBride LLB, BCom, CFInstD BCom (Hons), MS, FCA BSc Chairman Non-Executive Dir
Slide 66: Board of Directors (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 59 Marcus Nagel Mike Cutter Blair Turnbull MBA (International Management), BSc (Hons) GAICD BCom, PGDipCom MBA (Banking and Finance) Non Exec
Slide 67: ANNUAL REPORT 2023 2023 in review Weather events
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 60
Slide 68: Consolidated Financial Statements
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 61 CONSOLIDATED FINANCIAL STATEMENTS
Slide 69: Financial Statements contents
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 62 Financial Statements 4.8 Operational risk 88 4.9 Regulatory and compliance risk 88 Consolidated statement of comprehensive income 63 4.10
Slide 70: Consolidated statement of comprehensive income
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 63 Consolidated statement of comprehensive income FOR THE YEAR ENDED 30 SEPTEMBER 2023 RE-PRESENTED RE-PRESENTED 2023 2022 2023 2022 NOTE $00
Slide 71: Consolidated balance sheet
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 64 Consolidated balance sheet AS AT 30 SEPTEMBER 2023 2023 2022 2023 2022 NOTE $000 $000 NOTE $000 $000 Assets Equity Cash and cash equivalen
Slide 72: Consolidated statement of changes in equity
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 65 Consolidated statement of changes in equity YEAR ENDED 30 SEPTEMBER 2023 ATTRIBUTED TO SHAREHOLDERS CONTRIBUTED ACCUMULATED NON-CONTROLLIN
Slide 73: Consolidated statement of cash flows
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 66 Consolidated statement of cash flows FOR THE YEAR ENDED 30 SEPTEMBER 2023 RE–PRESENTED RE–PRESENTED 2023 2022 2023 2022 NOTE $000 $000 NOT
Slide 74: Notes to the consolidated financial statements
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 67 Notes to the consolidated financial statements 1 Overview d. Re-presentation of comparatives This section provides information that is hel
Slide 75: Notes to the consolidated financial statements (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 68 Notes to the consolidated financial statements (continued) 1.2 Consolidation (continued) c. Subsidiaries The table below lists Tower Limit
Slide 76: Notes: segmental reporting
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 69 Notes to the consolidated financial statements (continued) 1.3 Critical accounting judgements and estimates b. Financial performance of co
Slide 77: Notes: segmental reporting and underwriting activities
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 70 Notes to the consolidated financial statements (continued) 1.4 Segmental reporting (continued) 2 Underwriting activities c. Financial posi
Slide 78: Notes: underwriting revenue
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 71 Notes to the consolidated financial statements (continued) 2.1 Underwriting Revenue (continued) Recognition and measurement Net claims exp
Slide 79: Notes: net outstanding claims
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 72 Notes to the consolidated financial statements (continued) 2.4 Net outstanding claims a. Composition EXC. CANTERBURY EARTHQUAKE CANTERBURY
Slide 80: Notes: reconciliation of net outstanding claims
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 73 Notes to the consolidated financial statements (continued) 2.4 Net outstanding claims (continued) b. Reconciliation of movements in net ou
Slide 81: Notes: development of claims
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 74 Notes to the consolidated financial statements (continued) 2.4 Net outstanding claims (continued) c. Development of claims The following t
Slide 82: Notes: actuarial information
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 75 Notes to the consolidated financial statements (continued) 2.4 Net outstanding claims (continued) d. Actuarial information f. Critical acc
Slide 83: Notes: sensitivity analysis
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 76 Notes to the consolidated financial statements (continued) 2.4 Net outstanding claims (continued) f. Critical accounting estimates and jud
Slide 84: Notes: unearned premium liability
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 77 Notes to the consolidated financial statements (continued) 2.5 Unearned premium liability Reconciliation 2023 2022 Adequacy of unearned pr
Slide 85: Notes: deferred insurance costs
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 78 Notes to the consolidated financial statements (continued) 2.6 Deferred insurance costs DEFERRED OUTWARDS DEFERRED ACQUISITION COSTS REINS
Slide 86: Notes: receivables
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 79 Notes to the consolidated financial statements (continued) 2.7 Receivables Composition 2023 2022 Finance lease receivables $000 $000 Tower
Slide 87: Notes: payables and provisions
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 80 Notes to the consolidated financial statements (continued) 2.8 Payables 2.9 Provisions Composition 2023 2022 Composition 2023 2022 $000 $0
Slide 88: Notes: investments and other income
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 81 Notes to the consolidated financial statements (continued) 3 Investments and other income 3.2 Investments Tower invests funds collected as
Slide 89: Notes: investments and risk management
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 82 Notes to the consolidated financial statements (continued) 3.2 Investments (continued) 4 Risk Management Recognition and measurement Tower
Slide 90: Notes: risk management overview
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 83 Notes to the consolidated financial statements (continued) 4.1 Risk management overview (continued) (iii) Third line: Internal Audit is re
Slide 91: Notes: credit risk
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 84 Notes to the consolidated financial statements (continued) 4.4 Credit risk Credit risk is the risk of loss that arises when a counterparty
Slide 92: Notes: credit and market risk
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 85 Notes to the consolidated financial statements (continued) 4.4 Credit risk (continued) 4.5 Market risk b. Reinsurance (continued) Market r
Slide 93: Notes: currency and interest rate risk
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 86 Notes to the consolidated financial statements (continued) 4.5 Market risk (continued) a. Currency risk (continued) b. Interest rate risk
Slide 94: Notes: liquidity risk and solvency capital
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 87 Notes to the consolidated financial statements (continued) 4.6 Liquidity risk a. Regulatory solvency capital The Reserve Bank of New Zeala
Slide 95: Notes: capital management and compliance risk
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 88 Notes to the consolidated financial statements (continued) 4.7 Capital management risk (continued) 4.9 Regulatory and compliance risk Regu
Slide 96: Notes: climate risk and capital structure
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 89 Notes to the consolidated financial statements (continued) 4.12 Climate change risk 5 Capital Structure Climate change risk is the risk as
Slide 97: Notes: reserves and earnings per share
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 90 Notes to the consolidated financial statements (continued) 5.2 Reserves 5.3 Net tangible assets per share 2023 2022 2023 2022 $000 $000 CE
Slide 98: Notes: property, plant and equipment
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 91 Notes to the consolidated financial statements (continued) 6 Other balance sheet items OFFICE LAND AND EQUIPMENT & MOTOR COMPUTER BUILDING
Slide 99: Notes: intangible assets
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 92 Notes to the consolidated financial statements (continued) 6.2 Intangible assets a. Amounts recognised in the balance sheet CUSTOMER CUSTO
Slide 100: Notes: intangible assets (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 93 Notes to the consolidated financial statements (continued) 6.2 Intangible assets (continued) a. Amounts recognised in the balance sheet (c
Slide 101: Notes: impairment testing and leases
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 94 Notes to the consolidated financial statements (continued) 6.2 Intangible assets (continued) 6.3 Leases b. Impairment testing (continued)
Slide 102: Notes: leases (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 95 Notes to the consolidated financial statements (continued) 6.3 Leases (continued) a. Amounts recognised in the balance sheet (continued) R
Slide 103: Notes: leases and tax
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 96 Notes to the consolidated financial statements (continued) 6.3 Leases (continued) 7 Tax b. Amounts recognised in the consolidated statemen
Slide 104: Notes: tax expense and deferred tax
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 97 Notes to the consolidated financial statements (continued) 7.1 Tax expense (continued) 7.3 Deferred tax Recognition and measurement a. Def
Slide 105: Notes: deferred tax liability
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 98 Notes to the consolidated financial statements (continued) 7.3 Deferred tax (continued) b. Deferred tax liability Recognition and measurem
Slide 106: Notes: imputation credits and other information
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 99 Notes to the consolidated financial statements (continued) 7.4 Imputation credits 8 Other information The Group imputation credit account
Slide 107: Notes: cash flow and related parties
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 100 Notes to the consolidated financial statements (continued) 8.1 Notes to the consolidated statement of cash flow (continued) 8.2 Related p
Slide 108: Notes: auditor's remuneration and held for sale
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 101 Notes to the consolidated financial statements (continued) 8.3 Auditor’s remuneration 8.4 Assets and liabilities held for sale Assets and
Slide 109: Notes: assets held for sale
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 102 Notes to the consolidated financial statements (continued) 8.4 Assets and liabilities held for sale (continued) The comparatives presente
Slide 110: Notes: discontinued operations
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 103 Notes to the consolidated financial statements (continued) 8.4 Assets and liabilities held for sale (continued) Profit from discontinued
Slide 111: Notes: incentive plan and contingent liabilities
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 104 Notes to the consolidated financial statements (continued) 8.5 Tower Long-Term Incentive Plan (continued) 8.6 Contingent liabilities Duri
Slide 112: Notes: new accounting standards
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 105 Notes to the consolidated financial statements (continued) 8.9 Impact of new accounting standards and changes in interpretation of curren
Slide 113: Independent auditor's report
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 106 Independent auditor’s report Basis for opinion To the shareholders of Tower Limited We conducted our audit in accordance with Internation
Slide 114: Independent auditor's report (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 107 Independent auditor’s report (continued) Key audit matters Key audit matters are those matters that, in our professional judgement, were
Slide 115: Independent auditor's report (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 108 Independent auditor’s report (continued) Description of the key audit matter How our audit addressed the key audit matter Valuation of re
Slide 116: Independent auditor's report (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 109 Independent auditor’s report (continued) Our audit approach economic decisions of users taken on the basis of the consolidated financial
Slide 117: Independent auditor's report (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 110 Independent auditor’s report (continued) Responsibilities of the Directors for the consolidated financial statements Who we report to The
Slide 118: Appointed Actuary's report
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 111 Appointed Actuary’s report 23 November 2023 The Directors Tower Limited 136 Fanshawe Street Auckland 1010 Dear Directors Review of Actuar
Slide 119: ANNUAL REPORT 2023 2023 in review Weather events
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 112
Slide 120: Corporate Governance at Tower
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 113 CORPORATE GOVERNANCE AT TOWER
Slide 121: Corporate governance overview and statutory disclosures
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 114 This section of the Annual Report provides an overview Statutory disclosures of the corporate governance principles, policies and process
Slide 122: Board Committees
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 115 Evaluation from the Board on Tower’s performance with respect Director Independence to diversity and inclusion The Board has determined,
Slide 123: Remuneration
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 116 Board and Committee meeting attendance Remuneration Director attendance at Board and Committee meetings held from 1 October 2022 to 30 Se
Slide 124: Employee remuneration
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 117 REMUNERATION AND BENEFITS RECEIVED BY TOWER SUBSIDIARY DIRECTORS Employee remuneration IN THE YEAR ENDED 30 SEPTEMBER 2023 The table belo
Slide 125: Security Holder Information
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 118 Security Holder Information Largest shareholders (as at 30 September 2023) The names and holdings of the 20 largest registered Tower shar
Slide 126: Securities held by Directors
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 119 Securities held by Directors Total voting securities At 30 September 2023, directors, or entities related to them held relevant interests
Slide 127: Interests register
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 120 Interests register Te Waenga Ltd Director Tower and its subsidiaries are required to maintain an interests register in which the Tegel Gr
Slide 128: Subsidiary Company Directors' Interests
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 121 Subsidiary Company Directors’ Interests Specific disclosures of interest Barry Whiteside Directors also disclosed the monetary value of d
Slide 129: Tower subsidiary company directors
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 122 Tower subsidiary company directors Directors of Tower’s subsidiary companies during the year to 30 September 2023 were: TOWER SUBSIDIARY
Slide 130: Other matters
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 123 Other matters The New Zealand Overseas Investment Act 2005 and related regulations determine certain investments in New Zealand by overse
Slide 131: ANNUAL REPORT 2023 2023 in review Weather events
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 124
Slide 132: GRI Content Index
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 125 GRI CONTENT INDEX
Slide 133: GRI content index
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 126 GRI content index Statement of use: Tower has reported the information cited in this GRI content index for the period 1 October 2022 to 3
Slide 134: GRI content index (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 127 DISCLOSURE LOCATION/INFORMATION DISCLOSURE LOCATION/INFORMATION 2-20 Process to determine See Director and Executive Remuneration Policy
Slide 135: GRI content index (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 128 GRI content index DISCLOSURE LOCATION/INFORMATION DISCLOSURE LOCATION/INFORMATION 305-3 Other indirect (Scope 3) Pg 50 401-3 Parental lea
Slide 136: GRI content index (continued)
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 129 DISCLOSURE LOCATION/INFORMATION DISCLOSURE LOCATION/INFORMATION 403-4 Worker participation, As per the Health and Safety at Work Act 2015
Slide 137: Tower Directory
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 130 Tower Directory Registered Office Enquiries New Zealand For customer enquiries, call Tower on 0800 808 808 Level 5, 136 Fanshawe Street,
Slide 138: Registrar
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 131 Registrar Shareholders can also manage your holdings electronically by using Computershare’s secure website www.investorcentre.com/nz New
Slide 139: ANNUAL REPORT 2023 2023 in review Weather events
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 132
Slide 140: ANNUAL REPORT 2023 insightcreative.co.nz 2023 in review
ANNUAL REPORT 2023 2023 in review Weather events Our strategy Sustainability Consolidated financial statements Corporate governance GRI content index Contents 133 insightcreative.co.nz TOW005
Slide 141: Tower: Forward thinking
& TOWER Forward thinking tower.co.nz
Slide 142: 2023 Full Year Results
Tower 2023 Full Year Results 1 October 2022 to 30 September 2023 23 November 2023
Slide 143: Agenda
Agenda Chairman’s update Michael Stiassny, Chairman Business update Blair Turnbull, Chief Executive Officer FY23 financial performance Paul Johnston, Chief Financial Officer Looking forward Blair Turnbull, Chief Executive Officer 2
Slide 144: Chairman's update
Chairman’s update Tower has navigated a challenging year, remains resilient 1. Tower demonstrates resilience to challenges • Risk-based pricing underpins competitive positioning, robust underwriting and continued growth • Continued support from global reinsurers 2. Insurance remains critical • Stron
Slide 145: Business update
Business update Blair Turnbull Chief Executive Officer 4
Slide 146: Results summary
Results summary • Proven resilient through record breaking catastrophe events • Strong premium growth from rate and volume • Organisational efficiency continues with further reductions in MER • Comprehensive reinsurance programme renewed for FY24 at competitive rates • Remediation payments and incre
Slide 147: Our performance
Our 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 c
Slide 148: Catastrophic and large weather events
Catastrophic and large weather events Tower large events $241m Current gross Claim numbers 1 Event description estimate Net cost Settled % Mitigating large event impacts in FY24 • Large event allowance of $45m included within FY24 guidance Auckland & upper North Island weather event $174m $12m 83% •
Slide 149: Managing impacts of inflation
Managing impacts of inflation Tower effective average premium growth Managing macro environment (annual increase) • Monthly inflation rate changes • 77 rate changes during FY23 • Sum insured amounts matched to Cordell or CPI • Rating for reinsurance and weather-related costs • High theft vehicle rat
Slide 150: Delivering on our strategy
Delivering on our strategy
Slide 151: Our purpose, vision and strategy
10 Our purpose To inspire, shape and protect the future for the good of our customers and communities Our vision To deliver beautifully simple and rewarding experiences that our people and our customers rave about. Our strategy To be the best direct insurer in our selected markets differentiated thr
Slide 152: Targeted customer and premium growth
Targeted customer and premium growth GROSS WRITTEN PREMIUM BY PRODUCT($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 • NZ retention stable at 77% (FY22: 78%) • 50% of customers hold multiple policies an
Slide 153: Customer experience improves through digital and data
Customer experience improves through digital and data NZ DIRECT SALES ONLINE • NPS improved to 28% (FY22: 20%); NZ online NPS at 55% • Service levels improved, abandonment rate reduced to 12% (FY22: 17%) • My Tower registrations increase 32% to 264k • Substantial progress made in multi-policy discou
Slide 154: Reducing MER through simplification and digitisation
Reducing MER through simplification and digitisation MANAGEMENT EXPENSE RATIO (% NEP) • Scale and rating reducing MER • Increased digitisation lowers cost to acquire and serve • Operational efficiency: Suva hub answering 16% of inbound calls relating to NZ policies • Management expense increase belo
Slide 155: Profit impacted by record events and claims inflation
Profit impacted by record events and claims inflation 1 UNDERLYING NPAT (including large events) • Despite unprecedented weather events, inflation, and crime our core business remains profitable • Streamlined business, efficiencies, digitisation, and targeted growth • Underlying NPAT of $7.6m, repor
Slide 156: Financial performance
Financial performance Paul Johnston Chief Financial Officer
Slide 157: Group underlying financial performance
Group underlying financial performance • Strong premium growth of 17% $ million FY23 FY22 Change • BAU loss ratio of 55.5% as a result of increased motor frequency, Gross written premium 526.8 457.3 69.5 high inflation, and higher number of small weather events Unearned premium (41.0) (
Slide 158: Underlying NPAT impacted by large events
Underlying NPAT impacted by large events 1 MOVEMENT IN UNDERLYING NPAT • Underlying NPAT of $7.6m, $19.7m below FY22 • Reduction in MER contributes $11.4m post tax to underlying NPAT • Business growth at a BAU COR of 90% • Additional large events impact of $26.4m post tax including • Higher BAU loss
Slide 159: BAU claims challenged by motor frequency and inflation
BAU claims challenged by motor frequency and inflation 2 1 NZ MOTOR FREQUENCY & SEVERITY • High inflation period and supply chain capacity constraints impacting cost of claims (severity) • NZ motor claims frequency above historical norms • Covid lockdowns lowered motor frequency in previous periods
Slide 160: BAU claims challenged by motor frequency and inflation
BAU claims challenged by motor frequency and inflation • BAU loss ratio increased by 6.6% to 55.5% in FY23 • Motor severity impacted by high inflation and supply chain disruptions. Loss ratio increasing due to inflation running ahead • FY22 benefited from a lower frequency as a result of Covid of ra
Slide 161: Continued improvement in management expenses
Continued improvement in management expenses MOVEMENT IN MANAGEMENT EXPENSE RATIO (MER) • MER reduced 3.8% to 32.2% • Scale contributes a 4.8% reduction in MER • Commission expenses decreased due to the purchase of legacy portfolios • Inflationary impacts offset by cost containment and efficiencies
Slide 162: Higher investment returns as yields increase
Higher investment returns as yields increase • Net investment income (NII) $14.3m for FY23, $13.1m higher than FY22 • Running yield on the core investment portfolio has increased to 6.07% at 30 September 2023 • Benefit from low duration strategy (target of 0.5 years) minimised mark to market losses
Slide 163: Reinsurance programme supports resilience
Reinsurance programme supports resilience $750m FY23 • Reinsurance expected to cover $204m of large events costs in FY23 • Catastrophe cover was reinstated following the two Reinsurance Reinsurance catastrophic events at a cost of $17.4m coverage of coverage of $733.1m $733.1m FY24 • Catastrophe rei
Slide 164: Canterbury earthquake claims reducing
Canterbury earthquake claims reducing OPEN CEQ CLAIMS • Full year charge of $1.2m after tax as a non-underlying item • 23 properties open as at 30 September 2023 with numbers of new claims reducing • Remaining gross outstanding claims provision is $19.1m down from $24.5m at September 2022 23
Slide 165: Capital and solvency position
Capital and solvency position 1 TOWER SOLVENCY - NZ PARENT ($m) • Solvency ratio of 159% (FY22: 205%) SR = 225% SR = 159% • Solvency margin is $53.8m above RBNZ minimum SR = 215% SR = 205% 2 solvency capital although below new internal target SR = 125% of $67.4m • Minimum solvency capital has increa
Slide 166: FY24 guidance
FY24 guidance FY23 Actual FY24 Guidance FY25 Target GWP growth 17% 10% - 15% 10% - 15% (excluding operations sold) Large events allowance $38m $45m Underlying NPAT $7.6m $22m - $27m (assuming full utilisation of large events allowance) Management expense ratio 32.2% 30% - 32% <28% Combined operating
Slide 167: Looking forward
Looking forward Blair Turnbull Chief Executive Officer
Slide 168: FY24 priorities
FY24 priorities • Continuing to invest in customer experience and targeting profitable growth • Completing remediation and further improving transparency of discounts • Settling FY23 catastrophe event claims • Continuous efficiency, digitisation, and process improvements • Investing in future resili
Slide 169: Leading customer experience and targeted growth
Leading customer experience and targeted growth • Enhanced risk-based pricing – landslide, sea surge automated through quote to buy in FY24 • New business product mix shift towards house • Leverage existing partnerships to grow organically • Rating changes made in FY23 will continue to flow through
Slide 170: Continuous improvement on efficiency & processes
Continuous improvement on efficiency & processes MANAGEMENT EXPENSE RATIO (% NEP) • Targeting 80% digital transactions of all NZ service tasks by end FY25 (FY23: 55%) • New house and motor assessing systems to be launched in FY24 reducing assessment time and repair costs • Expecting Suva hub to answ
Slide 171: Investing in future resilience and sustainability
Investing in future resilience and sustainability • Large event response embedded within operations and conservative financial allowance within guidance • Parametric partnership with CelsiusPro, global insurtech • Targeting to sell 10K+ parametric policies across five countries by FY25 • Emissions n
Slide 172: Questions?
Questions? Grower
Slide 173: Appendices
Appendices
Slide 174: Channel and efficiency improvements
Channel and efficiency improvements TOWER DIRECT PARTNERSHIPS PACIFIC • 22% premium growth to $391m • 26% active partner growth to $82m • Simplifying: PNG & Solomon Islands sale • 88% legacy portfolio policy retention • Advisor network grew 66% to 2,500 • My Tower live in 7 countries • 264k My Tower
Slide 175: Reconciliation between underlying profit and reported loss
Reconciliation between underlying profit after tax and reported loss after tax Underlying and reported (loss)/profit: • “Underlying (loss)/ profit” does not have a standardised meaning under Generally Accepted Accounting Practice (GAAP). Consequently it may not be comparable to similar measures pres
Slide 176: 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
Slide 177: Results Announcement Script: Chairman
Tower FY23 Results Announcement Script Slide 1 – 2023 Full Year Results Michael Stiassny Mōrena, good morning and thank you for making the time to join us for this investor call and presentation of our 2023 full year results. Slide 2 - Agenda With me in Auckland is our Chief Executive Officer, Blair
Slide 178: Call script: risk-based pricing and reinsurance
remains that risk and pricing transparency is not only fairer to customers but is in the best interests of our shareholders. It has certainly proven to be a compelling factor in securing a comprehensive reinsurance programme for FY24 at competitive rates. This is crucial as reinsurance provides prot
Slide 179: Call script: resilience and outlook
This approach is already common in many other parts of the world and, while it will take some getting used to, it will likely become a necessary replacement to comprehensive cover for at least some New Zealanders. In short, Tower’s continued resilience will be fostered through innovation and meeting
Slide 180: Call script: business update
I’ll now hand over to Blair and Paul, who will take you through the results and outlook before we take questions. Blair Turnbull Slide 4 – Business update Kia ora, thank you Michael and good morning, everyone. Thank you for joining us for our 2023 full year financial results. Slide 5 – Results summa
Slide 181: Call script: results and solvency
We are pleased to see our management expense ratio improve again to 32.2% versus 36% in FY22, thanks to our disciplined cost control and improved efficiencies through digitisation and increasing scale. Large event costs totalled $55.6m, up from $19m in FY22. These costs include the additional reinsu
Slide 182: Call script: large events allowance
To help mitigate large events impacts in FY24 we have purchased cover for two catastrophe events up to $750m each as well as prepaid cover for a third event up to $75m. We have also included a large events allowance of $45m within our guidance. This allowance has been calculated with an estimated 90
Slide 183: Call script: inflation and premium growth
substantial annual growth highlights the impact of technical premium increases and how these flow through to Gross Written Premium. Increases to home insurance premiums were moderated by the change in the EQC cap which became effective from 1 October 2022. We are also continuing to address the chall
Slide 184: Call script: delivering on our strategy
Slide 9 – Delivering on our strategy I am proud of Tower’s resilience which has enabled us to continue delivering on our strategy this year while responding to catastrophic events and other external challenges. Slide 10 – Our strategy At Tower, our purpose is to inspire, shape and protect the future
Slide 185: Call script: premium growth and partnerships
In the context of this high inflation environment, our 17% growth in premium reflects an appropriate mix of rating and organic growth with 75% of premium growth driven by decisive rating actions. Our Partnerships channel is delivering positive growth with GWP from active partners in New Zealand incr
Slide 186: Call script: My Tower and remediation
We are pleased to see My Tower registrations continue to rise, increasing by 32% this year to 264,000 registrations. We look forward to this number climbing further now that My Tower is live in all the markets where we operate. An important part of delivering the leading customer experience we aspir
Slide 187: Call script: MER and digitisation
With our core platform across all countries, another key driver of MER improvement is our increased digitisation which continues to lower the cost to acquire and serve customers. The expansion of our Suva hub this year has also delivered operational efficiencies as we moved workflows between sites t
Slide 188: Call script: consolidated results
Looking at the consolidated results, we can see that growth in GWP has been strong, increasing by $69.5m, or 17%, on FY22. This growth was predominantly driven by rating actions and excludes Tower’s Papua New Guinea subsidiary which was sold during the year. Increased motor frequency, along with hig
Slide 189: Call script: BAU claims
You can see that business growth, MER and investment income have helped support this result, but large events, and the change in the BAU loss ratio have had adverse impacts this year. Slide 18 – BAU claims challenged by motor frequency and inflation We have been taking strong rating actions over the
Slide 190: Call script: management expenses
Slide 19 – BAU claims challenged by motor frequency and inflation This page illustrates the increase in the loss ratio from FY22 to FY23, reflecting the increases to motor and home severity as outlined on the previous page. Slide 20 – Continued improvement in management expenses We are pleased to se
Slide 191: Call script: investment income and reinsurance
Our strategy has mitigated the impact on our profit from macroeconomic factors and mark to market movements in the past, and now allows us to benefit from higher interest rates, as evidenced by the running yield on the core investment portfolio increasing to 6.07% at 30 September 2023. Our outlook f
Slide 192: Call script: Canterbury earthquake claims
Slide 23 – Canterbury earthquake claims reducing We are continuing to make steady progress in settling Canterbury claims with 33 closed over the year. In line with expectations, we received an additional 20 new overcap and reopened claims, bringing the total number of open claims to 23 at 30 Septemb
Slide 193: Call script: solvency and guidance
We expect our solvency position to further improve in FY24 due to business profit and as catastrophe claims continue to be settled. In FY24 solvency will be reported under the new Interim Solvency Standard with no material change in excess solvency expected. Our A- credit rating was reaffirmed in Ap
Slide 194: Call script: looking forward
Slide 26 – Looking forward Thank you. I will now hand back to Blair who will provide an update on our priorities for FY24. Blair Turnbull Thank you, Paul. Slide 27 – FY24 priorities In line with our strategy and focus on delivering the medium-term targets Paul just highlighted, our five priorities f
Slide 195: Call script: efficiency and processes
An important priority is to complete the multi-policy discount remediation while continuing to redesign our multi-policy discount offering. As you can see in the example on this phone screen on the slide, we are also working to give customers greater transparency of their discounts. Slide 29 – Conti
Slide 196: Call script: parametric insurance and emissions
Tonga. We plan to offer parametric insurance across five Pacific territories by FY25. We are excited by the possibilities parametric insurance provides for people who may not benefit from traditional insurance products. We are reducing our operational emissions which are now 13% below our baseline y