Slide 1: TOWER Limited Results Announcement Presentation attached
26 November 2013 For personal use only Market Information Company Announcements Office NZX Limited Australian Stock Exchange Limited Level 2, NZX Centre Exchange Centre 11 Cable Street Level 6, 20 Bridge Street Wellington Sydney NSW 2000 NEW ZEALAND AUSTRALIA TOWER Limited Results Announcement Prese
Slide 2: A customer focused general insurer: Full year results to 30 September 2013
A customer focused For personal use only general insurer Full year results to 30 September 2013 26 November 2013
Slide 3: Disclaimer
A customer focused general insurer For personal use only 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 o
Slide 4: Presentation highlights
transition TOWER Group complete, foundations presentation highlights being laid For personal use only Full year reported profit of $34.4 million A final dividend of 6 cents per share (unimputed), bringing the total to 11 cents per share for the year. Payout ratio reconfirmed at 90-100% Three busines
Slide 5: What we are covering today
What we are covering today For personal use only + Financials Profit Balance sheet Solvency + Strategy Positioning for growth Operating structure 4
Slide 6: Full year results to September 2013
Full year results For personal use only to 30 September 2013
Slide 7: Profit summary
NPAT TOWER Group $34.4m Profit summary For personal use only Full year ended September 2013 2012 2011 General Insurance 19.0 26.8 24.7 Life 12.0 23.7 19.9 Health 0.9 13.3 9.7 Part year contribution Investments 4.0 7.0 6.8 due to sale of Business unit net profit after tax 35.9 70.8 61.1 business unit
Slide 8: Analysis of profit: General Insurance
sustained Analysis of profit premium growth General Insurance For personal use only Full year ended September 2013 2012 2011 • Sustained premium growth Gross earned premiums 267.2 238.9 208.3 Reinsurance (47.9) (41.2) (23.4) • Reinsurance outlook stabilising Net premiums 219.3 197.7 184.9 • Large cl
Slide 9: Overview of abnormal items
Overview of abnormal items one offs impacts For personal use only Investments sale 79.7 Gain on sale 73.0 Remaining Life sale related costs Sale related costs (6.4) Net gain on sale 66.61 • Costs associated with the sale and Health sale 102.3 separation of the remaining Life business Gain on sale 24
Slide 10: Canterbury earthquake update
Canterbury earthquake update providing certainty For personal use only TOWER continues to lead the industry in settling claims, with 74% of all claims now settled and closed. Our rebuild phase is accelerating and we are working closely with customers, stakeholders and suppliers to ensure this contin
Slide 11: Analysis of FY13 profit results: other divisions
other Analysis of FY13 profit results Other divisions For personal use only Life1 Health1 Investments1 Sep-13 Sep-13 Sep-13 Net premium/income 62.7 24.8 18.1 Includes: Total incurred claims (66.8) (16.4) - • Two month contribution from Premium payback payments - (2.3) - Health Management and sales e
Slide 12: Balance sheet summary
increased Balance sheet summary cash on hand For personal use only Year ended 2013 1 2012 2011 Cash and call deposits 350.0 199.7 152.9 Health and Life1 678.2 882.1 861.3 General Insurance 143.1 154.6 168.4 • Reflects the return of $120 Investments - - 0.1 million of capital in April 2013 Total inve
Slide 13: Solvency capital management
focus on Solvency capital management For personal use only TOWER is currently holding additional capital within its licensed insurers as part of the Reserve Bank of New Zealand licensing process. This covers risks associated with the Canterbury rebuild and the run-off of the remaining Life business.
Slide 14: Strategy
For personal use only Strategy
Slide 15: Market overview
Market overview growth opportunities For personal use only NEW ZEALAND TOTAL GWP MARKET SHARE1 Year ended 30 September 2013: $279.3m TOWER’s share IAG 41.7% AIG 3.7% Vero 25.4% Allianz 2.8% in personal lines Lumley 9.5% ACE 2.5% • House 10.5% TOWER’s GWP TOWER 4.7% Zurich 1.4% • Contents 10.3% FMG 3
Slide 16: General Insurance: strong base for growth
strong General Insurance base for growth key highlights For personal use only Year ended 30 September 2013: $279.3m $19.0m 499,707 266,271 GWP NORMALISED NPAT 1 Inforce policies Clients 2 New Zealand 80% New Zealand $14.4m New Zealand 88% New Zealand 87% Pacific Islands 20% Pacific Islands $4.6m Pac
Slide 17: Clear strategic direction
Clear strategic direction realise TOWER’s value For personal use only TOWER’s vision is to be the leading light in New Zealand general insurance. We have a clear direction and a customer-centric strategy focused on five key enablers that position us for growth and the delivery of returns to sharehol
Slide 18: Operating structure
customer Operating structure focused structure For personal use only Risk Reporting People Brand Service “It was so nice to have someone Performance Process Product Sales who understands what we were Capital Systems Channels Claims trying to insure, and the best Investors way of going about it. It r
Slide 19: In summary
customer In summary focused insurer For personal use only Give meaning to the TOWER brand – recognise its potential Deliver new products and services to the market to drive value Settle Canterbury earthquake claims, giving customers and the community certainty Continue to focus on cost efficiencies
Slide 20: Thank you, any questions?
For personal use only Thank you, any questions?
Slide 21: Appendix A: Supporting information
Appendix A: For personal use only Supporting information
Slide 22: Corporate governance and policies
Corporate governance and policies For personal use only TOWER continues to focus on improving overall Corporate Governance and policies: • IPSA compliant governance structures in place for each licensed insurer • Review of Board structure and size underway • Diversity policy approved and implemented
Slide 23: Balance sheet summary by division
Balance sheet summary Divisions For personal use only As at September 2013 General Life Corp Total Group1 Cash and call deposits 189.1 8.4 152.5 350.0 Total investment assets 143.1 673.8 4.4 821.3 Deferred acquisition costs 18.2 - - 18.2 Intangible assets - - 30.2 30.2 Other operational assets (liab
Slide 24: Investment assets breakdown
Investment assets breakdown For personal use only As at September 2013 General Life Corp Total Group Fixed interest securities (NZ) 127.9 482.0 4.4 614.3 Fixed interest securities (AUS) 12.5 - - 12.5 Total fixed interest securities 140.4 482.0 4.4 626.8 Equity securities (NZ) - 94.7 - 94.7 Equity se
Slide 25: Credit ratings for investment assets
Credit ratings for investment assets For personal use only 2013 Investment assets subject to credit rating AAA 229.1 AA 652.2 A 21.5 BBB or below 12.8 Unrated investments 1 56.7 972.3 Investment assets not subject to credit rating Fixed interest securities 52.7 Equity securities 96.4 Property securi
Slide 26: General Insurance: Analysis of profit
General Insurance Analysis of profit For personal use only Half year ended Sep-13 Mar-13 Sep-12 Mar-12 Sep-11 Mar-11 Sep-10 Net premiums 111.2 107.3 103.8 93.9 78.0 89.2 92.4 - Gross earned premiums 136.4 130.8 125.0 113.9 106.2 102.1 104.8 - Reinsurance (24.4) (23.5) (21.2) (20.0) (13.3) (10.2) (11
Slide 27: General Insurance: Key statistics
General Insurance Key statistics For personal use only General Insurance – Gross Written Premiums (rolling 12 month) and lapses Half year ended Sep-13 Mar-13 Sep-12 Mar-12 Sep-11 Mar-11 Sep-10 New Zealand 224.7 213.8 206.5 190.1 171.8 164.7 163.1 Pacific Islands 54.6 55.3 53.4 47.9 45.0 44.5 45.4 To
Slide 28: General Insurance: Key statistics
General Insurance Key statistics For personal use only General Insurance – Underwriting profits Half year ended Sep-13 Mar-13 Sep-12 Mar-12 Sep-11 Mar-11 Sep-10 Underwriting profit (loss) 13.9 (16.7) 2.7 4.7 (7.8) 3.7 6.8 Combined ratio 1 87.5% 115.5% 97.4% 95.0% 110.0% 96.0% 92.7% $ millions Genera
Slide 29: General Insurance: New Zealand overview
General Insurance New Zealand overview For personal use only FY13 GWP BREAKDOWN FY13 GWP BREAKDOWN FY13 NEW BUSINESS GWP BY PRODUCT BY DISTRIBUTION CHANNEL BY DISTRIBUTION CHANNEL Home 37% Direct 56% TOWER and FinTel phone sales 69% Motor 29% Fintel 4% Online 2% Contents 25% Alliances 40% Small and
Slide 30: General Insurance: Pacific Islands overview
General Insurance Pacific Islands overview For personal use only FY13 GWP BREAKDOWN FY13 GWP BREAKDOWN FY13 GWP BREAKDOWN BY PRODUCT BY DISTRIBUTION BY CHANNEL Commercial 30% PNG 35% Alliances 17% Motor 34% Fiji 27% Broker 33% Home & contents 19% Samoa 21% 1 Direct 50% Workers comp 6% Cook Islands 9