Tower (TWR) H1 2025 earnings summary

Executive summary

• Underlying net profit after tax rose to $61.7m for HY25, up from $36.6m in HY24, with reported profit after tax at $49.7m, compared to $36m in the prior year.

• Delivered a $45m capital return and declared a fully imputed interim dividend of 8 cents per share.

• Strong operational and financial performance driven by improved claims, premium growth, and lower management expenses.

• Business growth led by New Zealand home and contents insurance, improved risk selection, and digital transformation.

• Maintained a strong capital and solvency position, confirmed by RBNZ stress tests and despite regulatory changes.

Financial highlights

• Gross written premium (GWP) for HY25 increased 4% year-over-year to $297m, with customer numbers up to 312,000.

• BAU claims ratio improved to 38.1% from 49.7% in HY24, reflecting benign weather and better risk selection.

• Management expense ratio reduced to 30.4% from 31.3% in HY24.

• Combined operating ratio improved to 69.7% from 80.2% in HY24.

• Net investment income was $10m, consistent with the prior year.

Outlook and guidance

• FY25 GWP growth expected to be mid-single digit, with a prudent large events allowance of $50m.

• Management expense ratio targeted below 31% for FY25, with a target of below 28% by FY27.

• Combined operating ratio forecast at 82–84% for FY25, targeting below 86% by FY27.

• Underlying NPAT for FY25 guided at $70–80m, assuming full utilisation of $50m large events allowance.

• Ongoing focus on risk-based pricing, efficiency, digitization, and customer experience improvements.