General insurer Tower reported a ''tidy profit'' for the six months ended March, at the top end of the guidance provided earlier this month, Forsyth Barr broker Andrew Rooney said yesterday.
The general insurance underlying profit for the period was $17.9 million, up 37% on the $13.1 million reported in the previous corresponding period (pcp).
Gross earned premium rose 8% to $150.4 million and net earned premium was also up 8% at $124.7 million.
Claims and expenses rose 3% to $105 million.
The interim dividend of 8.5c per share was up nearly 31% on the pcp.
Mr Rooney said Tower had maintained its strong solvency position with $51 million in surplus cash - above minimum regulatory requirements - as well as holding $63 million of cash in corporate entities.
''Increasing compliance, Canterbury rebuild costs as well as adverse weather events continue to place upward pressure on premiums, while reinsurance cost growth continues to ease.''
Management expected the industry consolidation trend to remain in focus in the New Zealand market, he said.
No guidance was provided, although previous discussions highlighted the potential for annualising the first-half result.
Tower chairman Michael Stiassny said the positive results reflected the industry backdrop of rising premiums and fewer large claims, and the benefits of the company's strategy to be the ''leading light'' in New Zealand and Pacific general insurance.
Sound capital management remained a priority and Mr Stiassny announced a plan for an on-market share buy-back of up to $34 million, or up to 10% of Tower's issues capital, starting soon.
This was in line with Tower's policy of paying 90% to 100% of underlying net profit after tax in dividends.
During the first half, Tower reached 94% of all claims settled and closed by April 30, up from 81% on March 31, 2014.
Chief executive David Hancock said while pleasing progress in claims continued, Tower would increase provisions following the receipt of the latest actuarial review of projected claim costs.
At a glance
• Confirmed market buy-back of up to $34 million
• Half-year dividend of 8.5cps up 30.8% on pcp
• General insurance profit of $17.9million, up 37%
• Strong performance from the Pacific operations
