Tower (TWR) investor relations material

Executive summary

• Underlying NPAT for HY26 was $36.8m, with reported profit at $22.9m, reflecting resilience amid higher claims, remediation, and pricing pressure.

• Interim dividend of 5 cents per share declared, supported by strong capital and solvency position.

• Strategic investments in technology, AI, and partnerships are driving efficiency, digital transformation, and future growth.

• Remediation program advanced, addressing legacy pricing system errors and regulatory changes.

• Customer base grew 5% year-over-year to 327,000, driven by strong growth in home insurance policies.

Financial highlights

• GWP grew 1% year-over-year to $301m, with house GWP up 2% and 9% growth in house policies; motor GWP flat despite 3% policy growth.

• Underlying NPAT declined from $61.7m in HY25 to $36.8m; reported profit fell from $49.7m to $22.9m.

• Large event costs were $18.5m, up from $3m in the prior period.

• BAU claims ratio increased to 44% from 38% in the prior period, reflecting normalized weather and claims frequency.

• MER increased to 31.4%, within guidance, due to continued investment in technology and marketing.

Outlook and guidance

• FY26 GWP growth expected in low single digits, revised down from previous 5%-10% guidance due to lower average premiums and subdued market.

• Underlying NPAT (excluding large events) forecast at $87–97m; statutory NPAT expected at $55–65m assuming full large event allowance utilization.

• Combined operating ratio expected between 86% and 88% for FY26.

• MER anticipated to remain between 31% and 32% due to ongoing investment.

• Second half priorities include launching the Westpac partnership, digital enhancements, and further customer remediation.