Tower (TWR) H1 2025 earnings summary

Executive summary

• Strong operational and financial performance in HY25, with underlying profit after tax rising to $61.7m from $36.6m in HY24 and reported profit after tax reaching $49.7m.

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

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

• Strong capital and solvency position maintained, confirmed by regulatory stress tests, despite regulatory changes and capital return.

• Strategic investments in digital transformation and risk-based pricing enhance efficiency and customer experience.

Financial highlights

• Gross written premium (GWP) for HY25 increased 4% year-over-year to $297m, with house GWP up 11% and motor GWP down 4%.

• Underlying NPAT rose to $61.7m from $36.6m in HY24; reported profit after tax was $49.7m, up from $36m.

• Management expense ratio improved to 30.4% from 31.3% in HY24; BAU claims ratio improved to 38.1% from 49.7%.

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

• Interim dividend of 8 cents per share declared, fully imputed.

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.

• Return on equity targeted at 13–17% for FY25, above 18% for FY27.