New Zealand-based insurer, Tower Limited, has reported an underlying profit after tax (underlying NPAT) of $107.2 million and a reported profit of $83.7 million for the financial year ended 30 September 2025.
According to Tower, its “record” FY25 result was driven by low large events costs and a significantly reduced business-as-usual (BAU) claims ratio, alongside customer growth.
Reported profit, up from $74.3 million in FY24, reflects adjustments for increased Canterbury earthquake claims cost estimates, the ongoing cost of customer remediations and a provision for software impairment.
Moreover, the firm’s gross written premium (GWP) increased by 2%, to $600 million. This growth reflects strong policy volumes, tempered by lower average premiums as Tower prioritised growth from low-risk customers and competitive pricing.
GWP from the house portfolio grew 10%, driven by volume growth, while motor GWP declined 5% due to lower pricing, partially offset by renewed motor volume growth.
Combined operating ratio (COR) improved to 74.1%, compared to the 79% reported in the same period last year.
BAU claims ratio sat at 41%, improving from 48%. This reduction was driven by a continuation of relatively benign weather, lower inflation, reduced motor theft as well as underwriting improvements, process enhancements and prior year rating adjustments.
Reflecting the year’s financial performance, Tower’s Board declared a fully imputed final dividend of 16.5 cents per share. This brings total dividends for FY25 to 24.5 cents per share.
Tower CEO Paul Johnston said: “This is an exceptional result, underpinned by Tower’s transformation, driven by investment in our digital platform and continued focus on underwriting discipline, technology, data, and efficiency. These actions demonstrate Tower’s commitment to delivering sustainable growth and building a resilient, customer-focused business for the future.
“However, it is worth noting that we expect conditions that influenced the FY24 and FY25 results, such as relatively benign weather, and prior-year rating flowing through the portfolio, to normalise in the coming year.”
Tower benefited from a relatively quiet year regarding major weather events. The insurer recorded $7 million in large event costs for FY25, attributed to Dunedin flooding in October 2024 and Cyclone Tam in April 2025.
However, the new financial year has started with activity. The insurer noted that storms across New Zealand in late October 2025 will be recorded as a large event in FY26 with an estimated cost of $4.5 million.
Looking ahead, Tower is forecasting underlying NPAT to be in the range of $55 million to $65 million, assuming full utilisation of an updated $45 million large events allowance.
GWP is anticipated to grow between 5% and 10%, supported by strategic partnerships and customer acquisition. Tower also expects management expense ratio (MER) to remain between 31% and 31%, as the company balances efficiency grains from digitalisation with ongoing investment in technology and customer experience.
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