Tensions among Tower directors are coming to a head with a decision looming over the insurance company's future.

The NZX-listed insurer has been reviewing its strategy and options including partnerships, mergers, acquisitions, sell-offs and/or a return of capital.

Sources say the board is split over a proposal to sell parts of the business and focus on a smaller range of services. "They commissioned Goldman [Sachs] to do a strategic review," said one investor.

"Nothing's come of that, so I can only assume the chief executive and his board supporters . . . are sitting on it."

Tower managing director Rob Flannagan said the board was close to finalising its position and there was no division among directors.

"Clearly there has been a lot of robust discussion . . . I think we're all on the same page."

The review coincides with Tower's 33.6 per cent shareholder, GPG, seeking ways to cash up its investment. Tower shares are trading around $1.83, valuing the company at $490 million, but some investors think it is undervalued at that price and want the board to tell shareholders how it plans to boost returns.

GPG said in its half-year results briefing last week that it felt the value of Tower's component parts was not reflected in the share price.

"Additionally, we are of the view that the company should affirmatively embark on an immediate process to optimise the structure and composition of its businesses, consistent with the interests of all shareholders."

While Tower has been mulling its options, Australian health insurer NIB Holdings has indicated interest in expanding into New Zealand. Flannagan said there was no deadline on Tower's decision.

- © Fairfax NZ News