Tower, the general insurer under pressure to improve returns to shareholders, says it its looking at a number of options to achieve this and a final plan is likely to be announced in February.

The firm today acknowledged that while its share price has outperformed the NZX50 benchmark since separating from Tower Australia, it does not reflect the true value of the company.

The firm's shares closed at $1.85 apiece yesterday and have gained about 20 per cent since the start of the year.

The announcement comes after Tower recently completed a strategic review of its business, a process that reportedly split the board over the best path, with partnerships, mergers, acquisitions, sell-offs and/or a return of capital all being considered.

Although the division was denied last week, today's statement from managing director Rob Flannagan said the firm was "considering proposals including operational alliances and divestment of assets".

The insurer has appointed investment bank Goldman Sachs to help identify the best options, with a final proposal likely to be put before shareholders at its annual meeting early next year.

"At this point, there is no expected outcome from the exercise, and any such transactions would need to make sound business sense before being progressed," Flannagan said.

The plan to return value to shareholders comes after Guinness Peat Group, Tower's single biggest shareholder, said it felt the Tower's shares did not reflect the component value of the insurer.

GPG itself is in the throes of selling off its assets and returning the proceeds to share holders.

Tower chairman Bill Falconer, whose current term expires next February, will step down now to enable a new chairman to implement the initiatives emanating from the strategic review.

Tower last week warned the market that profit for the year to September was likely to come in $9 million lower than expected due to additional Christchurch earthquake provisions.

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