Tower profit jumps 67 per cent
Insurance firm and fund manager Tower has posted an annual net profit of $55.8 million, recovering from a slump caused by the Canterbury earthquakes.
The NZX-listed company grew its net profit by 67 per cent from $33.4m the previous year, and was not far off its $58.1m result in 2010.
Tower group managing director Rob Flannagan said it was a "strong" result for a company emerging from a particularly difficult period.
The insurer was making industry-leading progress settling claims following the Canterbury earthquakes, he said.
"To date, we have closed almost 60 per cent of claims and have made payments exceeding $200m, with over $3m being paid out every week."
All four of the Tower group's businesses improved their profits in the full-year to September 30.
The health insurance arm, which made a $13.3m profit, was sold earlier this month to ASX-listed health insurer NIB.
Subject to getting the deal signed off, Tower intends to repay $120m worth of capital back to shareholders.
The bulk of that sum would come from the proceeds of the sale, while the rest would come from a build-up of "lazy" capital on the balance sheets.
Tower's Life insurance business made a $32.7m profit, up 54 per cent from $21.2m the previous year.
The less profitable general insurance arm, which was still dealing with the effects of the quakes, made $13.2m, up from $2.5 million last year.
Underlying business continued to grow, and the claims ratio improved.
Tower's investment business turned a $7 million profit.
Funds under management grew by $256m to $4.23 billion over the year, with the KiwiSaver division showing particularly strong growth.
All Tower's results include a provision for discount rate movements, an accounting adjustment based on changes in long-term interest rates which affect profitability.
Without including the discount rate, the group's profit was $46.8m, up 50 per cent from $31m the previous year.
Tower will pay a final dividend of 6 cents per share, bringing the total pay-out this year to 11c.