- Tower Limited updated its NPAT guidance to be between NZ$19 million and NZ$21 million for the year ending 30 September 2022.
- Inflation across the industry is a strain on both house and motor claims.
Tower expects its underlying NPAT for the period to be between NZ$19 million and NZ$21 million, from the previous range of NZ$22 million and NZ$24 million. The change comes amid various challenges that persist in affecting TWR’s financial position in the second half.
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Supply chain constraints led to a 14% increase in the cost of second hand vehicles and a 4.6% rise in the coats of house items in the quarter of June. Subsequently, inflation across the industry is the persistent source of strain on both motor and house claims.
Large house claims are above the long-term averages in FY21, majorly in the last quarter. Large house claims in FY21 have now reached 97, equalling NZ$21.3 million compared to 56, equalling NZ$10.4 million in FY20.
Tower has taken some significant steps to lower claims inflation since H1. They include rating and underwriting actions, bolstering claim management procedures, and also working with the supply chain to handle the increases seen. Although, the present lockdown due to COVID-19 has offset some impact of the above problems; it has only partly alleviated claims costs.
TWR paid a dividend of 2.5cps and pays a final dividend in line with its policy.
TWR’s operational developments and growth plans are on track. It will release its full-year results on 24 November.