TWR - Tower Insurance

[BlackPeter]

the hound is showing an unnormal level of ignorance.....La nina weather patterns bring 90% of major storm events to NZ....we are now in an el nino pattern which should last at least 12 months (often much longer)....knowledge is power

It's just - nobody can predict serious weather events more than maybe 10 days ahead ... and they do happen. Ah yes, and what good is it to put earthquakes into the long term risk category. The big one could start anytime - like NOW!

The reduced frequency of extreme weather events would only help you if you could build up a diversified portfolio of statistically independant insurance companies - otherwise its just playing Russian roulett, maybe with only one bullet in the chamber instead of with two.

If the bullet is next, it does not really matter whether the other chambers are empty - doesn't it?

[Basil]

I'm with BP on this one Snapper.  Climate change means those so called one in one-hundred-year events are going to happen FAR more often than they have in the past.  Maybe 2-3 times a year like last year...you never know what's around the corner.

[snapiti]

Statically major weather events happen during La nina weather patterns however climate change is real, I will offer you both a great opportunity to take a bottle of black label Jamison whisky from me or if you lose you buy me one. 
Last year 2023 major events cost TWR $55m,mainly weather, in 2022 financial year large events cost TWR $19m, mainly weather

Such is my conviction to el nino weather patterns I say for financial year ending September 2024 TWR large weather events will be $15m or less (not including earthquakes), would either of you like to take this most generous(climate change is real) bet

[BlackPeter]

Statically major weather events happen during La nina weather patterns however climate change is real, I will offer you both a great opportunity to take a bottle of black label Jamison whisky from me or if you lose you buy me one. 
Last year 2023 major events cost TWR $55m,mainly weather, in 2022 financial year large events cost TWR $19m, mainly weather

Such is my conviction to el nino weather patterns I say for financial year ending September 2024 TWR large weather events will be $15m or less (not including earthquakes), would either of you like to take this most generous(climate change is real) bet

Look snaps, my grandmother used to say "Those who like to bet, like as well to cheat". Given that I think that you are an honest guy, I suggest you stop this nonsense RIGHT NOW. It only proves that you did run out of arguments.

Bullying others with offers for bets proves absolutely nothing. If you have a  logical argument, present it, but if you just want a mudfight, than I suggest you go on a farm and pick depending on your constitution sows or cattle. But as any gentlemen I suggest you leave the choice of weapons to them, will you?

[snapiti]

Look snaps, my grandmother used to say "Those who like to bet, like as well to cheat". Given that I think that you are an honest guy, I suggest you stop this nonsense RIGHT NOW. It only proves that you did run out of arguments.

Bullying others with offers for bets proves absolutely nothing. If you have a  logical argument, present it, but if you just want a mudfight, than I suggest you go on a farm and pick depending on your constitution sows or cattle. But as any gentlemen I suggest you leave the choice of weapons to them, will you?

Why would you consider a simple bet as bullying, it was not meant that way and I thought the terms were generous and hardly playing for the crown jewels. I shall retract my offer.
Like most things in life it is really only a gamble if you have not done your home work, the less sure of yourself the more of a gamble it appears to be.
My grandad once gave me advice about poeple who would not put money where there mouth is.....wont say what he said as you appear overly sensitive and easily offended.
I admit I like a gamble especially when I have done my research, do you think your grandmother would have considered research as cheating?
I was hoping Beagle would take up the offer, if  I had won I would have made sure we drank it together and I reckon he would have done the same.

[Basil]

Snapper me ol mate, well said. Nothing wrong with a small wager between mates, agree 100% but I want you to be right as I'm really enjoying this fabulous summer, just one day's perfect boating after another after another...  What a difference compared to this time last year !!

[ken]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TWR/426524/412996.pdf

[ken]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TWR/426524/412997.pdf

[snapiti]

SP still on the right path

[Left Field]

Good update.......increased profit guidance....and  TWR getting lots of good talk on the other channel

https://www.nzx.com/announcements/429724

Kiwi insurer, Tower Limited (NZX/ASX: TWR) has today updated its earnings guidance on underlying net profit after tax (underlying NPAT) for the year ending 30 September 2024.

Full year underlying NPAT is expected to be greater than $35m. Previously Tower had advised that it expected underlying NPAT to be at the top end of or exceeding a range of between $22m and $27m. This updated guidance assumes full utilisation of the FY24 large events allowance which is conservatively set at $45m. No large events have been recorded in the financial year to date.

[Left Field]

From Forsyth Barr........( their comments on TWR before this update.)



------------------------------------------------

Tower (TWR) has experienced a positive reversal of fortunes, with its 1H24 likely including zero large events. The absenceof large events means: (1) TWR is likely to report an exceptionally strong 1H24 result, and (2) there is significant upside riskto FY24 guidance of 'the upper end or above the NZ$22m–NZ$27m range in underlying NPAT'. TWR's guidance includesNZ$45m of large events allowance, and we estimate none was utilised in 1H24. Accordingly, we adjust our forecasts byreducing our FY24 large events allowance -50%, choosing to be conservative despite large events having historically beenheavily skewed to the 1H. We also reduce our business as usual (BAU) claims ratio to account for premium growth and acontinued normalisation of motor claims, seeing our FY24 underlying profit estimate lift by +84% to NZ$49.2m. TWRtrades at a large discount to its peer group. We view the widening valuation gap as increasingly unjustified, especially giventhe upside risk to FY24 earnings expectations. Our blended spot valuation increases by +22% to NZ$1.41

A stellar 1H24 result likely on 28 May 2024

TWR is likely to report a stellar H24 result on 28 May 2024. We anticipate tailwinds from: (1) the lack of large events in the period, (2)continued strong GWP growth, (3) robust investment returns, (4) a normalisation in claims frequency and severity, and (5) furtherimprovements in the management expense ratio (MER). Assuming a business as usual (BAU) claims ratio of 52.1% and MER of 29.6%,we forecast underlying NPAT of NZ$35.1m. While not included in our forecasts, the strong 1H24 result may allow sufficient capitalrecovery for TWR to declare an interim dividend.

Benign weather boosts FY24

We estimate that TWR experienced no large events in the 1H24 period that ended on 31 March 2024. Given this fortunate position,we expect TWR to provide an update regarding its large events allowance for FY24 at its 1H24 result or earlier. A partial unwind ofthe allowance is a near certainty, especially in the context of ~81% of TWR's large events costs occurring in 1H periods since FY18,and the worst 2H large events expense since FY18 being only NZ$4.6m. Nevertheless, we expect TWR to be conservative and retain asignificant allowance. Reflecting this, we reduce our FY24 large events allowance -50% to NZ$22.5m.

Valuation support increasing

TWR trades at just 5.2x 12-month forward underlying earnings on our updated estimates, offering substantial upside to peers IAG on16.3x and SUN on ~15.1x. Over the last seven years TWR has traded on an average 12-month forward PE of 9.4x and at an averagediscount to its peers of -37%, meaning TWR trades below its historical valuation ranges. We find this difficult to reconcile given TWR'simproving business fundamentals, with increased scale driving improved efficiency and returns

[LoungeLizard]

Thought I had left it a bit late when I got in at 77c yesterday - stroke of luck to get the update and upswing today. Still a lot to run on this I feel - it would take quite a bad second half of the year to use up the large event provision, and even if they do, as guidance noted, 35m NP is the absolute minimum they would expect. I would favour a buy back over a return to dividend at that point, but they could well afford to do both. One to watch.

[Left Field]

Thought I had left it a bit late when I got in at 77c yesterday - stroke of luck to get the update and upswing today. Still a lot to run on this I feel - it would take quite a bad second half of the year to use up the large event provision, and even if they do, as guidance noted, 35m NP is the absolute minimum they would expect. I would favour a buy back over a return to dividend at that point, but they could well afford to do both. One to watch.

Besides, might as well as own the company that's hiking up our premiums ..... and nice to use the dividends as a premium offset. Blue chip addition to a well balanced portfolio.

[snapiti]

up 20% for me.....what to do.....could be an earthquake tomorrow.....bird in the hand me thinks

[lorraina]

www.chrislee.co.nz
This week's "Market News" covers Tower.