StockTalk

Tower announces positive FY22 result

FLLYR: TWR: Tower announces positive FY22 result

23 November, 2022

Strong business performance drives positive result for Tower
Kiwi insurer, Tower Limited (NZX/ASX:TWR) has today announced full-year
underlying profit including large events was $27.3m, up 31% from $20.8.m for
the full-year 2021. Reported profit was $18.9m, compared to $19.3m in the
prior year.

Summary of key underlying results: (See note 1 below)
o Gross written premium (GWP) $457m, up 13% on FY21
o Customer numbers increased 5% to 319,000
o Management expense ratio (MER) improved to 36% vs 37% in
FY21
o Large event costs $19m vs $13.9m in FY21
o Combined operating ratio (COR) 90.1% vs 91.4% in FY21
o Underlying net profit after tax (NPAT) excluding large
events $41m vs $30.8m in FY21
o Underlying NPAT including large events $27.3m vs $20.8m
in FY21
o Reported profit including large events $18.9m vs $19.3m
in FY21

Reported profit was impacted by a $5.5m after tax additional strengthening of
the residual Canterbury earthquake provision and a provision of $2.6m after
tax for customer remediation.

Reflecting the positive FY22 results and based on Tower's ordinary dividend
policy, the Board has declared a final dividend of 4 cents per share. This
brings total dividends for FY22 to 6.5 cents per share, compared to 5 cents
in FY21.

Strong growth and business performance....etc....

https://online.asb.co.nz/ost/646957ABCBE2D1B985A14A2DAE6C2258/quotesummary/index/nzx/twr?tab=1


Seems like pretty decent results ...and 9% yield (no imputation though).

Announcement that the CEO has flicked 116k shares.  He must've been keen to sell as they were cum divy. Oh well, it is deck building season I guess...

The service from Tower is appalling if you want to make a claim. Check out the number of 1 star reviews on Google reviews. Most say they do not answer the phone and never get back to you. Either a clever business model to drive short term profits and not pay claim or leading indicator of huge decline to come. I am betting on the latter - not much point in insurance if you can never claim. Not great for word of mouth.

Mrs got her car caught in the Auckland flood of late January.
We were assigned a case manager and we understood it would take a while for the claim to be progressed as they were literally swamped with claims.  As the weeks went by it got more and more frustrating living as a one car family, (that's like stepping back in time 30 years ago when we were so poor, we could only afford one old car).  Eventually out of frustration I started calling the case managers direct dial number and all I got was an endless series of the same messages over the next week, no matter what time of the day or evening I called.   

Then I decided enough is enough, so I called their general helpline and after waiting nearly 2 hours on hold actually got to speak to a real person and gave them a piece of my mind along the lines of... I know it would suit you guys if you never fixed our car but...
The excuse we got is our case manager had actually resigned with the stress of everything and we were assigned a new one.  I remember thinking what a load of crap....  Within a week the car had been assessed as a write-off and a couple of days later they paid out the sum insured.

A few weeks later I was at a lunch and one of the guests worked in the call center at Tower.  She told me the pressure is so intense its relentless.  The phone never stops.  The very second you finish one call the phone goes again, all day, every day.  It was an interesting wake up call for me that those guys have been under incredible pressure.

In terms of investing in Tower, I think shareholders are on a hiding to nothing with the ever-worsening ravages of climate change.

Fascinating anecdote Basil. You have more patience than me waiting for two hours. A real failure of Management in my view - all this waffle about insurance disruptor but seemingly unwilling or unable to answer the phone when their customers call. Panel beaters confirmed Tower is by far the worst of the bunch. Having learned my lesson, after many years as a premium paying customer, I will never take out another policy with Tower. I don't think I am the only one.

Not making excuses for them but to be fair Mos, as you know there was also the cyclone Gabrielle event that happened in February so two major insurance events with a couple of weeks or so of each other.  It's hard for any company to plan around the likelihood of the level of claims arising from those two major events in close succession.   There are only so many insurance assessors so when they get absolutely deluged with claims, it's understandable there will be significant delay's.  I actually ended up feeling quite sorry for the call center staff.  Constant calls all the time and I would wager a fair percentage of them were from people in a pretty emotional / stressed out frame of mind.  It must really drain the life force and energy out of you day in day out, week in, week out taking relentless numbers of calls like that.

Nothing like a 'strategic review' to get the share price moving

Seems Bain are a bit peeved at Tower going nowhere.

Maybe it's also a sign Tower have thrown the towel in the ring and finally decided it's all too hard.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TWR/422844/408814.pdf

Moved from Tower to Cove for car insurance  - premium  around half. No at fault accidents in past 5 years therefore was on max no claims and multi policy discounts with Tower. Suspect Tower will lose quite a bit of business to Cove.

great trading update from Tower.
I think the company is a little misunderstood, whereby they really are mainly just a marketing machine and ticket clipper company and have no more than a $12m exposure to anyone event.
I am insured with them but besides that, given my premiums have sky rocketed, I thought to myself with the la nina weather pattern ending, which tends to bring the cyclones, and moving into a el nino weather pattern chances are they maybe in for a good year.
Given the latest update I think I am right on track and already sit on some very nice capital gains....TWR investment is simple....the longer we don't get a large event the higher the share price will rise......no large earthquakes will be nice.....not a long term hold 

Quote from: snapiti on Feb 16, 2024, 01:01 PMgreat trading update from Tower.
I think the company is a little misunderstood, whereby they really are mainly just a marketing machine and ticket clipper company and have no more than a $12m exposure to anyone event.
I am insured with them but besides that, given my premiums have sky rocketed, I thought to myself with the la nina weather pattern ending, which tends to bring the cyclones, and moving into a el nino weather pattern chances are they maybe in for a good year.
Given the latest update I think I am right on track and already sit on some very nice capital gains....TWR investment is simple....the longer we don't get a large event the higher the share price will rise......no large earthquakes will be nice.....not a long term hold 

I guess I had similar thoughts when I invested once upon a time into CBL insurance ... Ouch.

The thing with insurance companies is that you can only assess the risks you know and understand ... and do you understand all the risks Tower is insuring against? I certainly don't.

But anyway - as any other high risk investment, there will be good and bad times. Just make sure you correctly predict the bad times before they arrive. Easy.

black peter I will let you know if I smell an earthquake coming next week,
Yep a lot of unknowns with this one.....hence the previous comment it is not a long term hold
Sitting on a reasonable cap gain buffer

echo BP's comments about premiums rising but cognisant that another major weather event is now overdue.

Quote from: snapiti on Feb 16, 2024, 02:47 PMblack peter I will let you know if I smell an earthquake coming next week,
Yep a lot of unknowns with this one.....hence the previous comment it is not a long term hold
Sitting on a reasonable cap gain buffer

You could be right ... 13th anniversary of that big quake on 22nd  ...... and full moon 25th

I'll give KennRing a buzz and find out what he thinks

Quote from: Basil on Feb 16, 2024, 03:04 PMecho BP's comments about premiums rising but cognisant that another major weather event is now overdue.

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

Superb boating conditions at the moment, that's for sure, just a "little" better than this time last year lol 

Quote from: snapiti on Feb 16, 2024, 03:53 PMthe 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?

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.

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

Quote from: snapiti on Feb 16, 2024, 06:05 PMStatically 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?

Quote from: BlackPeter on Feb 17, 2024, 10:52 AMLook 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.

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 !!

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

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

SP still on the right path

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.

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

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.

Quote from: LoungeLizard on Apr 17, 2024, 01:41 PMThought 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.

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

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

Quote from: lorraina on Apr 22, 2024, 11:11 AMwww.chrislee.co.nz
This week's "Market News" covers Tower.

Trade Windowcasvwell

Both TWR and TWL

Strong result.... holders will be happy (on top of SP appreciation of circa 40% in last 12 months)

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TWR/431819/419557.pdf

Summary of HY24:
• Gross written premium (GWP) $291m, up 20% on HY23
• Business as usual (BAU) claims ratio 49.7% vs 51.1% in HY23
• Management expense ratio (MER) improved to 31.3% vs 35.0% in HY23
• Large event costs -$1.9m vs $37.3m in HY23, due to a favourable revision to the most recent estimate for
Vanuatu cyclone claims incurred in the prior year
• Customer numbers declined 1% to 309,000 vs 312,000 in HY23 partly due to tightened risk appetite for
high-theft motor vehicle models
• Combined operating ratio (COR) including large events 80.2% vs 104.5% in HY23
• Underlying profit $36.6m vs $3.7m loss in HY23
• Reported profit $36m vs $5.1m loss in HY23
• Interim dividend 3 cents per share.

Great result, although well flagged in advance. Could be a stellar year if that large events provision goes largely untouched. Will be interesting to see how the market responds.

And the answer is - a pretty muted response from the market. ???
 The market as a whole is pretty depressed at the moment so I guess investors have little appetite for what is perceived as a boom/bust stock?   

Quote from: LoungeLizard on May 28, 2024, 01:42 PMAnd the answer is - a pretty muted response from the market. ???
 The market as a whole is pretty depressed at the moment so I guess investors have little appetite for what is perceived as a boom/bust stock?   

Last analysis from Foryth Barr as detailed above dated 17 April  noted;

Valuation support increasing

TWR trades at just 5.2x 12-month forward underlying earnings on our updated estimates, offering substantial upside to peers IAG on 16.3x 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

Even more accurate today..... in a word; Undervalued.

TA looking good.

Tower Updates Guidance

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. Tower's FY24 full year underlying NPAT guidance is expected to be greater than $40m, up from greater than $35m as previously advised.

This increase is due to a continuation of positive trading conditions including unseasonably benign weather in the past two months. While there were two storms in New Zealand in May, both had relatively insignificant claims costs for Tower, and the threshold for large events was not met.

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. Any unused portion of the large events allowance at year end will increase underlying NPAT to improve the full year result. For example, if there were no large events in FY24 underlying NPAT would be increased by an additional $32m ($45m less tax).

Nice upgrade and nice to be 'well positioned' aye Percy

Yes a very welcome bit of sunshine in a gloomy market.

Last day to receive the 3c dividend, so nice timing for an update to get a bit of buying going ;D

Big crossing of 1 mill shares today at $0.835 signalling some confidence today as the SP climbs above pre divvy levels.

Longer term holders seem less worried about major weather events as for the last 2 yrs TWR has been busy modifying premiums to reflect risk profiles of (say) coastal flood prone areas and certain frequently stolen car models etc etc.

In addition, the recent revenue upgrade means 19 cents earnings per share which at the current PE of 7.73 = SP of $1.46. Not bad aye?

Quote from: Left Field on Jun 13, 2024, 06:34 PMBig crossing of 1 mill shares today at $0.835 signalling some confidence today as the SP climbs above pre divvy levels.

Longer term holders seem less worried about major weather events as for the last 2 yrs TWR has been busy modifying premiums to reflect risk profiles of (say) coastal flood prone areas and certain frequently stolen car models etc etc.

In addition, the recent revenue upgrade means 19 cents earnings per share which at the current PE of 7.73 = SP of $1.46. Not bad aye?

Imagine if they traded at a pe of 20 which is where iag insurance trades currently.
That would be a shareprice of $3.80

Still the most undervalued share on nzx imo

A sitting duck for a larger insurance company to take over. Unfortunately probably not an aussie one due to comcom competition worries. But definite possibility for international player

Chart wise its looking well set up.  Nice breakout of its resistance zone, Moving Averages all in alignment and heading upwards, new 52 week high made. (note ASX chart used)

Screenshot 2024-06-15 140307.png

Buy the uptrends, sell the downtrends.

Quote from: Poet on Jun 13, 2024, 07:48 PMImagine if they traded at a pe of 20 which is where iag insurance trades currently.
That would be a shareprice of $3.80

Still the most undervalued share on nzx imo

Quote from: KW on Jun 15, 2024, 02:05 PMChart wise its looking well set up.  Nice breakout of its resistance zone, Moving Averages all in alignment and heading upwards, new 52 week high made. (note ASX chart used)
Buy the uptrends, sell the downtrends.

The stars are aligned.

I'm happy I opted for TWR instead of HGH.

Nice little divvy coming next week ;D 

A bit of buyer activity is keeping the SP elevated and I wonder if we'll see another positive guidance update in a month or so if there are no large events. It's calculated that NPAT goes up $2m per week from here to end  of September if the provision is unused. Could be a big payday if Mother Nature behaves.

There's also some speculation as to whether TWR could be a contender for NZX50 inclusion if the SP can continue to inch up. NPH are probably the front runners but at a current $320m cap TWR could be in the mix if the SP goes up to say 90c on the back of a exceptional result. Nothing like a bit of NZX inclusion gossip to draw the punters in  :D

More encouraging progress

https://www.nzx.com/announcements/433340

Tower and Kiwibank sign referral agreement
 
 Kiwi insurer Tower (NZX/ASX: TWR) announces it has entered into a referral agreement for general insurance products with Kiwibank for its retail banking customers. The agreement is for an initial term of five years.
 
 Under this arrangement, Kiwibank customers choosing to insure with Tower will insure their assets directly with Tower via Tower branded policies.
 
 Tower CEO, Blair Turnbull says, "We're thrilled about the opportunity to welcome Kiwibank customers to Tower and to be joining forces with another Kiwi born and bred business.
 
 "This referral agreement presents a strategic opportunity for Tower and aligns with our focus on growing our home insurance portfolio."
 
 Kiwibank Chief Executive Steve Jurkovich says, "We're excited about entering this new partnership with Tower and to be able to support our customers to have the right protection in place which goes to the heart of our purpose of Kiwi making Kiwi better off."
 
 Tower has referral agreements in place with several other New Zealand organisations, including the Kiwi Adviser Network, New Zealand Financial Services Group and Trade Me, among others. These relationships have introduced more New Zealanders to Tower products.

88c and looks to be a clear run through to 90c in the short term. Market has woken up.

Quote from: LoungeLizard on Jun 25, 2024, 03:09 PM88c and looks to be a clear run through to 90c in the short term. Market has woken up.

Hey Liz .... Who'll get to $1.00 first ......Tower or Heartland ....or maybe it should be who'll get to 90 cents first

Quote from: winner (n) on Jun 25, 2024, 03:43 PMHey Liz .... Who'll get to $1.00 first ......Tower or Heartland ....or maybe it should be who'll get to 90 cents first

Maybe this gives you an idea  Winner.....

Quote from: winner (n) on Jun 25, 2024, 03:43 PMHey Liz .... Who'll get to $1.00 first ......Tower or Heartland ....or maybe it should be who'll get to 90 cents first

TWR are on the up elevator whereas HGH are either going down or stuck between floors. Most likely they will cross each other at the $1 mark in the weeks to come.

12 month high today...... inching above 90c.

52 Week Range $0.58 - $0.905

91c. Next resistance level 93c and then it's onward to $1. Assuming that Mother Nature doesn't intervene between now and 30/9 of course. ;)

Quote from: LoungeLizard on Jul 04, 2024, 10:31 AM91c. Next resistance level 93c and then it's onward to $1. Assuming that Mother Nature doesn't intervene between now and 30/9 of course. ;)

Encouraging  crossing around 590,000 at .93c today....

Rising share price on solid volume,augers well for holders.

Great to see TWR inch over $1.00 today.

Call me crazy but I can't help comparing HGH and TWR

Both Finance sector stocks. Both much beaten down in recent times. Both undergoing considerable changes and both possibly overdue for rerating etc etc

Here's a SP comparison of the two based on both 6 months and 1 month.

Going to be interesting to see how the comparison fares in the months ahead. (Disc have so far chosen TWR for my portfolio (up 22%)  but may change my mind and switch to HGH at any stage!!)

Quote from: Left Field on Jul 22, 2024, 03:53 PMGreat to see TWR inch over $1.00 today.

Call me crazy but I can't help comparing HGH and TWR

Both Finance sector stocks. Both much beaten down in recent times. Both undergoing considerable changes and both possibly overdue for rerating etc etc

Here's a SP comparison of the two based on both 6 months and 1 month.

Going to be interesting to see how the comparison fares in the months ahead. (Disc have so far chosen TWR for my portfolio (up 22%)  but may change my mind and switch to HGH at any stage!!)

I've gone all in on TWR on the basis that their end of year report is - despite the vagaries of Mother Nature - likely to be a stunner. If the large events provision goes unused shareholders will get the double whammy - a surge in SP and a juicy dividend.

HGH though is, for now,  on a speculative bounce. More to do with projected drop in interest rates etc than any actual evidence that the business has turned the corner.

Both companies are worth a punt I think - maybe a fiver each way - but Tower for my money is still ahead coming into the home straight. ;D   

Latest ForBar research sees $1.50 conservative value in TWR

https://www.forsythbarr.co.nz/assets/publications/TWR-2024-06-12-Calm-Claims-Help-Elevate-Profit-Projections.pdf

Very cheap forward PE of only 6.5 @ $1.
Premiums have been going upwards at an alarming rate...ask me how I know  >:(
One new thing is that with the takeover of ARV almost assured, entry into the NZX 50, perhaps as early as the Sept 2024 rebalance but more likely the Dec 2024 rebalance and if not then, certainly by the March 2025 rebalance, looks absolutely assured either with or without WHS exit on possible takeover.
Just as well we know these index inclusion events have no effect on the share price...opps, hang on a minute, YES they do !
Okay...count me in for a small wager.  Lounge Lizard reckons a few bucks each way on this and HGH is a good strategy.  Both super low PE stocks...what could possibly go wrong lol. 

Quote from: Basil on Jul 23, 2024, 11:40 AMVery cheap forward PE of only 6.5 @ $1.
Premiums have been going upwards at an alarming rate...ask me how I know  >:(
One new thing is that with the takeover of ARV almost assured, entry into the NZX 50, perhaps as early as the Sept 2024 rebalance but more likely the Dec 2024 rebalance and if not then, certainly by the March 2025 rebalance, looks absolutely assured either with or without WHS exit on possible takeover.
Just as well we know these index inclusion events have no effect on the share price...opps, hang on a minute, YES they do !
Okay...count me in for a small wager.  Lounge Lizard reckons a few bucks each way on this and HGH is a good strategy.  Both super low PE stocks...what could possibly go wrong lol. 

Probably you buying  700,000 for $1.0325 today Basil !??? lol

Anyway.......... good on you..... onwards and upwards.

Quote from: Left Field on Jul 23, 2024, 01:22 PMProbably you buying  700,000 for $1.0325 today Basil !??? lol

Anyway.......... good on you..... onwards and upwards.

I'm not that brave lol

Crikey Basil..... that you buying again!?

2,667,100 crossing today at $1.04...... great endorsement.

My holding up over 30% (unrealised) in 4 months.  Interesting times ahead.

Quote from: lorraina on Jul 04, 2024, 02:58 PMRising share price on solid volume,augers well for holders.

Certainly proving to be the case.

Strategic review getting a little long in the tooth. 8ish months?

Can't have had any offers or they surely would have had to disclose.

Crikey both TWR and HGH knocking on the $1.10 door.

I have the quinella bet covered now  ;D

Quote from: Basil on Jul 31, 2024, 10:19 AMI have the quinella bet covered now  ;D

Now Tower ahead by a nose.....lol

Quote from: Basil on Jul 31, 2024, 10:19 AMI have the quinella bet covered now  ;D

Exactas pay more then you have to pick the winner and 2nd.

Quote from: Basil on Jul 31, 2024, 04:04 PMCrickey, might be a long nose of half a head by the end of the day lol

The TWR chart is a thing of beauty.  Anyone following a momentum strategy who picked it up around 63c when it broke out in February would have done very well.  No need to have bought before Feb or tried to pick the lows.

The recent moves look a bit climaxy though.  So probably overdue a pullback.  

Quote from: KW on Jul 31, 2024, 04:27 PMThe TWR chart is a thing of beauty.  Anyone following a momentum strategy who picked it up around 63c when it broke out in February would have done very well.  No need to have bought before Feb or tried to pick the lows.

The recent moves look a bit climaxy though.  So probably overdue a pullback. 

Exactly. I waited until April when the trend had really bedded in and bought at 77c. Still - a 45% return in 4 months , so no complaints. :P

There could be some profit taking I guess, but it would be a brave investor that sells now as we near end of year trading and an increasing likelihood of a big payout. Still well undervalued, so I'm hanging in there for now.

I am usually late to any party.Often leave too early,but enjoy myself while I am there...?..lol
Started buying on 15th April at 72.5 cents and 73.5 cents.
Added more on 17th April at 82 cents and topped up on 28th May at 83 cents.
Received the divie on 12th June.
The Chairman Michael Stiassny runs a good ship.He is also The Chairman of my largest holding 2CC.[which I have never stopped buying].

Quote from: lorraina on Jul 31, 2024, 07:57 PMI am usually late to any party.Often leave too early,but enjoy myself while I am there...?..lol
Started buying on 15th April at 72.5 cents and 73.5 cents.
Added more on 17th April at 82 cents and topped up on 28th May at 83 cents.
Received the divie on 12th June.
The Chairman Michael Stiassny runs a good ship.He is also The Chairman of my largest holding 2CC.[which I have never stopped buying].

Yep, pretty much my approach. I figure that if I turn up a bit late to the party I've got a better chance of telling whether I'm in for a good time or a punch-up!

Quote from: KW on Jul 31, 2024, 04:27 PMThe TWR chart is a thing of beauty.  Anyone following a momentum strategy who picked it up around 63c when it broke out in February would have done very well.  No need to have bought before Feb or tried to pick the lows.
The recent moves look a bit climaxy though.  So probably overdue a pullback. 

Just getting warmed up I think  ;) .  I think the real pleasure will come with the inevitable NZX50 inclusion in due course.  End of session report
https://www.nzherald.co.nz/business/mixed-bag-for-nz-stocks-with-micro-cap-firms-the-main-gainers-market-close/5MA2K2E7TVFHTH6HIP235UYERA/
\ Paywalled: Excerpt: According to Knight, the "highlight" of the day was Tower Insurance, which rose 4.5c or 4.19% to $1.12. Knight said he believed Tower's success was due to Craigs initiating company coverage on Tuesday at an overweight position with a target price of $1.46.
He said Craigs' private wealth network is taking an interest in it and that up until this point, it has not been a well-covered stock.
Forbar at $1.50 if I recall correctly.  Let's split the difference and call it $1.48  :)

Craigs latest

Added to conviction list and initiation of coverage. Its very detailed 39 pages

Tower of Strength: adding Tower with a 2.5% weighting
Concurrent with our research team's initiation report published overnight ( "Stake your claim"), we add Tower Insurance into the Kiwi Conviction Portfolio with a 2.5% weighting (reflecting its smaller market cap and liquidity). Tower is New Zealand's fifth largest general insurance company, with c.5% market share and over 300k customers across New Zealand and the Pacific. Following a period of significant investment under the stewardship of TWR's new management team, the Company has developed into a well capitalised, "digital-first" player in a legacy industry. While NZ is prone to natural disasters, TWR is now a market leader in risk-based pricing, which has become core to the Group's value proposition. This strategy allows TWR to 1) proactively assess the impact/risks around climate change across its book, 2) lower claims loss ratios & reinsurance costs, and 3) reduce the cross-subsidisation of high-risk policies. Given TWR is seeing operating metrics improve, has a strong runway for market share growth (in an industry with favourable dynamics), and offers a compelling prospective gross yield of 11.2%, we see the Company's current discount to industry peers as unjustified.

Compelling yield & low PE, with discount to peers unjustified
TWR benefited from benign weather in 1H24 and delivered uNPAT of $36.0m, with no large events recorded. FY24 guidance is for uNPAT of 'greater than $40m', but this assumes full utilisation of the large events allowance of $45m. With approximately two months remaining in FY24 we have assumed $17m for large events, and so our uNPAT estimate is $64m, or EPS of 16.8c. TWR is targeting FY25 uNPAT of $40-60m (CIPe $53m / EPS 13.9c). After normalising for the lower than expected claims in FY24 we estimate TWR is currently trading on a forward PE of 7.6x (vs. sector peers at 12.3x), with a forward cash dividend yield of 7.1% (9.9% gross).
In strong contention for index inclusion from Dec-24
Based on our analysis of the NZX50, we do not expect TWR to enter the index in the upcoming Sep-24 rebalance due to failed liquidity in the Mar-24 quarter. However, we we see a strong possibility of TWR being included at the Dec-24 rebalance.
Price Target $1.46
Our Price Target of $1.46 is the average of: 1) a forward PE of 9.2x ($1.61) based on TWR's historical discount to sector average PE multiples, and 2) 1.4x BV ($1.31) based on our estimate of TWR's 3-year forward ROE relative to its post-tax Ke. Our Price Target implies a forward PE of 8.1x and a cash dividend yield of 6.5% (9.0% gross).
to 1.46
%

11.2 percent gross yield FY25 estimation says Craigs.

Outperform $1.46 FB target price $1.50

Disc/ holder on fundamental's and likely NZX50 inclusion in December re balance. Added more yesterday.

Quote from: Shareguy on Aug 01, 2024, 07:37 AMTower of Strength:

Thanks for sharing mate and that sums it up very well.  Agree on December index inclusion, that's much more likely than Sept 24 or March 25.

Quote from: Basil on Aug 01, 2024, 10:35 AMThanks for sharing mate and that sums it up very well.  Agree on December index inclusion, that's much more likely than Sept 24 or March 25.

Yes, provided they aren't subject to takeover in the next few months,then it should be a very good end to the year.
Late November they will announce NPAT around $60 to $70 Million, a decent dividend and possible capital return.
Early December announcement of inclusion in NZX50 Index

Bring on a $2+ shareprice

Old saying add to your winners,sell your losers.
Well I just added to my TRW holding at $1.13.

Quote from: lorraina on Aug 01, 2024, 11:18 AMOld saying add to your winners,sell your losers.
Well I just added to my TRW holding at $1.13.

I also did the same.

Quote from: lorraina on Aug 01, 2024, 11:18 AMOld saying add to your winners,sell your losers.

Pull your weeds and water your flowers.....

I'm sure you are 'well positioned' Percy.  ;)

Viewing my investment in Tower as a natural hedge / insurance against rising premiums.  Paid $1,200 to them this morning for my new car insurance, the Mrs car is due next month as well as the house.  All free based on profits to date with plenty left over.
Used to do the same with the power companies.  P.S. Turners paid for my new car, now that's what I call a really effective natural hedge !

Respected poster KW said the TWR chart was a thing of great beauty.....

here's another way of looking at TWR compared to other random NZX icons over the last 12 months (SP appreciation... divvies not incl.)

Naaaice.

Quote from: Left Field on Aug 02, 2024, 08:25 AMRespected poster KW said the TWR chart was a thing of great beauty.....

here's another way of looking at TWR compared to other random NZX icons over the last 12 months (SP appreciation... divvies not incl.)

Naaaice.

Yes it looks good for sure. Also agree with KW it's due a pullback.

Quote from: Shareguy on Aug 02, 2024, 08:49 AMYes it looks good for sure. Also agree with KW it's due a pullback.

Agree due for some consolidation....for Traders a pull back/consolidation is maybe a concern.... for longer term holders it is BAU. The trend is your friend.

With the Warehouse takeover not happening what affect on index inclusion I wonder. NPH more a possibility. Thoughts?

Quote from: Shareguy on Aug 02, 2024, 05:04 PMWith the Warehouse takeover not happening what affect on index inclusion I wonder. NPH more a possibility. Thoughts?

See my post #56 in this thread and WHS thread post #534 today.

Tower 'Strategic Review' is still live by all accounts.

Personally, I'm ambivalent as to whether I'd welcome a takeover at this stage or not.
But one thing seems clear - if a potential suitor is running their eyes over TWR, they had better be quick to come up with an offer else the market is going to price them out of contention.

An offer at $1.50 would probably work right now, but in six month's time it will be too late.

I think the next couple of weeks is the critical window.

Also, company probably has no debt and $100m of cash on hand right now (over and above the prudential requirements)

Quote from: Left Field on Aug 02, 2024, 10:14 AMAgree due for some consolidation....for Traders a pull back/consolidation is maybe a concern.... for longer term holders it is BAU. The trend is your friend.

See Momentum thread for a discussion on this. 

Crikey another upgrade...... holders will be v happy

https://www.nzx.com/announcements/435796

Kiwi insurer, Tower Limited (NZX/ASX: TWR) now expects underlying net profit after tax (NPAT) for the financial year ending 30 September 2024 to be greater than $45m, an increase on previous guidance which was for NPAT of more than $40m.
 
 Tower's business-as-usual (BAU) claims performance has been stronger than expected since its guidance update on 11 June 2024. This is due to both the continuation of Tower's targeted underwriting actions to tackle the impacts of vehicle thefts and unseasonably benign weather in New Zealand.
 
 Gross written premium (GWP) growth is expected to be at the top end of, or exceed, current GWP guidance of 10% to 15%.
 
 This updated guidance assumes full utilisation of the FY24 large events allowance which is conservatively set at $45m. In a departure from recent norms, no large events have been recorded in the financial year to date. Any unused portion of the large events allowance at year end will increase underlying NPAT to improve the full year result. For example, if no large events were to occur in FY24, underlying NPAT would be increased by an additional $32m ($45m less tax).

Great news. Have been adding the last few days.

Craig's Thoughts

Tower have upgraded Guidance once again this morning – lifting Underlying NPAT guidance for FY24 lifted by c$5m due to lower-than-expected BAU claims to date. In early June TWR issued guidance for FY24 underlying NPAT to be 'greater than $40m'. This included full utilisation of the $45m large events allowance, but no specific detail was provided as to the level of BAU claims assumed. Guidance has now been lifted to 'greater than $45m', again assuming full utilisation of the $45m large events allowance. TWR commented the lower BAU claims was a result of unseasonably benign weather and targeted action to impact vehicle theft claims in their portfolio. In both cases TWR commented that any unused portion of the large events allowance at year end will increase underlying NPAT. For example, if there were no large events in FY24 underlying NPAT would be increased by an additional $32m ($45m less tax). As a reminder, in our recent initiation (30th July) we are forecasting uNPAT of $63.9m which assumed 1) $16.9m for large events - with only two months to go we have assumed the remaining $28.1m of the large events provision is unused and this boosts uNPAT by $20.2m) and 2) we assumed BAU claims for FY24 of 49.0% (1H 49.7% / 2H 48.3%)...... to achieve the new guidance of 'greater than $45m' we estimate the FY24 BAU claims ratio would need to be at or below 48.4% (2H 47.1% or lower). For context, in later years we assumed a long-run BAU claims ratio of 50.0%. with a slight seasonal skew to 2H (1H 48.5% / 2H 51.5%), so this 2H forecast is materially lower than we think is likely in a 'normal' year. Overall, we expect a positive share price reaction to this announcement today – but Gardiner & Carling do note that it is partly the result of benign weather and so does not change their long-term assumptions around BAU claims. Their Price Target ($1.46) is based on a forward view of the claims ratio which assumes a return to 'normal' weather patterns

Quote from: Left Field on Aug 08, 2024, 08:42 AMCrikey another upgrade...... holders will be v happy

https://www.nzx.com/announcements/435796

Kiwi insurer, Tower Limited (NZX/ASX: TWR) now expects underlying net profit after tax (NPAT) for the financial year ending 30 September 2024 to be greater than $45m, an increase on previous guidance which was for NPAT of more than $40m.
 
 Tower's business-as-usual (BAU) claims performance has been stronger than expected since its guidance update on 11 June 2024. This is due to both the continuation of Tower's targeted underwriting actions to tackle the impacts of vehicle thefts and unseasonably benign weather in New Zealand.
 
 Gross written premium (GWP) growth is expected to be at the top end of, or exceed, current GWP guidance of 10% to 15%.
 
 This updated guidance assumes full utilisation of the FY24 large events allowance which is conservatively set at $45m. In a departure from recent norms, no large events have been recorded in the financial year to date. Any unused portion of the large events allowance at year end will increase underlying NPAT to improve the full year result. For example, if no large events were to occur in FY24, underlying NPAT would be increased by an additional $32m ($45m less tax).

Hmm - just pondering to review my insurance parcel (house, content, vehicles), but it clearly sounds like Tower is one company to avoid as customer.

Pretty ridiculous to see how they pile up  their earnings on the base of overcharging their clients ...

Curious which of the insurance companies will blink first, I guess they all need some detox after the sugar rush of getting away with charging their clients an arm and a leg and some more ...

Quote from: BlackPeter on Aug 08, 2024, 05:39 PMHmm - just pondering to review my insurance parcel (house, content, vehicles), but it clearly sounds like Tower is one company to avoid as customer.

Pretty ridiculous to see how they pile up  their earnings on the base of overcharging their clients ...

Interesting you say Tower is overcharging and to be avoided.

One of the reasons I invested in TWR is that I had compared House/contents/car insurance with several providers. I chose Tower on the basis of this favourable experience (I had been with another provider.) My investment decision also took in the favourable  FA and TA factors that are currently being realised.

Mind you if you live in liquefaction/sea rise territory or own a frequently stolen car model, the insurance premium answer could be different.  FWIW I also have a friend working with AIG insurance and am informed they are busy modifying premiums to adopt TWR style risk modelling.

The bonus for me is that based on todays latest update my TWR dividend will likely more than cover my annual insurance premiums (and that doesn't count the unrealised 30% SP 'gains' over the last half year.)

Pays to keep an open mind I reckon.

I had not thought about my Tower divies covering my insurance costs,but I think they will.The bonus could be increasing divies from GFL Geneva Finance [owners of Quest Insurance].
My power company's divies cover our power usage.
My 2CC's divies more than cover my motoring costs.
Pity I can not buy shares in our local New World supermarket.lol.

WOW - can you believe it, you can and that's the ticker code.  Just need to shop at Woolworths instead  ;D

Yes agree,even get Gold Card 5% discount on a Tuesday there ,but our local New World is a lot cheaper than the nearest Woolworths.Only a small thing but Woolworths only stock big bananas.I like the smaller snack pack ones at New World.  [NW also stock big bananas].

Forgot to ask Matt Peek at Kingfish if Tower is on their radar...another company we invest in starting with T is , you know the one ;) Meeting up with management next month and made it clear he's impressed with management and their track record.

Fabulous upgrade today from Tower.

A lot to like about the other T.
Credit cycle should now see their NIM start to gain traction.
When it happens I look forward to seeing their new Christchurch site.
If it/they are anything like their Timaru one they will crackers.
 

Quote from: Left Field on Aug 08, 2024, 07:16 PMInteresting you say Tower is overcharging and to be avoided.

One of the reasons I invested in TWR is that I had compared House/contents/car insurance with several providers. I chose Tower on the basis of this favourable experience (I had been with another provider.) My investment decision also took in the favourable  FA and TA factors that are currently being realised.

Mind you if you live in liquefaction/sea rise territory or own a frequently stolen car model, the insurance premium answer could be different.  FWIW I also have a friend working with AIG insurance and am informed they are busy modifying premiums to adopt TWR style risk modelling.

The bonus for me is that based on todays latest update my TWR dividend will likely more than cover my annual insurance premiums (and that doesn't count the unrealised 30% SP 'gains' over the last half year.)

Pays to keep an open mind I reckon.

Absolutely. You should try it!

Just wanted to point out there is always a flipside to outrageous earnings ... well, at least for the poor people who have to pay for them.

I used to regularly review various insurance providers (every couple of years when the renewal was due) and didn't exclude Tower yet in these exercises. Inputs are however not just the premiums (for our specific property and needs), but as well consumer reports as well as historic company performance and communication. Interesting that Tower had after the ChCh earthquakes the largest number of Court proceedings of any insurance company, i.e. they fought as hard as they could against as many clients as they could to avoid settlement. One of their black marks. Not that I remember their premiums ever being competitive, but why would anybody pay an insurer if they know that in case of a claim they likely have to push it through the courts anyway?

I am sure some clients like insurers like that (hey, litigation can be fun ... isn't it?, but I prefer to work with insurers who care for their customers.

Maybe they are not as clear a winner as you might want to think? But sure - enjoy your dividends as long as they last.

Your comment on their dividends paying your premiums leaves me speechless. I normally pick investments based on quality (which clearly includes as well sustainable earnings potential). However - whether the earnings come from the same industry as the bills - who cares? But hey - each to their own :) ;

Ah, yes - and related to comparing Tower with their competitors - You don't need to take my word for it:

Consumer NZ is regularly comparing insurance companies. In Feb 2024 they compared 8 house and content insurance packages and for their example is Tower one of the insurers with one of the highest premiums combined with one of the lowest customer satisfaction ratings.

https://www.consumer.org.nz/services/house-and-contents-insurance/review
(probably paywalled if you are not a member, but membership is a great investment anyway)

So, yes, I can see where Towers earnings might come from ... I am just wondering how sustainable they are.

BP, I know I'm only one person but that's definitely why I'll never invest in Tower and why I'll never take policies with them either.

The huge flood in Auckland a couple of summers ago. Once Tower got a chance to get their assessors, (they were literally swamped with claims) to look at my wife's car they wrote it off and paid out very quickly.

TWR almost certain to be included in the NZX50 soon. Agree it's a cyclical business but the metrics are dirt cheap in line with that. I reckon the brokers are about right and fair value is about $1.50

Percy posted this link on the other channel.

IMO a very interesting and timely interview explaining why Suncorp sold its Banking division and opted to concentrate on Insurance.

https://www.youtube.com/watch?v=fAfms-gDIVI

ps. Also v relevant in respect of today's news re the NZ banking sector.

https://www.stuff.co.nz/business/350384870/commerce-commission-report-nicola-willis-adamant-she-wants-action-banking-sector

Quote from: Left Field on Aug 20, 2024, 04:59 PMPercy posted this link on the other channel.

IMO a very interesting and timely interview explaining why Suncorp sold its Banking division and opted to concentrate on Insurance.

https://www.youtube.com/watch?v=fAfms-gDIVI

ps. Also v relevant in respect of today's news re the NZ banking sector.

https://www.stuff.co.nz/business/350384870/commerce-commission-report-nicola-willis-adamant-she-wants-action-banking-sector

Yep, interesting stuff. TWR is certainly in the sweet spot at the moment - industry wide higher-than- inflation premium increases, unused large events provision and the prospect of NZX50 inclusion in December. All going well we might see $1.50 by year end. ;D

Forbar's thoughts today;

Index Enter Exit Expected Weight (rank)
S&P/NZX 10 no changes expected n/a
S&P/NZX 20 no changes expected n/a
S&P/NZX 50 NPH & TWR SAN & VSL 0.17% (49) & 0.27% (44)
S&P/NZX 50 Portfolio NPH & TWR SAN & VSL 0.27% (49) & 0.43% (43)

Quote from: lorraina on Aug 20, 2024, 07:55 PMForbar's thoughts today;

Index Enter Exit Expected Weight (rank)
S&P/NZX 10 no changes expected n/a
S&P/NZX 20 no changes expected n/a
S&P/NZX 50 NPH & TWR SAN & VSL 0.17% (49) & 0.27% (44)
S&P/NZX 50 Portfolio NPH & TWR SAN & VSL 0.27% (49) & 0.43% (43)

FB say we expect passive demand for NPH and TWR will be in the order of 2.7m shares (45x average daily volume [ADV]) and 9.1m (26x ADV) respectivel

That's a lot of shares to buy.

The problem is that their index constituent changes are both predicated upon liquidity concerns around the companies they think will exit the index and I can't help observe they got their most recent prediction based on liquidity concerns wrong.  The best guide to the future is the most recent past so there's a better than even chance they will be wrong again in my opinion

That said, TWR looks to be the clear favorite for index inclusion when ARV exit due to their takeover so it's just a question of when.

Also their metrics and the TA make a good case for holding so how many, if any to sell on index inclusion is another good question to ponder.

Quote from: Basil on Aug 21, 2024, 03:14 PMThe problem is that their index constituent changes are both predicated upon liquidity concerns around the companies they think will exit the index and I can't help observe they got their most recent prediction based on liquidity concerns wrong.  The best guide to the future is the most recent past so there's a better than even chance they will be wrong again in my opinion

That said, TWR looks to be the clear favorite for index inclusion when ARV exit due to their takeover so it's just a question of when.

Also their metrics and the TA make a good case for holding so how many, if any to sell on index inclusion is another good question to ponder.

Yes Craig's have eps of $.17 for this year. That report from Craig's was before the latest upgrade. Attractive metrics, then you have the index inclusion. Can you recall how much index inclusion added to Turners?

Quote from: Shareguy on Aug 21, 2024, 03:23 PMYes Craig's have eps of $.17 for this year. That report from Craig's was before the latest upgrade. Attractive metrics, then you have the index inclusion. Can you recall how much index inclusion added to Turners?

It's hard to say for sure because arguably the Turners inclusion, thanks to some timely and loud barking from some dog, was well and truly telegraphed long before it happened, and the share price went up quite a bit in the months before the formal announcement.  I think it's fair to say it added about 10%, unfortunately, some of which has been given back since.  HLG index inclusion last year was good for 27% by my calculations because it was very illiquid.    Generally, in my experience over the years inclusion is worth 5-25% on the share price of the incoming constituent and some downside on the one exiting.  The HLG event and gain thereon was quite unusual, not that I am complaining lol.

All that said, some of the index gain might already be in the TWR stock price due to anticipation because it's fairly common knowledge it's in the box seat for this pending change.

Quote from: Basil on Aug 21, 2024, 04:29 PMIt's hard to say for sure because arguably the Turners inclusion, thanks to some timely and loud barking from some dog, was well and truly telegraphed long before it happened, and the share price went up quite a bit in the months before the formal announcement.  I think it's fair to say it added about 10%, unfortunately, some of which has been given back since.  HLG index inclusion last year was good for 27% by my calculations because it was very illiquid.    Generally, in my experience over the years inclusion is worth 5-25% on the share price of the incoming constituent and some downside on the one exiting.  The HLG event and gain thereon was quite unusual, not that I am complaining lol.

All that said, some of the index gain might already be in the TWR stock price due to anticipation because it's fairly common knowledge it's in the box seat for this pending change.

Great info, thanks Basil.  Have a good position. Added more today.

Bodes well

https://www.interest.co.nz/insurance/129331/iag-nz-chief-executive-amanda-whiting-says-insurer%E2%80%99s-annual-results-showing-41

Index inclusion announced on Friday?

That would be cool

Quote from: winner (n) on Sep 02, 2024, 02:34 PMIndex inclusion announced on Friday?

That would be cool

It would be the icing on the cake, but maybe a bit soon? SP likely to see a bit of action though this week I think

As I cautioned in another thread, not sure Forsyth Barr have their index exit considerations regarding lack of liquidity in line with the Dow Jones index liquidity calculation methodology.   Not the first time they have called for an index exit on liquidity grounds and it hasn't happened so it's best to treat any future calls they make in that regard like the boy who cried wolf.  They'll be right one day, but when is frankly, anyone's guess.

No change.  The only one to get a little boost this time might be Santana minerals, (I hold some), which is added to the all companies and small companies indices https://api.nzx.com/public/announcement/437634/attachment/426689/437634-426689.pdf

Announcement to ASX - 7.20pm NZ time - nice stuff Tower......



Strategic review concludes

In December 2023, Tower commenced a strategic review exploring options to maximise value for
all Tower shareholders and optimise its capital structure to enhance competitiveness in the market.
As part of this process, the Company and its financial advisors Goldman Sachs engaged in wide-
ranging discussions with several parties regarding potential opportunities including partnerships,
risk transfer solutions and alternative ownership and capital structures.
While some of these discussions provided valuable insight and perspectives for Tower's business,
none advanced to the formal proposal stage. Consequently, the Board has decided to conclude the
strategic review.
The strategic review process did identify several initiatives including potential quota share
arrangements, that could be employed to support future growth if required.
Tower Chair, Michael Stiassny said the Board's objective in undertaking the strategic review was to
ensure the Company's ownership and capital structures remain optimal to deliver long-term value
to all shareholders.
"We have determined that the best course of action at this time is to continue executing our current
business strategy under the existing ownership structure. Although the strategic review has been
concluded, the Board remains open to considering any future proposals or opportunities that align
with the best interest of all Tower shareholders," he said.
The Company will also keep pursuing organic growth opportunities that deliver accretive value.


RBNZ removes licence condition

As of 16 August 2024, the Reserve Bank of New Zealand (RBNZ) reduced Tower's minimum
solvency margin from $15m to $0.
Level 5, 136 Fanshawe Street
Auckland 1142, New Zealand
ARBN 645 941 028
Incorporated in New Zealand
The removal of the additional solvency margin requirement recognises Tower's risk and capital
management processes, solvency position, fewer remaining Canterbury earthquake claims and the
materiality of those claims diminishing significantly over time.
Based on unaudited management accounts, Tower Limited's (Parent) adjusted solvency margin as
at 30 June 2024 was $147.2m.
Tower's current internal capital management processes and dividend policy set a target solvency
margin which is higher than the regulatory minimum required by the RBNZ. Therefore, this
reduction will not directly impact dividends or other capital management actions.
Guidance reaffirmed and intended dividend
As advised on 8 August 2024, Tower expects to report underlying net profit after tax (NPAT) of
more than $45m for the financial year ending 30 September 2024. In addition, if no large events
were to occur in FY24, underlying NPAT would be increased by an additional $32m ($45m less tax).
In accordance with Tower's ordinary dividend policy of 60-80% of adjusted earnings, the Board
intends to pay a final dividend of 5 cents per share provided it remains prudent to do so. This would
bring the full year dividend to 8 cents per share.
"The Board is mindful that the Company continues to remain focused on delivering sustainable
growth, satisfactory and proportionate profits, and consistent dividends in the future,
" Mr Stiassny
said.

Return of capital proposal

As a result of work undertaken as part of the strategic review of Tower's capital structure, assessing
current opportunities, the sale of Pacific subsidiaries, and simplification of its business, the Tower
Board has determined it is in shareholders' best interests to return excess capital to them.
The Board has approved a return of NZ$45m of excess capital to shareholders, by way of
mandatory share buyback. The return of capital is expected to deliver meaningful earnings per
share accretion to Tower's shareholders.
The return of capital will be conducted as a scheme of arrangement, and will be subject to:
• Receiving High Court approval of the arrangement; and
• Shareholder approval at the Tower Annual Shareholder Meeting in early 2025.
In addition, the return of capital will be conditional on:
• Tower receiving confirmation from the Inland Revenue Department (IRD) that the capital
return is not in lieu of a dividend;
• Tower continuing to satisfy solvency and prudential capital requirements, including under its
capital management process, up to the time the capital return is given effect; and
• The Tower Board remaining satisfied up to the time the capital return is given effect that it
remains prudent to undertake the capital return.
Given the importance of IRD confirmation, Tower will seek this before initiating the Court process.
For the avoidance of doubt, this capital return

Good work Crackity...... I had a diary note expecting a TWR update yesterday and wondered why it didn't eventuate.

Seems by your post that it turned up with ASX, but not NZX (or after NZX business hours)....... mere technicalities I guess?

Anyways the news is good for holders....

"In accordance with Tower's ordinary dividend policy of 60-80% of adjusted earnings, the Board intends to pay a final dividend of 5 cents per share provided it remains prudent to do so. This would bring the full year dividend to 8 cents per share.

ALSO a $45 mill 2025 share buyback to further improve EPS for holders.... all subject to a shareholder/IRD approval etc.

Great news for holders.

I have a thing about news releases late on Friday after market close. My theory which has stood the test of time is this is something companies do when releasing news it thinks the market won't like.

Maybe Mr market was expecting more from the strategic review such as for example an on market buyback and maybe expectations were very high for September NZX50 inclusion?

Share price reaction next week will be interesting.
Disc: Holding approx 2.5% portfolio allocation

All that spare cash ....suppose better to give to shareholders rather than give customers back some of the excessive premiums they've been charged

Quote from: Basil on Sep 07, 2024, 09:34 AMI have a thing about news releases late on Friday after market close. My theory which has stood the test of time is this is something companies do when releasing news it thinks the market won't like.

Maybe Mr market was expecting more from the strategic review such as for example an on market buyback and maybe expectations were very high for September NZX50 inclusion?

Share price reaction next week will be interesting.
Disc: Holding approx 2.5% portfolio allocation

Hey Basil.
Yes news on a Friday after market closes is usually bad news but in this case it looks like they were waiting to see if there would be a inclusion into nzx50 as that ups the price and finding the 10% for the payout a little harder if the price jumps to $1.50.   I still think if they are going to do the payout they better be quick as it's going to start moving again on Monday.  Happy holder

From Craigs

In strong contention for index inclusion from Dec-24
Based on our analysis of the NZX50, we do not expect TWR to enter the
index in the upcoming Sep-24 rebalance due to failed liquidity in the Mar-24
quarter. However, we we see a strong possibility of TWR being included at
the Dec-24 rebalance.

Anyone care to speculate on what this extract from the PR means?

It has me stumped.

''The strategic review process did identify several initiatives including quota share arrangements that could be employed  to support future growth if required''

Quote from: Poet on Sep 07, 2024, 12:05 PMAnyone care to speculate on what this extract from the PR means?

It has me stumped.

''The strategic review process did identify several initiatives including quota share arrangements that could be employed  to support future growth if required''

What is Quota Share Reinsurance?

Quota share reinsurance is a type of reinsurance agreement in which the insurer cedes a fixed percentage of each insurance policy to the reinsurer. This means that the reinsurer is responsible for paying a fixed percentage of the losses incurred by the insurer, and also receives a corresponding percentage of the premium. Quota share reinsurance is often used by insurers to reduce their risk exposure, while still retaining a portion of the premium. For example, an insurer has a quota share agreement with a reinsurer for 30%. The insurer collects $10,000 in premiums and pays out $5,000 in claims. The reinsurer receives $3,000 of the premium payments and is responsible for covering $1,500 of claims.

So what effect will the compulsory buyback have on eps ?

Forbar reckon market cap at $1.12 is $425m on 379.48m shares and their FY26 guidance, $70.3m after tax (the first full year effect on eps after the buyback), is 18.52 cps, (that's their forecast before this buy-back was announced).  $45m at, (just sticking with $1.12 to make the maths easy), reduces the number of shares on issue by 10.58% (40.15 million shares) and there would be 379.48-40.15m = 339.33m shares remaining.  $70.3m NPAT on 339.33m shares = 20.72 cps = 11.9% improvement in eps.  FY26. Forward PE at $1.14 = 1.14 / .2072 = only 5.5 !  Cool as, bargain of the century some would say but how on earth do you forecast profits in this industry with the number and extent of future extreme weather events totally unknown?
Holding mine mainly as a hedge against their significantly increased insurance premiums.

Quote from: Shareguy on Sep 07, 2024, 12:15 PMWhat is Quota Share Reinsurance?

Quota share reinsurance is a type of reinsurance agreement in which the insurer cedes a fixed percentage of each insurance policy to the reinsurer. This means that the reinsurer is responsible for paying a fixed percentage of the losses incurred by the insurer, and also receives a corresponding percentage of the premium. Quota share reinsurance is often used by insurers to reduce their risk exposure, while still retaining a portion of the premium. For example, an insurer has a quota share agreement with a reinsurer for 30%. The insurer collects $10,000 in premiums and pays out $5,000 in claims. The reinsurer receives $3,000 of the premium payments and is responsible for covering $1,500 of claims.

That reads like they they give away 30% of everything...ie profif down 30% plus depending on cost base

Or is it a case I just don't get it

Quote from: Basil on Sep 07, 2024, 12:49 PMSo what effect will the compulsory buyback have on eps ?

Forbar reckon market cap at $1.12 is $425m on 379.48m shares and their FY26 guidance, $70.3m after tax (the first full year effect on eps after the buyback), is 18.52 cps, (that's their forecast before this buy-back was announced).  $45m at, (just sticking with $1.12 to make the maths easy), reduces the number of shares on issue by 10.58% (40.15 million shares) and there would be 379.48-40.15m = 339.33m shares remaining.  $70.3m NPAT on 339.33m shares = 20.72 cps = 11.9% improvement in eps.  FY26. Forward PE at $1.14 = 1.14 / .2072 = only 5.5 !  Cool as, bargain of the century some would say but how on earth do you forecast profits in this industry with the number and extent of future extreme weather events totally unknown?
Holding mine mainly as a hedge against their significantly increased insurance premiums.

Thanks for working that out Basil. As you say only a question of time before the next event. I guess the quota share will reduce risk from an earnings point of view. And will help insulate the business and allow more consistency in earnings. The downside will be less profit in years without large events.

Surprise surprise

https://www.nzx.com/announcements/437648

Quote from: Left Field on Sep 09, 2024, 08:36 AMSurprise surprise

https://www.nzx.com/announcements/437648

FB likes it

Our revised spot valuation increases by +26 cents to NZ$1.70. TWR's market valuation remains very undemanding, trading at just 7.1x FY25 PE. If execution continues as we expect, further capital returns are likely to occur in future years, alongside its already strong dividends, with a forecast FY25 gross yield of 11%.

Market likes what they're hearing re. dividend, buy-back and projected EPS growth. $1.20 as I type. Happy days.

Quote from: Shareguy on Sep 09, 2024, 08:44 AMFB likes it

Our revised spot valuation increases by +26 cents to NZ$1.70. TWR's market valuation remains very undemanding, trading at just 7.1x FY25 PE. If execution continues as we expect, further capital returns are likely to occur in future years, alongside its already strong dividends, with a forecast FY25 gross yield of 11%.

Good ramp by Forbar, their house position must be huge.  Amazing how they think they can predict the weather in the years ahead and noting TWR's amazing forecast dividend yield with not a mention of how shockingly bad the dividend yield has been in the past caused by prior extreme weather events.  Obviously they believe we're going into the global cooling cycle and all the extreme climate change events we've had in recent years are done and dusted, never to repeat again.  I hope they're right as I don't want another summer of boating ruined like the non-summer of 2023.
Holding some Tower a good hedge against their rampantly increasing insurance premiums.

Quote from: Basil on Sep 09, 2024, 10:55 AMGood ramp by Forbar, their house position must be huge.  Amazing how they think they can predict the weather in the years ahead and noting TWR's amazing forecast dividend yield with not a mention of how shockingly bad the dividend yield has been in the past caused by prior extreme weather events.  Obviously they believe we're going into the global cooling cycle and all the extreme climate change events we've had in recent years are done and dusted, never to repeat again.  I hope they're right as I don't want another summer of boating ruined like the non-summer of 2023.
Holding some Tower a good hedge against their rampantly increasing insurance premiums.

It's a risk/reward type of stock and yes, there's always a chance of a really bad weather year, in which case no dividend is paid at all. But they have something like $750m re-insurance for two large events per annum and I believe they've prudently added coverage for third event. Then you have TWR's own large event provision and that adds up to good coverage for a fairly bad year. And of course, premiums have gone up something like 25%!

But there's always that risk of a "one in a hundred years" event which seems to be more like a "one in ten years" which could change things overnight. Risk and reward...risk and reward....

Premiums have certainly shot up.
Metservice put a lot of their weather guys on contract many years ago and for many years I used to do the books of a guy who sent up weather gathering ballons twice a day.  Anyway after working for Metservice for just over 50 years he eventually retired and got a gold watch and a nice send off.

At our final meeting when I'd completed his last set of books I asked him after gathering all that data over 50 years whether he thought climate change was real.  He said there's so much evidence it is you're likely to get one in 100 year events every second year or so now.   I hope he's wrong as I like enjoying my summers and don't like insurance premiums going up at vastly more than the inflation rate.  Insurance is becoming a significant cost for families now so I am just hedging my risk here so in the years that I am heavily overcharged for the risks that didn't materialize, I get it fed back to me in dividends.

When assessing stocks for their income potential I think people are best to look at the average dividend paid over the past 5 years and then ask if its a), sustainable, and b) likely to either increase or decrease in the next 5 years.  I think the Jury is out on whether their rate of insurance premium increases taking into account the ever-worsening effects of climate change, is likely to lead to higher average dividends in the years ahead.  Wise to look at the average level of dividends as insurance by its very nature, is an average process.

Alpine fault could be the bigger issue..... (touching wood)

https://www.rnz.co.nz/news/national/491430/alpine-fault-s-potential-dangers-are-real-but-still-unknown

Quote from: Basil on Sep 09, 2024, 12:12 PMPremiums have certainly shot up.
Metservice put a lot of their weather guys on contract many years ago and for many years I used to do the books of a guy who sent up weather gathering ballons twice a day.  Anyway after working for Metservice for just over 50 years he eventually retired and got a gold watch and a nice send off.

At our final meeting when I'd completed his last set of books I asked him after gathering all that data over 50 years whether he thought climate change was real.  He said there's so much evidence it is you're likely to get one in 100 year events every second year or so now.   I hope he's wrong as I like enjoying my summers and don't like insurance premiums going up at vastly more than the inflation rate.  Insurance is becoming a significant cost for families now so I am just hedging my risk here so in the years that I am heavily overcharged for the risks that didn't materialize, I get it fed back to me in dividends.

When assessing stocks for their income potential I think people are best to look at the average dividend paid over the past 5 years and then ask if its a), sustainable, and b) likely to either increase or decrease in the next 5 years.  I think the Jury is out on whether their rate of insurance premium increases taking into account the ever-worsening effects of climate change, is likely to lead to higher average dividends in the years ahead.  Wise to look at the average level of dividends as insurance by its very nature, is an average process.

One in a hundred year events could become one in every two or so years? Good God, I hope not. Does that mean we shall see a truly cataclysmic once-in-a-thousand year global event every few decades?? Perhaps there might be a gap in the market for an Ark building business?

I get what you're saying about looking at averages - SP/dividends - over the last five years. Seems to work when companies are generally on a steady, predictable growth path (with the occasional blip) but not so much with companies whose record is all over the place due to say, bad management (WHS) or overly ambitious and risky expansion (WHS again, KMD). These sort of companies are truly a lottery that defy averaging.

TWR are well run and know how to mitigate the risks and could well be $1.50 in the near future. Or they could fall back to $1 if the weather gods don't play ball. I'm sitting tight to bank the divvy and see how the share buyback progresses, then will re-evaluate my holding.

Quote from: Basil on Sep 09, 2024, 12:12 PM...When assessing stocks for their income potential I think people are best to look at the average dividend paid over the past 5 years and then ask if its a), sustainable, and b) likely to either increase or decrease in the next 5 years. 

I like your useful stock assessment questions. 

However, when I asked the same Q's  6 months ago I came up with a strong preference to TWR (quite at odds to your preference for HGH.)

Interestingly, since that time the market seems to agree...... as the following comparison shows.

Winner says $1.50 to $2.00 to come for TWR and who am I to argue.  (plus nice divvies along the way.)

Disc - well positioned.

Quote from: LoungeLizard on Sep 09, 2024, 12:42 PMDoes that mean we shall see a truly cataclysmic once-in-a-thousand year global event every few decades?? Perhaps there might be a gap in the market for an Ark building business?

LOL everyone ridiculed Noah.  As BP would say, predicting the future is fraught with risk and who really knows.

Quote from: Left Field on Sep 09, 2024, 02:35 PMHowever, when I asked the same Q's  6 months ago I came up with a strong preference to TWR (quite at odds to your preference for HGH.)

Luck plays a part in investing, no question about it.  The sun has shone for TWR this year and its been raining cats and dogs for HGH.  Who's to say it won't be the other way around next year ?

Certainly, I think it's a very "brave" call for any brokerage to issue a profit forecast of significant growth for TWR with unknown weather event frequency or the extremity of same.  I haven't read their report but I do hope when they are highlighting the 11% projected gross yield, they pointed out the risks associated with that and their prior poor track record.
Average of 3 analysts covering HGH, from Market screener has eps growing in the years ahead from 9.8 cps in FY24 to 12.16 cps, 15.34cps and 17.22 cps in FY27.  Of course, that's subject to reasonable recovery in the economic weather, which with the OCR set to decline rapidly in the next couple of years is arguably somewhat more reliably able to be forecast than the weather itself. 

All that said, I bought a few more Tower today because there's one indisputable fact, the buyback will add materially to eps in the future, whatever that eps is and then of course there's the index inclusion to come.    How much of the index inclusion is already in the price is anyone's guess.
Most of my holding is simply an insurance against ever increasing insurance premiums.  The irony of taking an investment position insuring / hedging against rapidly rising insurance premiums isn't lost on me.

Quote from: Basil on Sep 09, 2024, 04:42 PMLuck plays a part in investing, no question about it.  The sun has shone for TWR this year and it's been raining cats and dogs for HGH.  Who's to say it won't be the other way around next year ?

Speaking of luck....... One could say HGH is just as prone to bad luck and climate change risks as TWR.

- HGH's livestock loan book is subject to climate change risks of bush fires, floods, drought and diseases etc
- HGH's Reverse Mortgage loans on residential properties are subject to  floods, fires, EQ damages etc
- HGH's vehicle loans subject to....floods, fire, hail , theft, bad debts  etc
- HGH revenue growth subject to current Aussie low GDP growth etc

Is HGH really a better no-risk lucky proposition than TWR?

Perhaps the smarter you invest,  the luckier you get.

Craig's latest

Assuming there are no large events in the next c.3-weeks (prior to TWR's balance date - 30 Sep), the Group's uNPAT is expected to lift by $32m ($45m less tax). On this basis, it now appears likely that our FY24 uNPAT forecast of $63.9m, which factors in 1 large event (costing $16.9m), will be too light

Quote from: Left Field on Sep 10, 2024, 07:08 AM- HGH's livestock loan book is subject to climate change risks of bush fires, floods, drought and diseases etc
- HGH's Reverse Mortgage loans on residential properties are subject to  floods, fires, EQ damages etc
- HGH's vehicle loans subject to....floods, fire, hail , theft, bad debts  etc
- HGH revenue growth subject to current Aussie low GDP growth etc

Many of those risks are carried by insurance companies.  Try getting a loan, whether it's a home, vehicle, business or livestock without insurance cover and see how far you get with the application.

Quote from: Basil on Sep 10, 2024, 12:39 PMMany of those risks are carried by insurance companies.  Try getting a loan, whether it's a home, vehicle, business or livestock without insurance cover and see how far you get with the application.

Brilliant Basil.  Now you're getting the idea. Sounds like a good business plan.

That's why Suncorp got out of Banking to concentrate on Insurance.......(and why I questioned your statement "Luck plays a part in investing, no question about it.  The sun has shone for TWR this year and its been raining cats and dogs for HGH.  Who's to say it won't be the other way around next year ?")

https://www.smh.com.au/business/banking-and-finance/suncorp-to-concentrate-on-affordable-insurance-after-divesting-bank-ceo-says-20230116-p5cctz.html

ANZ seem to be doing very well after buying their banking operations.
Here's a "radical" theory.  Maybe there's good money in banking and insurance  :P   Turners seem to be doing more than okay offering finance and insurance.

Another good day at the office, after SP action seemed to have stalled.

Quote from: LoungeLizard on Sep 11, 2024, 06:02 PMAnother good day at the office, after SP action seemed to have stalled.

Index inclusion and share buy back to come.....  SP won't stall for long.

But wait......there's more................5 cent divie for Christmas too....

All these gurus in agreement, dirt cheap fundamentals, brilliant looking TA, NZX50 index inclusion looking certain before Christmas,, record financial result and final dividend and buy-back to come and last but not least Forbar reckon worth $1.70 and we know they're always conservative lol.
What could possibly go wrong, seems too easy and a one way bet.  Heck, even my good mate KW encouraged me to get more today and that tipped the scales, who am I, just a mere Beagle to resist all these factors, so I even talked myself into believing all the hype and got some more today.  What could possibly go wrong lol  Winner reckons as much as $2.  Maybe he's right ?

Gosh its a Winner(->*.nn)! 

Nobody at all wanting to sell. Too much good news on the horizon - a juicy dividend, share buyback and index inclusion. There's talk of $1.50 - or even more - by Xmas and they could well be right.

NZX50 index inclusion highly likely to happen on 22 October 2024, watch out for the action in the 15 minute closing match process on 21 October.
I've had my Beagle nose to the ground and found something interesting that leads me to conclude there's a very good chance of above happening in my opinion.

My thesis is as follows and has not been well recognized in terms of timing by the brokers yet.
Craigs and Forbar have Tower in the box seat as next cab off the rank for index inclusion.  It's a very clear and comfortable first place for inclusion with considerable daylight between it and the second and third place contenders, Briscoes and Napier Port.  I have seen Forbar's index research and in my opinion their index stuff is second to none, notwithstanding they got liquidity concerns wrong recently.

Both brokers have said its highly probable Tower will enter the index at the next rebalance in mid December but here is what they are missing.  Tower is highly likely to enter the index as soon as one of the constituent members exits it.  So which company will be next to exit the index and when will that happen?

Arvida are under takeover offer and its widely anticipated the completion of same is a near certainty.  There's a special meeting later this month.  The scheme implementation booklet is here.
https://api.nzx.com/public/announcement/437138/attachment/426102/437138-426102.pdf
Page 6 Last day of trading in Arvida Shares 21 October 2024 (Arvida Shares are expected to be suspended from trading on
the NZX Main Board from close of trading on this date)
Shortly before this date, (from memory under takeovers its less than the usual 2 weeks notice with index rebalancing) Dow Jones S&P indices will announce Tower as the replacement for Arvida effective 22 October.  There is likely to be a shorter window for the usual scramble for index tracking funds to buy in and the final 15 minute match price process on 21 October could be very interesting.

How much of this is known to institutions already is anyone's guess as is the question of how much general index inclusion premium is already in the price.  Index inclusion at this time is not certain and is subject to Arvida shareholders voting in favour of the takeover.  Please exercise caution with thinking this insight of index inclusion and its likely timing is sure to lead to future profits.  The shares have already gone up a heck of lot this year.

Great post Basil.

I would have thought that most funds would not start buying until there is certainty. Apart from the inclusion the fundamentals are excellent with only a couple of weeks of the year to go. The buyback alone is worth 12 cents a share.

I agree Shareguy which is why I've added a few more this week.  Index tracking funds are reactive to news, not proactive.

Difficult to know how much of the index inclusion is already priced in - there has been a heck of a lot of SP action in recent weeks and it can't just be us gifted individuals who are in the know :D
But I do agree there will be some sort of bump - whether it's a big one like with HLG, or not so much as in TRA we will have to see.
Regardless, the fundamentals are compelling, the TA is as they  say "a thing of beauty' , there's a divvy to come and as noted the buyback will be worth something like 12c per share. Those who got in early have made a mint, but there's still money to be made I feel.

The share buy back will mean fewer shares being on issue,which should result in eps and dps increasing..

See how much easier it is to make money when you dont buy shares in a downtrend?   ;D 8)

Even easier, just give the guys at Discovery your money and let them do all the work for awesome returns.

excerpt "Tower estimates it will pay 11.7% of total income for reinsurance cover in FY25 down from 13.9% in FY24. "
https://www.nzx.com/announcements/438509

QuoteComment from the other channel
This has got to be good.  Gross written premium was $511m last year, so 2.2% is over $11m??

Maybe more than $12m extra profit based on FY25's expected gross premiums ?

I added a few more today at $1.225,as I do not think any of us, including Forbar or Craigs expected this extra profit..

Here's the full text of today's notice..... good news for holders.......Towers 'risk based' premiums working well.

Successful placement of FY25 reinsurance programme
 
 Kiwi insurer Tower (NZX/ASX: TWR) has successfully renewed its reinsurance programme for FY25. The Company has secured comprehensive cover at competitive rates for its home, motor, boat and commercial portfolios across New Zealand and its Pacific markets.
 
 Tower CFO Paul Johnston says Tower's reinsurance arrangements are designed to provide financial protection from large events volatility and maintain financial flexibility to support growth, while underpinning strong solvency.
 
 "Tower's focus on risk-based pricing combined with our dynamic rating ability helped us secure favourable terms for our FY25 reinsurance. We've further strengthened relationships with global reinsurers, with several agreeing to new multi-year arrangements, which provides greater long-term certainty of reinsurance costs and catastrophe excesses."
 
 FY25 reinsurance programme
 
 To support growth and align with its prudent risk appetite, Tower has:
 • Increased its catastrophe upper limit to $800m (from
 $750m)
 • Expanded cover for a third catastrophe event to $85m (up
 from $75m in FY24)
 
 For FY25, Tower's catastrophe reinsurance excess is:
 • $18.75m for the first two events (up from $16.9m in FY24,
 due to expiring multi-year arrangements)
 • $20m for a third event (unchanged from FY24)
 
 Tower estimates it will pay 11.7% of total income for reinsurance cover in FY25, down from 13.9% in FY24.
 
 "We're pleased to have secured a comprehensive reinsurance programme with stable excesses and pricing. This will help Tower maintain competitive pricing for customers," says Mr Johnston.
 

https://api.nzx.com/public/announcement/431819/attachment/419559/431819-419559.pdf
This has got to be good.  Gross written premium was $511m last year, so 2.2% is over $11m??[/quote]
Maybe more than $12m extra profit based on FY25's expected gross premiums ?
Just updating that a bit because I was relying on someone else's figures and they were referring to 2023 gross revenue.  For the current year, a straight doubling of the interim gross written premium $269.4m, see link attached, would be $538.9m gross premiums.  Assuming gross premiums move in line with inflation of (currently 3.3% for 2025) and noting they have been increasing at a much faster rate than inflation in recent years), gives $556.7m gross premiums and the 2.2% reduction in the percentage going to reinsurers would boost net profit before tax by $12.25m and I believe that's quite a conservative figure and could conceivably go above $13m depending on the rate at which insurance premiums increase.
Just thought it would be good to try and put a reasonably based forecast on it based on more current numbers.  I suppose being a bean counter I couldn't help myself crunching the numbers.

Tower gained 1.5c to $1.225 after renewing its reinsurance programme for the 2025 financial year and increasing its catastrophe upper limit to $800m, from $750m, as well expanding cover for a third catastrophe event to $85m, up from $75m.

Tower's catastrophe reinsurance excess is $18.75m for the first two events and $20m for a third one. It will pay 11.7% of total income for reinsurance cover, down from 13.9% in the previous year.

Goodson said Tower looks to be heading for a significant profit upgrade next year as the reinsurance was replaced at cheaper rates than analysts expected.

Fbar latest

We make cuts to our reinsurance cost estimates for FY25 and FY26, leading to earnings upgrades. Our blended spot valuation rises +8cps to NZ$1.78, representing ~10x our new underlying EPS estimate for FY25.

Thanks for sharing, Shareguy.   Just a reminder that the Arvida ASM is tomorrow with the vote on the takeover happening.  My expectation is the takeover will be approved by shareholders.  If all goes to plan the last day of trading for ARV shares is scheduled for 21 October and I expect an announcement from Dow Jones S&P indices regarding TWR replacing ARV in the NZX50 approx 5 trading days beforehand.  How much of this index inclusion hope is already built into the share price, is anyone's guess.

Quote from: lorraina on Sep 23, 2024, 03:51 PMI added a few more today at $1.225,as I do not think any of us, including Forbar or Craigs expected this extra profit..

I did the same today because the reinsurance thing has not been factored in by the market, yet.
Not sure how widely known this is so I'm posting this in here.
https://www.insurancebusinessmag.com/nz/news/breaking-news/two-companies-continue-to-dominate-general-insurance-market-503739.aspx
My opinion is IAG and Suncorp who absolutely dominate the market here are not interested in passing on the savings from benign weather event years, they're in it here to make money and they take no prisoners.  This leaves the gate wide open for Tower in terms of its margins and profitability going forward.   The gate is open so wide there appears to be little in the way of any form of restraint in terms of lack of competitive pressure so owning some shares in Tower, as previously mentioned, is a very good way to hedge against rapidly rising insurance premiums.   I now own more than sufficient Tower such that for the first time in my life I want my insurance premiums to go up at faster than the rate of inflation lol

Well Craig's latest is out

Quote from: Shareguy on Sep 24, 2024, 04:56 PMWell Craig's latest is out

And what did they say?

Target price increases from $1.46 to $1.67
Rating OVERWEIGHT.
NZX50 inclusion in Dec 2024 or March 2025 but some dog thinks he has sniffed this out more thoroughly and knows better  ;) 

I will try again

Craig's latest. Very positive

While the stock has rallied c.17% since we initiated in late Jul-24, we continue to see value on the table, given TWR 1) trades at a 38% discount to peers (historically -25%), 2) offers a 10.2% gross yield (7.3% cash), and 3) has a number of short-term catalysts (incl. NZX50 index inclusion in either Dec-24 or Mar-25 and a $45m capital return). Maintain Overweight.

Having assumed there are no large events in the next week, we lift our FY24 uNPAT forecast by 23% to $78.8m and our dividend forecast from 7cps to 8cps for FY24. Incorporating TWR's lower than expected reinsurance costs, our uNPAT forecasts for FY25/26 lift by 13%/4% to $59.2m/$72.1m respectively. In early Sep-24 TWR announced that the Board are looking to return $45m to shareholders (likely in Mar-25), by way of mandatory share buy-back (see page 3). Given the buy-back is still subject to IRD approval, and is conditional on TWR satisfying solvency and prudential capital requirements, we exclude this from our forecasts for the time being.

Outperform $1.67

More than 99% of votes cast supported Arvida's takeover which has just been approved this afternoon.
https://api.nzx.com/public/announcement/438860/attachment/428081/438860-428081.pdf
See my earlier comments for the implications for Tower and the likely estimated timing of NZX50 inclusion.
https://www.nzx.com/announcements/438860

Shareholders in Arvida Group Limited (Arvida) have today voted in favour of the scheme of arrangement under which all Arvida shares would be acquired by Stonepeak Alps BidCo Limited (Stonepeak BidCo) at NZ$1.70 per share (Scheme).

Commenting on the Scheme, Arvida Chair Anthony Beverley said, "The Board was unanimously in favour of this proposal, and it is pleasing to see shareholders have overwhelmingly supported the Scheme in terms of both those voting in favour of the Scheme and the number of shareholders voting."

Voting Results

The resolution to approve the Scheme was passed by the requisite majorities of shareholders – 75 per cent or more of the votes cast in each interest class and more than 50 per cent of the total number of Arvida shares on issue.

Voting results of the Scheme meeting today are detailed in the attachment to this announcement.

Timetable

The Scheme remains subject to receipt of a 'no objection statement' from the Takeovers Panel[1], approval under the Overseas Investment Act and final orders of the High Court (Regulatory Approvals), with these Regulatory Approvals currently expected to be obtained by late-October 2024, and satisfaction of other customary completion conditions.

If the Regulatory Approvals are received prior to 17 October, the date currently scheduled for the final court hearing, it is anticipated that the Scheme will be implemented, and shareholders will be paid NZ$1.70 per share on or around 13 November 2024.

Shareholders do not need to take any further action at this stage. Shareholders will be notified of the dates for implementation of the Scheme following receipt of the Regulatory Approvals.

My comment on timetable - If everything tracks according to the original scheme implementation agreement booklet the last day of trading of Arvida shares will be 21 October 2024.

SP hits $1.30. Very glad to have backed the truck up on this one, the obvious risk notwithstanding. Methinks the projections around $1.50 might turn out to be a bit light, given all the good news to come. Who'd have thought Tower would have been the shining light on the NZX?

Well done.  Craigs $1.67 and Forbar @ $1.78 seem reasonable to me in light of the dominance of the major market players, as noted in link in post #157 above, their metrics and their ongoing determination to get strong returns on capital.   The gate is wide open for Tower to continue to increase insurance premiums at faster than the rate of inflation and get ongoing decent returns on capital in the years ahead.

Quote from: Basil on Sep 24, 2024, 06:24 PMTarget price increases from $1.46 to $1.67
Rating OVERWEIGHT.
NZX50 inclusion in Dec 2024 or March 2025 but some dog thinks he has sniffed this out more thoroughly and knows better  ;) 

Decent volume going through on the NZX. $1.30 held. Only a few days left of the year and I can't see any potential disasters coming. As of today Craig's still saying Dec 2024 or March 2025 for index inclusion. Only regulatory approvals left with Arvida.  Timing being key, so will be interesting if you are right Basil.

Quote from: Basil on Sep 27, 2024, 12:54 PMWell done.  Craigs $1.67 and Forbar @ $1.78 seem reasonable to me in light of the dominance of the major market players, as noted in link in post #157 above, their metrics and their ongoing determination to get strong returns on capital.   The gate is wide open for Tower to continue to increase insurance premiums at faster than the rate of inflation and get ongoing decent returns on capital in the years ahead.

Absolutely - congratulations to all traders and speculators who were lucky with this stock this year. A friendly god send the climate catastrophies this year to Europe (flooding and wild fires), Asia (heat waves, cyclones & flooding), Americas (tornadoes and wild fires) and Africa (droughts and landslips) - i.e. all good in old NZ, we can cash in - and no doubt this lucky streak will never change!

I recon the challenge for holders is now to get out before increased competition will reduce margins (probably easy to predict) and before the next big climate event hits our shores (latter is harder to predict).

Anyway - anybody who bought in at the bottom and cashed out right now had an opportunity to double their money. This is good.

Quote from: BlackPeter on Sep 27, 2024, 04:00 PMAbsolutely - congratulations to all traders and speculators who were lucky with this stock this year. A friendly god send the climate catastrophies this year to Europe (flooding and wild fires), Asia (heat waves, cyclones & flooding), Americas (tornadoes and wild fires) and Africa (droughts and landslips) - i.e. all good in old NZ, we can cash in - and no doubt this lucky streak will never change!

I recon the challenge for holders is now to get out before increased competition will reduce margins (probably easy to predict) and before the next big climate event hits our shores (latter is harder to predict).

Anyway - anybody who bought in at the bottom and cashed out right now had an opportunity to double their money. This is good.

Agreed. Not usually my kind of stock - high risk/return - but I got in as the odds lengthened on big event occurring as the year progressed. I think there's more to run yet with index inclusion and a divvy to come so no way would I be selling just yet, but for me it's still a bit too risky as a long term hold. That's despite the insurance industry generally having a golden moment and TWR having already got substantial re-insurance lined up. It'll all be decided by the weather gods I guess.

Quote from: BlackPeter on Sep 27, 2024, 04:00 PMI recon the challenge for holders is now to get out before increased competition will reduce margins

Have a read of that link I posted @ post #157  There's actually very little competition and the market is dominated by IAG, (which own a large number of brands giving apparent competition which doesn't exist between those brands and Suncorp).  Agree we've been fortunate with the weather this year but you could also say the extremely wild weather of the Summer of 2023 was a once in a several years - decade thing.  (I certainly don't buy the one in 100-year thing) but a cyclone like that and a major deluge that hit Auckland in late January 2023, unlike anything I have ever experienced in my lifetime before in Auckland and I have lived here for just on 50 years...weather that bad certainly doesn't hit all that often.  I'm planning on taking the boat to Gt Barrier Island late January - early February 2025 so I have my fingers crossed for no heavy weather this summer.  That said I agree the reality of climate change is these things will become more frequent but maybe the huge increases in premiums in recent years already fully account for that ?

Quote from: Shareguy on Sep 27, 2024, 03:16 PMDecent volume going through on the NZX. $1.30 held. Only a few days left of the year and I can't see any potential disasters coming. As of today Craig's still saying Dec 2024 or March 2025 for index inclusion. Only regulatory approvals left with Arvida.  Timing being key, so will be interesting if you are right Basil.

90%+ chance in my opinion but there's a bit of chatter on the other channel about the increased volumes and a suggestion some institutions are front running the index inclusion, buying and warehousing the stock for the passive index tracking funds.  Who knows whether that talk has substance to it as most brokers still seem to be thinking it's a December or March prospect.

Quote from: Basil on Sep 27, 2024, 09:43 PM90%+ chance in my opinion but there's a bit of chatter on the other channel about the increased volumes and a suggestion some institutions are front running the index inclusion, buying and warehousing the stock for the passive index tracking funds.  Who knows whether that talk has substance to it as most brokers still seem to be thinking it's a December or March prospect.

Yes it's hard to know. Would of thought most of the buying for index funds would be based on certainty. Craig's have an eps of 21 cents for FY24 which is impressive.

The fundamentals scream cheap, even at $1.30. However we all know that the next big event is just a question of timing so I believe caution is warranted.

Caution yes but we also need to caution against something called recency bias. That's probably what stopped me getting in earlier. The huge floods of January 2023 followed by the huge cyclone of Febuary 2023 and their devastating effects for many are still fresh in people's memory so recency bias ( a bias that something really bad that happened recently tends to make us think it will happen again soon) is also something we need to be cognizant of.

If we go back over say the last 10 years, how many of these severe types of events have we had?

Maybe premiums going up so much in recent years means Tower are likely to overcompensate on average for the risk in the years ahead ?

Quote from: Basil on Sep 28, 2024, 12:45 PMCaution yes but we also need to caution against something called recency bias. That's probably what stopped me getting in earlier. The huge floods of January 2023 followed by the huge cyclone of Febuary 2023 and their devastating effects for many are still fresh in people's memory so recency bias ( a bias that something really bad that happened recently tends to make us think it will happen again soon) is also something we need to be cognizant of.

If we go back over say the last 10 years, how many of these severe types of events have we had?

Maybe premiums going up so much in recent years means Tower are likely to overcompensate on average for the risk in the years ahead ?

The total cost of large weather events for last ten years net of reinsurance was $125m according to last year annual report presentation.
I guess need to add kaikoura eq as well to get a full picture.
Nowadays eqc picks up first $300k plus gst of eq claims and I believe eqc pays the insurance companies to manage the claims on behalf, so you might see scenario where a moderate eq is actually profitable for ins companies

Good info, thanks Poet.  It feels to me like insurance premiums have gone up double digits for a few years now, and given neither IAG or Suncorp are likely to want to pass on any savings from benign weather years anytime soon, maybe the new premium levels more than fully compensate for the effects of climate change ?   

Just hope that not too many people in East Otago are insured with Tower. Otherwise - the best time to sell these shares might be - right now.

https://www.odt.co.nz/news/dunedin/snow-roads-more-heavy-rain-come

Anyway - they made a lot of money in the last handful of months. Nice to think that these earnings might be used for good purpose.

Quote from: BlackPeter on Oct 04, 2024, 03:28 PMJust hope that not too many people in East Otago are insured with Tower. Otherwise - the best time to sell these shares might be - right now.

https://www.odt.co.nz/news/dunedin/snow-roads-more-heavy-rain-come

Anyway - they made a lot of money in the last handful of months. Nice to think that these earnings might be used for good purpose.

I think it's a none event.
Firefighters only called out to 34 events.  Maybe some cars damaged but nothing major.   

Another NPAT upgrade - now 2024 NPAT expected to be $83m

https://www.nzx.com/announcements/439823

Quote from: Poet on Oct 11, 2024, 08:37 AMAnother NPAT upgrade - now 2024 NPAT expected to be $83m

https://www.nzx.com/announcements/439823

Great news.

The profit upgrade was pretty much baked into the SP so not much movement to be expected, I think. NZX50 inclusion is the biggie - how big, we'll find out soon enough ;D 

Apparently the PE tea-leaves are coming up with the number 7. Is that lucky?

Quote from: LoungeLizard on Oct 11, 2024, 11:11 AMApparently the PE tea-leaves are coming up with the number 7. Is that lucky?

If its a one-off - NO.

If they can maintain that PE over a number of years, this would be quite good, but is highly unlikely.

No doubt climate change and competition will make sure the PE goes up again.

So, normalizing this $83m after tax for the $32m after tax large event provision unused gives $51m which is a pretty decent upgrade on the previous somewhere north of $45m.
Trades cum a 5 cent dividend as we all know.

Looking at next year, we have estimated savings of ~ $13m before tax from the reinsurance program, likely ongoing insurance premium increases and the share buyback boosting eps.

Index inclusion, I expect to be announced next week.

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/rT913PEpde7PJPywAlcMPg/Sn7joLvpRWiZdUi4V763kBpQ

[Edit: - ignore my comments below.  There is a new provision each year.]

This unused "allowance" of $45m....based on the article lorraina linked, this sounds like a provision that was made in the previous fiscal year that has not been used.  If last year was a loss which included that provision and that provision is no longer needed, then it may be better to look at the 2 years combined rather than the single year which has this distortion when looking at PE ratios / EPS etc (I see Basil you have normalised for this).

Also, I see commentators stating $45m less tax for the provision reversal, but I'm assuming the provision in the prior year was non-deductible, such that its reversal would be non-assessable in the next fiscal year.  No tax adjustment is needed IMO.....although on reflection it would be deferred tax adjustment, rather than a current tax adjustment so yeah it's a book entry but it has no cash impact.  Much like the provision itself - it's all non cash.

Quote from: Basil on Oct 11, 2024, 11:57 AMSo, normalizing this $83m after tax for the $32m after tax large event provision unused gives $51m which is a pretty decent upgrade on the previous somewhere north of $45m.
Trades cum a 5 cent dividend as we all know.

Looking at next year, we have estimated savings of ~ $13m before tax from the reinsurance program, likely ongoing insurance premium increases and the share buyback boosting eps.

Index inclusion, I expect to be announced next week.

Hi Ferg,

Forsyth Barr just released some updated research yesterday.  I'll flick you an email.  What they're saying in a nutshell for FY25 is forecasting $58.9m which they figure will be eps of 17 cps but Tower are carrying a $50m provision for extreme weather events v 10 year average utilization of same being $21m.

This suggests to me, (leaving aside any argument about the effects of climate change worsening more rapidly in recent years), in a so called normal weather FY25 they are overprovisioning by $29m or $20.9m after tax.
If the weather is average, earnings should therefore be $58.9m + $20.9m = $79.8m = ~ 23 cps.

At $1.36 that puts them on a forward PE of $1.36 / 0.23 = 5.9 and that's cum the 5 cent final divvy, index inclusion and the capital return.  Tower's main competitors Suncorp and IAG which dominate the market here under various brands, (which very conveniently for them give Kiwi's the illusion of a high levels of competition in the market), which together, from memory, gives them a market share of over 70%, trade on metrics of, Suncorp ~ 17, IAG ~ 18.

For the dividend hounds, Forsyth Barr are also projecting gross dividend yield of 13.7% for FY26.
Fundamentally the case to hold looks compelling, as does the TA.

Index inclusion.  I remain hopeful of hearing news this week.  If not this week, it should be next week.

Thanks Basil

Am I interpreting this correctly, that the forecast of $59m is AFTER deducting another $50m provision?

Edit: apparently yes.  Also, if there is a $50m allowance EACH YEAR then I withdraw my earlier comments about inter-year provisioning.....

Yes. The provision for FY24 was $45m and they are prudently increasing that, which I presume they will factor into considerations with increased customer premiums this year. I can't see the major Australian insurers passing on any savings from a sunny year in FY24 so the competitive environment going forward is probably quiet benign.

Well Basil was right. Even Craig's or FB did not pick the correct date.

https://api.nzx.com/public/announcement/440043/attachment/429519/440043-429519.pdf

Let the fun begin  8)

Never thought I'd be in an insurance company with climate change going on but here we are!

Good stuff. Being added to the mid cap index too. Only four trading days to execute the change with final match price session on 21 October.

All going to plan then. Next 4 days will be interesting. A 10% uplift to $1.50 perhaps with a 5c divvy to come.  ;D

When the index announcement didn't come through yesterday afternoon, I shared this video with a few friend's, hopeful it would be today.  I thought you guys might enjoy it.   Best wishes to holders whatever you decide to do.  https://www.youtube.com/watch?v=6PtdpI-D6mM

Looks like there's been quite a few sellers - or maybe a small number of big one's - who have decided to bank their gains. Can't blame them but a bit premature I feel. Starting to thin out and then we'll see the colour of the buyers money. $1.40 by the end of the day hopefully.

Tough day after the Dow and Asia pacific markets falls. Tom is another day.

Latest from FB

We expect passive demand for TWR will be in the order of ~9m shares (25 x average daily volume.

Next for inclusion Brisco...

Quote from: Shareguy on Oct 18, 2024, 08:48 AMLatest from FB

We expect passive demand for TWR will be in the order of ~9m shares (25 x average daily volume.

Next for inclusion Brisco...

Briscoes share price been going up and down a lot last few days

Court approval forthcoming now just awaiting OIO approval.  Depending on timing of that the shceme could be delayed a little bit.
https://api.nzx.com/public/announcement/440318/attachment/429958/440318-429958.pdf
Posted in here because nobody cares about ARV anymore except those waiting for their $1.70 per share takeover proceeds, but index inclusion for Tower is what really matters.

What's your thoughts on where the shareprice will sit end of Monday Basil. What's your share holding pattern looking like now after your buys 😊

Anyone guess Scooter where it ends up at close of trading Monday. For what it's worth, I think if it was going to go close to broker valuations, we would have seen more progress towards that price already.  People have to decide for themselves what profit they will take, if any. 

QuoteNow we know that ARV's last trading day has been postponed till + 4 business days after receiving OIO approval ...what it means for TWR ? Will the final closing auction ie Index inclusion auction will also get postponed from Monday to NEW last ARV trading day ?? Or they will let it go ahead as notified ???
Not much difference it should make to ARV if it gets out of index few days before its last trading day !!!! Posted by Alokdhir on the other channel

Nothing was posted by the Dow Jones S&P indices after market close on Friday that I can see so unless there is some announcement by them on Monday morning, I think it's all go to conclude the index inclusion on Monday.  I'd like to think the OIO officials are working this weekend to finish off their approval of the ARV takeover but they're Govt officials not investment bankers lol

Quote from: Basil on Oct 19, 2024, 12:24 PMNothing was posted by the Dow Jones S&P indices after market close on Friday that I can see so unless there is some announcement by them on Monday morning, I think it's all go to conclude the index inclusion on Monday.  I'd like to think the OIO officials are working this weekend to finish off their approval of the ARV takeover but they're Govt officials not investment bankers lol

What you reckon will happen Monday / Tuesday ..price wise that is

Always good to lock in a profit, especially with the run up in the share price. I'm not picking a big increase in sp from here. FB and Craig's say 8m to 10m of buying on inclusion. I'm also not expecting a big drop in the sp either. The fundamentals are excellent with the capital return next year and Craig's have a increased divi each year to FY26. Also it's trading at a 38 percent discount to its pairs. On saying that the next disaster could be anytime so caution is warranted.

Quote from: winner (n) on Oct 19, 2024, 01:17 PMWhat you reckon will happen Monday / Tuesday ..price wise that is

See post #198 above mate. 

Either taking profits or holding for the divvy/capital return boost are both sound imo.
Arrive late at the party (to make sure it's a good one) and don't stay too long is my general approach to investing in stocks like Tower. If there's a bit of a bump next week ($1.50???) , I'll probably cash up some, or all of my holding. And, of course, it helps if there's another party just starting up down the road... ;) 

Quote from: LoungeLizard on Oct 19, 2024, 08:03 PMEither taking profits or holding for the divvy/capital return boost are both sound imo.

Holders will hold.....folders will fold.

From a TA perspective TWR remains a chart of great beauty.

Today's announcement confirming a share buy-back early in 2025 on top of the recent index announcements should  add further support to the SP growth trajectory.....https://www.nzx.com/announcements/440343

Yes agreed. While it may track down after today a little it still has runway to climb further. Results out soon plus 2025 guidence to come.    Certainty the price has not gone where I thought it would one inclusion was announced.   Wasn't expecting it to stay at the $1.40 mark

Quote from: Left Field on Oct 21, 2024, 12:30 PMHolders will hold.....folders will fold.

From a TA perspective TWR remains a chart of great beauty.

Today's announcement confirming a share buy-back early in 2025 on top of the recent index announcements should  add further support to the SP growth trajectory.....https://www.nzx.com/announcements/440343

Yep, each to their own. On balance there's probably more to be gained from holding than folding, at least for a few months. The capital return in March has been calculated as being 12c per share and there's a 5c divvy to come before then. And even without all of that, Tower are, by most parameters, still undervalued. So yes, I would agree that SP growth is likely in the months ahead.
Balancing that is the risk of a bad weather year that goes beyond TWR's re-insurance levels. I've made a deal with Mother Nature not to throw the really wild weather at us until winter. By then I plan to have folded and left the table.  ;)

17.15m shares changed hands today, mostly at the close at $1.40 final match price.  Up about 17 cps (13.8%) on circa $1.23 about a month ago when some dog let the cat out of the bag index inclusion was highly likely in late October.  Interestingly, a 13.8% gain is about the midpoint of what I have come to expect as the average gain from index inclusion, (5-25%) and suggests index inclusion on the prospect of regular quarterly rebalance on the NZX50 which had been talked about a lot already on both forums, had not unduly already affected the share price as of late Sept.

Match price was lower than many expected because of one key point, in my opinion.  You cannot escape the plain fact of the matter that the insurance industry is a business of making money from averaging risk over time so no matter what the company says about increasing premiums in the hope of covering the increased risk of climate change, (getting worse at an exponential rather than a linear rate?), the fact is that average eps over the last 5 years, including this year's great performance has been lackluster.  In fact, in analysis over the weekend, I calculated average eps of only 5.4 cps for the last 7 years notwithstanding this year's cracker performance moved the needle a lot.   How much better or worse average performance is in the next 7 years is frankly anyone's guess, the jury is well and truly out on that one.    Maybe all the work on adjusting risk-based pricing will do the trick and substantially lift eps going forward on average across different weather cycles over the years ahead, or maybe not, only time will tell.

TWR's performance is mainly down to El Nino vs La Nina

FB have released latest report

Stock performances and valuation
Over the last three months, the listed Australasian insurance sector has produced solid stock performances. TWR leapt +47%, SUN rose +8%, IAG moved +7% higher, and QBE ended up +2%. Over twelve months, TWR (+115%), SUN (+30%), IAG (+29%), and QBE (+7%) have all risen as the industry has benefitted from a strong rates cycle, mild weather and robust investment returns.�������������� TWR trades at 8.7x 12-month forward earnings (including NZ$50m of large events allowance), a discount to its own history and its Australasian insurance peers (median PE multiple of 17.4x).

Quote from: 850man on Oct 22, 2024, 09:03 AMTWR's performance is mainly down to El Nino vs La Nina

Well, El Niño seems to make things worse in NZ (i.e. worsening the impact of climate change). So yes, likely more big events during El Niño. The problem with this statement is: We all know the next El Niño will come, but nobody knows when (months or years?). So - we better be prepared and the insurance companies better keep sufficient reserves, whatever sufficient means (we will know after the event). 

Quote from: Shareguy on Oct 22, 2024, 09:07 AMFB have released latest report

Stock performances and valuation
Over the last three months, the listed Australasian insurance sector has produced solid stock performances. TWR leapt +47%, SUN rose +8%, IAG moved +7% higher, and QBE ended up +2%. Over twelve months, TWR (+115%), SUN (+30%), IAG (+29%), and QBE (+7%) have all risen as the industry has benefitted from a strong rates cycle, mild weather and robust investment returns.�������������� TWR trades at 8.7x 12-month forward earnings (including NZ$50m of large events allowance), a discount to its own history and its Australasian insurance peers (median PE multiple of 17.4x).

Thanks for sharing and I am sure there will be much debate about why going forward, "this time it's different", (in my opinion the most dangerous phrase in the investor lexicon).

Can any long-term investor share any insights as to why performance in the years prior to 2023, (we all know about the major weather events that year) was so lackluster?  Why couldn't Tower previously in all those earlier years get their management act together and set insurance prices that gave a decent return on capital?   I'm genuinely interested in this but don't have the time to read through multiple annual books of excuses, otherwise known as annual reports.

Quote from: Basil on Oct 22, 2024, 10:48 AMThanks for sharing and I am sure there will be much debate about why going forward, "this time it's different", (in my opinion the most dangerous phrase in the investor lexicon).

Can any long-term investor share any insights as to why performance in the years prior to 2023, (we all know about the major weather events that year) was so lackluster?  Why couldn't Tower previously in all those earlier years get their management act together and set insurance prices that gave a decent return on capital?   I'm genuinely interested in this but don't have the time to read through multiple annual books of excuses, otherwise known as annual reports.

Not really a follower of Tower, but here what I remember:

They seem to have a lot of business on the islands (no, not talking about North and South) ... and for some reasons this didn't always go well.

They had their fair share of earth quake related problems

I remember their name being called various times in the context of litigation and FMA inquests. A google search might show more.

During the three decades I am living in NZ, they never made it even on the shortlist for any of our insurances. I assume they sell mainly through brokers to people who are unable or unwilling to do their own research.

They have a long history of disappointing share holders as well as customers. As some posters tend to  say: "The past is the best guide to the future"?

But hey - maybe it all changed overnight. I don't know, but some of the current holders might ...

Quote from: Shareguy on Oct 22, 2024, 09:07 AMFB have released latest report

Stock performances and valuation
Over the last three months, the listed Australasian insurance sector has produced solid stock performances. TWR leapt +47%, SUN rose +8%, IAG moved +7% higher, and QBE ended up +2%. Over twelve months, TWR (+115%), SUN (+30%), IAG (+29%), and QBE (+7%) have all risen as the industry has benefitted from a strong rates cycle, mild weather and robust investment returns.�������������� TWR trades at 8.7x 12-month forward earnings (including NZ$50m of large events allowance), a discount to its own history and its Australasian insurance peers (median PE multiple of 17.4x).

with due respect to the guys at Forbar using 'peers' multiples for (dual listed) TWR is rather mischievous and somewhat a lazy approach

Methinks those guys know full well that TWR will never ever trade at a PE of 17.4x...... but it makes for a good story that keeps their clients happy

Even if the E part fell to 5 cents 17x is a big stretch and then only priced on hope that the 5 quickly turns to 10

Quote from: Basil on Oct 22, 2024, 10:48 AMThanks for sharing and I am sure there will be much debate about why going forward, "this time it's different", (in my opinion the most dangerous phrase in the investor lexicon).

Can any long-term investor share any insights as to why performance in the years prior to 2023, (we all know about the major weather events that year) was so lackluster?  Why couldn't Tower previously in all those earlier years get their management act together and set insurance prices that gave a decent return on capital?   I'm genuinely interested in this but don't have the time to read through multiple annual books of excuses, otherwise known as annual reports.

Does this mean yourve sold part or all of your holding Basil

Quote from: Scooter on Oct 22, 2024, 12:19 PMDoes this mean yourve sold part or all of your holding Basil

See post #207 Scooter.  I am sure if you read that, the answer will become self-evident. 

Quote from: Basil on Oct 22, 2024, 10:48 AMThanks for sharing and I am sure there will be much debate about why going forward, "this time it's different", (in my opinion the most dangerous phrase in the investor lexicon).

Can any long-term investor share any insights as to why performance in the years prior to 2023, (we all know about the major weather events that year) was so lackluster?  Why couldn't Tower previously in all those earlier years get their management act together and set insurance prices that gave a decent return on capital?  I'm genuinely interested in this but don't have the time to read through multiple annual books of excuses, otherwise known as annual reports.

I'm a current, but not long term holder, but my take on TWR's lackluster years is that they basically suffered disproportionately as a being a small fish in a big pond. They didn't have the economies of scale to keep costs or premiums down and, being small, the Christchurch earthquake and various bad weather events, also affected them disproportionately.

By all accounts they weren't that well managed either - the computer system upgrade took an age and as noted, their pacific island business didn't do that well either.

I think the current environment suits them much better. All insurance companies are charging more - 20-30% more - and this suits the smaller outfits like TWR, who can't normally compete on price. Going forward, without a catastrophically bad year that exceeds their very high re-insurance levels, the current level of excess profits will become "normal" and shareholder returns are likely to be very, very good.

BUt...in this industry, a bad year doesn't just mean lower profits and dividends, it means a loss and no dividends, from which it takes a year or more to bounce back from. TWR is the very definition of a boom and bust stock. As said, I think the SP has got room to move upwards yet, but for risk averse investors like myself I don't see it as a long term hold, despite the compelling metrics.

What's going to happen to the share price when they return this 12 cents?

Quote from: winner (n) on Oct 22, 2024, 01:37 PMWhat's going to happen to the share price when they return this 12 cents?

Yeah, there's still some good things to come, but my feeling is that people/institutions are selling down, taking profits/removing risk,  and we may see a retracement in the next week or two. Then as divvy day and the capital return get closer people might be tempted back in and the SP go back to current levels, maybe beyond. $1.50 seems a bit hopeful now, but you never know.
 But, as ever, I could be completely wrong and TWR may become a $2 stock as some seem to think.  :-\

I think it will be interesting when TWR returns the 12c per share.

Now that TWR is in NZX50 when TWR cancels (let's say) 10% of the shares on issue then either the share price will rise by circa 10% to reflect the increased EPS due to the lower number of shares on issue or those index funds are going to have to buy another circa 10% of their pre-capital-return shareholdings to maintain the correct proportion of TWR shares in their portfolios. Probably a combination of the two effects. Either way it's a win for independent holders. Capital return plus shareprice gain.

Quote from: Poet on Oct 22, 2024, 02:21 PMI think it will be interesting when TWR returns the 12c per share.

Now that TWR is in NZX50 when TWR cancels (let's say) 10% of the shares on issue then either the share price will rise by circa 10% to reflect the increased EPS due to the lower number of shares on issue or those index funds are going to have to buy another circa 10% of their pre-capital-return shareholdings to maintain the correct proportion of TWR shares in their portfolios. Probably a combination of the two effects. Either way it's a win for independent holders. Capital return plus shareprice gain.

Yep, can't dispute your logic there, Poet. It might well turn out that way, so I'm considering my usual fall-back position when undecided - sell half/ keep half.

Quote from: Basil on Oct 22, 2024, 12:39 PMSee post #207 Scooter.  I am sure if you read that, the answer will become self-evident. 

I'm going to take that as a yes. 😁

Quote from: Poet on Oct 22, 2024, 02:21 PMI think it will be interesting when TWR returns the 12c per share.

Now that TWR is in NZX50 when TWR cancels (let's say) 10% of the shares on issue then either the share price will rise by circa 10% to reflect the increased EPS due to the lower number of shares on issue or those index funds are going to have to buy another circa 10% of their pre-capital-return shareholdings to maintain the correct proportion of TWR shares in their portfolios. Probably a combination of the two effects. Either way it's a win for independent holders. Capital return plus shareprice gain.

Buying shares back lowers the free float market cap if the price stays the same.  In theory the remaining shares should rise due to the increased eps but the market is not always an efficient pricing mechanism and the buy-back money has to come from somewhere so presumably their term deposit ledger will be $45m lower next year, along with much lower term deposit rates so it's not going to be entirely eps accretive by any means, in line with the percentage of shares bought back.

I can envisage a scenario which I really hope doesn't happen, where we have another horrendous summer like 2023 with two so called one in one-hundred-year extreme events, the shares tank and the free float market cap resulting from extreme weather events and the capital return, is lowered enough to get booted out of the NZX50 index.  Very unlikely, but it is one plausible scenario, nonetheless.

Quote from: Poet on Oct 22, 2024, 02:21 PMI think it will be interesting when TWR returns the 12c per share.

Now that TWR is in NZX50 when TWR cancels (let's say) 10% of the shares on issue then either the share price will rise by circa 10% to reflect the increased EPS due to the lower number of shares on issue or those index funds are going to have to buy another circa 10% of their pre-capital-return shareholdings to maintain the correct proportion of TWR shares in their portfolios. Probably a combination of the two effects. Either way it's a win for independent holders. Capital return plus shareprice gain.

Adding my take on this, since I'm already reading up on how the indexes work...

If we're talking about the market re-rating TWR up by 10%, it's the same as any day-to-day price fluctuation, and the index funds don't have to buy more. The share price change affects the value of the shares they already hold, by just the right amount to track the index.

Similarly for corporate actions, index funds shouldn't have to go the market to adjust their holdings in that particular company. Instead, any capital inflow or outflow gets spread across the whole index. So, most of the TWR payout gets reinvested in the larger indexed companies, very little in TWR itself.

As an aside, for regular dividends too, the payout doesn't get reinvested in the company that yielded it, but rather is 'reinvested across the index' or paid out as a dividend by the index fund. So I gather index funds don't necessarily utilise DRPs, and if they do, the DRP discount is effectively free money for them - it doesn't stay in the fund since that would put the fund ahead of the index.

Quote from: bulltrap on Oct 22, 2024, 04:48 PMAdding my take on this, since I'm already reading up on how the indexes work...

If we're talking about the market re-rating TWR up by 10%, it's the same as any day-to-day price fluctuation, and the index funds don't have to buy more. The share price change affects the value of the shares they already hold, by just the right amount to track the index.

Similarly for corporate actions, index funds shouldn't have to go the market to adjust their holdings in that particular company. Instead, any capital inflow or outflow gets spread across the whole index. So, most of the TWR payout gets reinvested in the larger indexed companies, very little in TWR itself.

As an aside, for regular dividends too, the payout doesn't get reinvested in the company that yielded it, but rather is 'reinvested across the index' or paid out as a dividend by the index fund. So I gather index funds don't necessarily utilise DRPs, and if they do, the DRP discount is effectively free money for them - it doesn't stay in the fund since that would put the fund ahead of the index.

Yes, you are absolutely right - if the market rerates TWR by 10% then the index funds are sweet, nothing to do.
I was interested in the scenario where the market didn't rerate the shares and came to the conclusion that in that event, the index funds would have to purchase extra shares to maintain the appropriate weighting (at least until and if, the TWR index weighting was rebalanced at a quarterly rebalance date). In that case, the index buying would cause an increase in share price.

Quote from: Basil on Oct 21, 2024, 05:23 PM17.15m shares changed hands today, mostly at the close at $1.40 final match price.  Up about 17 cps (13.8%) on circa $1.23 about a month ago when some dog let the cat out of the bag index inclusion was highly likely in late October.  Interestingly, a 13.8% gain is about the midpoint of what I have come to expect as the average gain from index inclusion, (5-25%) and suggests index inclusion on the prospect of regular quarterly rebalance on the NZX50 which had been talked about a lot already on both forums, had not unduly already affected the share price as of late Sept.

Match price was lower than many expected because of one key point, in my opinion.  You cannot escape the plain fact of the matter that the insurance industry is a business of making money from averaging risk over time so no matter what the company says about increasing premiums in the hope of covering the increased risk of climate change, (getting worse at an exponential rather than a linear rate?), the fact is that average eps over the last 5 years, including this year's great performance has been lackluster.  In fact, in analysis over the weekend, I calculated average eps of only 5.4 cps for the last 7 years notwithstanding this year's cracker performance moved the needle a lot.   How much better or worse average performance is in the next 7 years is frankly anyone's guess, the jury is well and truly out on that one.    Maybe all the work on adjusting risk-based pricing will do the trick and substantially lift eps going forward on average across different weather cycles over the years ahead, or maybe not, only time will tell.

I've got to point out, that the evidence doesn't support 'getting worse at an exponential rather than linear rate' so really, whatever the issues are with TWR past performance, it isn't that.

Here is the last 10 years of gross (that's before re-insurance recoveries) large event claims
FY14   $10m
FY15  $7m
FY16 $12m
FY17 $16m
FY18 $25m
FY19 $0m
FY20 $19m
FY21 $24m
FY22 $25m
FY23 $255m
Fy24 $0m

TWR's actual costs were in all cases, (and especially 2023) substantially lower than the gross costs

Even a cursory inspection will show that this isn't anywhere near an exponential series, and in fact when compared with TWR's gross premium income (around $700m) it doesn't even seem a relevant factor.

The factors that we should be considering are claims ratio and management expense ratio - these have improved substantially over the last few years, primarily IMO due to proper risk management and implementation of more sophisticated and automated software systems. And don't forget swingeing premium increases that the whole industry seems to be embracing,

All only my opinion FWIW

Thanks Poet, I appreciate and respect your opinion and thanks to others for sharing their thoughts on this too.    Maybe not exponential but I don't think the effects are getting worse in a linear manner either.  For one thing, with massive ice shelf melting around the world a lot of methane has been released in recent years exacerbating the effects.   One expert who worked for Metservice for more than 50 years who'd been down to Antartica a few times, (I used to look after his accounts), told me a few years ago when he retired, we're in really deep trouble from ice melting around the globe and the methane release.  Its set up a chain reaction that cannot be stopped.  He went on and told me even if everyone on the planet bought an EV right now, the effects of methane released already and the consequent effects of climate change cannot be reversed...other than through a nuclear winter, and I am sure none of us want that.

Appreciate they've done a lot of work on their systems, pricing and risk management so maybe this time really is different and shareholders can look forward to great returns on their capital going forward, notwithstanding, shall we agree, the increasing effects of climate change.

Who knows for sure though? 2023 was such a shocker and affected the Beagle clan, such that I carry with me and cannot shake, a low level of anxiety the same thing might happen this summer or one summer again soon.  Hopefully that's just a very low-level PTSD or "recency bias" on my part and that anxiety will continue to dissipate over time and something like that won't happen again for another decade or more, preferably never again in my lifetime.

Quote from: Basil on Oct 22, 2024, 05:56 PMThanks Poet, I appreciate and respect your opinion and thanks to others for sharing their thoughts on this too.    Maybe not exponential but I don't think the effects are getting worse in a linear manner either.  For one thing, with massive ice shelf melting around the world a lot of methane has been released in recent years exacerbating the effects.   One expert who worked for Metservice for more than 50 years who'd been down to Antartica a few times, (I used to look after his accounts), told me a few years ago when he retired, we're in really deep trouble from ice melting around the globe and the methane release.  Its set up a chain reaction that cannot be stopped.  He went on and told me even if everyone on the planet bought an EV right now, the effects of methane released already and the consequent effects of climate change cannot be reversed...other than through a nuclear winter, and I am sure none of us want that.

Appreciate they've done a lot of work on their systems, pricing and risk management so maybe this time really is different and shareholders can look forward to great returns on their capital going forward, notwithstanding, shall we agree, the increasing effects of climate change.

Who knows for sure though? 2023 was such a shocker and affected the Beagle clan, such that I carry with me and cannot shake, a low level of anxiety the same thing might happen this summer or one summer again soon.  Hopefully that's just a very low-level PTSD or "recency bias" on my part and that anxiety will continue to dissipate over time and something like that won't happen again for another decade or more, preferably never again in my lifetime.

Thanks, I can certainly understand the trauma associated with last year's events, especially if one's family was directly impacted. and there is absolutely no doubt that climate change is real, but in a way doesn't that just reinforce the necessity of insurance and insurance companies and their continuing profitablity?

Quote from: Poet on Oct 22, 2024, 06:11 PMThanks, I can certainly understand the trauma associated with last year's events, especially if one's family was directly impacted. and there is absolutely no doubt that climate change is real, but in a way doesn't that just reinforce the necessity of insurance and insurance companies and their continuing profitablity?

Absolutely.  Noted in CNBC presenter discussions around the recent extreme weather event at Tampa in Florida, some American's need to carry four different types of insurance on their property and some of the most risky property is uninsurable.   Maybe headed that way here eventually?  Certainly, I think almost everyone has noticed their insurance costs really spiking up in recent years. 

Bit of a retracement going on, as predicted. ACC and Salt selling down. Twice as many sellers as buyers. Heading to $1.30 perhaps before things equalise and then wait for the next kick upwards with the divvy/cap return to come.

We watch the sp graduly fall since inclusion which was not unexpected. Always good to take profits and I suspect a number of people have used inclusion to sell all or part of thier holding. I spoke to one of my brokers to question my judgement to hold. I'm sitting on a good profit but have concerns going forward. Are the years of poor/ok performance over.  FY24 is going to be a stunner, we know that. Will it continue or is it a one off.

The following comments were made.

The share price has been on an upwards trend due to industry wide improved circumstances. 

Premiums have risen across the board.  Cost of remediation has been dropping rapidly due to competition in the building industry.

2023 had two 100 year major events. 2024 has been so far free of major events. An actuary might say the chances of major events in New Zealand are low for many years to come. I see some comentaters and industry peers are suggesting we are in for more of a settled pattern of weather.

The re insurance will enable more cover at a reduced cost. Craig's think a savings of $4m for FY25 onwards. Craigs note says  that TWR is currently trading on a 38 percent discount to it peers. Historically it's traded on a 25 discount which implies a fair pe of 10.3 which is $1.95 a share.

Apart from death and tax's there is no guarantees and a big event might just be round the corner. I guess it depends on your view point "a glass half full or a glass half empty". Caution is warranted but I'm not convinced that the good news won't continue for a while yet.

I'm going to wait for the FY24 result out next month. Hopefully more good news will be announced. I do note from the 2023 report that apart from the chair insiders have not got a lot of skin in the game.........

Thought this was interesting

https://www.insurancebusinessmag.com/nz/news/breaking-news/is-the-nz-market-looking-good-again-507585.aspx

Thanks for that Shareguy. I took my own advice and sold down half my holding at $1.39. I've still got a fair bit of skin in the game, so I'm hoping that the big picture analysts are correct. Time (and the weather) will tell.

QuoteAlokdhir, other channel Surely 1.15 levels on cards ...as that was a solid resistance on way up ...but results / dividend around can offer support ...
But all know after Index Inclusion they drift for a while till something POSITIVE comes up ...didn't come for HLG / TRA but for Tower its possible ...different beast and different times

Plenty of other examples too, of companies that get included in the index and it adds a significant premium and then that premium corrects back out over a period of time until there's some new material matter announced to generate price pressure. This correction process happens almost every time so shouldn't be a surprise to anyone.   Its declined 10 cents in just 4 trading days since inclusion.  Plenty of water to go under the bridge in terms of the price premium on index inclusion washing itself out in the months ahead.  The process almost always takes months, not days or weeks.

Quote from: Shareguy on Oct 24, 2024, 06:27 PM2023 had two 100 year major events. 2024 has been so far free of major events. An actuary might say the chances of major events in New Zealand are low for many years to come. I see some comentaters and industry peers are suggesting we are in for more of a settled pattern of weather.

That retired Metservice guy I referred too at post #226 with all his vast experience told me, you should expect those so called one in one-hundred-year events to happen every second year, perhaps more often.  I really hope he's wrong.  Maybe that's already modelled into their new, much increased premiums now, who knows for sure?  Anyway...best wishes, maybe this time it really is different, and the really compelling fundamentals are so good, a bigger after index inclusion correction is averted...time will tell.

Great result. All metrics going in the right direction especially NP and dividend (6.5c) at the high end of guidance.
The 45m share buyback should be very positive for EPS and should give the SP a bit of a bump. Barring a catastrophic weather year - which is, of course, the big caveat - TWR look set for another year of bumper profits and healthy returns. Happy to hold until share buyback at least.

Result as per earlier forecast and as expected by market. So - 19.48 cents EPS is a super dooper result for them? And yes, average EPS over the last 9 years was only a measly 2 cents, i.e. this was a really good result for a normally pretty pathetic performer.

Clearly - a market accepting currently ways to high insurance premiums for mediocre service contributed a lot ... but, how long will the lucky streak for holders last?

Share buybacks at too high prices (lets face it - they trade currently, based on their average EPS, on a PE of 74) typically result in prices to drop. Just check what happened at some of IFT's share buybacks :) ;

Nobody can predict where the hype will go, but it doesn't feel like a party I still would like to join at this point in time. Anyway - good luck to all party goers - just keep the noise down, will you?

Capital Return - Initial Court Orders Received
16/12/2024, 15:38 NZDT, MKTUPDTE
16 December 2024


Capital Return to Shareholders – Initial Court Orders Received

On 6 September 2024 Tower Limited (Tower) announced a proposed NZ$45m capital return by way of a Court approved scheme of arrangement.

Tower has received initial orders from the Court to, amongst other things, put the capital return to shareholders at its ASM on 11 February 2025 for their consideration and approval. As previously announced on 21 October 2024, IRD approval has already been obtained that no part of the capital return is in lieu of the payment of a dividend.

The scheme will involve Tower's shareholders:
• having one (1) share cancelled for every ten (10) shares
held (together with all rights attaching to those shares)
on the record date. Fractions of a share will be rounded
up or down to the nearest whole number (with 0.5 rounded
down); and
• receiving a cash sum of NZ$1.1858 for each share
cancelled. Australian registered shareholders will
receive these funds in Australian dollars at an exchange
rate approved by Tower on or about the record date and
organised by Tower's share registrar.

The scheme is also subject to the Board, at its sole discretion, remaining satisfied that Tower is complying with solvency and regulatory capital requirements, including under its capital management process requirements, and that it remains prudent to undertake the scheme, in each case, up to the time the scheme is given effect by cancellation of shares, expected to be in March 2025 (Key Scheme Condition).

If shareholder approval is received, Tower intends to seek final orders sanctioning the scheme from the Court. If these final orders are received in mid March 2025 and the Key Scheme Condition is satisfied, payment of the capital return would be made in early April 2025. Exact dates will, however, be confirmed closer to the time of payment.

ENDS

Are we to assume then that the SP will lift by 10% when the shares are cancelled? Is that a given?

Quote from: LoungeLizard on Dec 16, 2024, 04:01 PMAre we to assume then that the SP will lift by 10% when the shares are cancelled? Is that a given?

it's what you would expect all things being equal (although maybe earnings will be slightly lower given the reduced cash balance)

Quote from: Poet on Dec 16, 2024, 04:03 PMit's what you would expect all things being equal (although maybe earnings will be slightly lower given the reduced cash balance)

Cheers. I hope it turns out that way. I must say I am slightly wary. If shareholders (and the company) have 10% less shares in play, then one would also have to assume that the dividend would be lifted accordingly as well? 

Quote from: LoungeLizard on Dec 16, 2024, 04:12 PMCheers. I hope it turns out that way. I must say I am slightly wary. If shareholders (and the company) have 10% less shares in play, then one would also have to assume that the dividend would be lifted accordingly as well? 

I assume that is the plan. The market capitalisation shouldn't change (well not significantly) after the payout. Actually given they have developed a bit of a habit of paying out surplus cash by way of tax free capital returns, one might even draw some positive inference from this latest payout and re-rate the multiple (which is laughably low ATM)

Quote from: Poet on Dec 16, 2024, 04:20 PMI assume that is the plan. The market capitalisation shouldn't change (well not significantly) after the payout. Actually given they have developed a bit of a habit of paying out surplus cash by way of tax free capital returns, one might even draw some positive inference from this latest payout and re-rate the multiple (which is laughably low ATM)

TWR returned 30m in capital by way of a 1 in 10 cancellation on 9/3/2022 at 72c. However there wasn't a 7c post-return lift in the Sp - it barely budged, and in fact went into decline not long after. Unless I'm missing something, the precedent isn't that good?

So we have 12 cps with the cap return if it goes ahead as planed. The market will decide the price so their is risk for sure. Less shares will mean a higher divi per share than before the cap return.

As far as dividend goes Craig's have elected to exclude the cap return from their latest note

Craig's have 10cps FY25E and 12cps FY26
Fbar    have 11.5cps FY25 and 13cps FY26

In a falling interest rate environment it looks good to me, subject to of course when the next major event strikes.

Quote from: LoungeLizard on Dec 16, 2024, 04:27 PMTWR returned 30m in capital by way of a 1 in 10 cancellation on 9/3/2022 at 72c. However there wasn't a 7c post-return lift in the Sp - it barely budged, and in fact went into decline not long after. Unless I'm missing something, the precedent isn't that good?

That's the thing, there's no such thing as free money.
Keeping the maths really simple for the sake of this exercise, suppose there was 100m shares and the share price was $1.18 and it traded at NTA of $1.18 so had $118m of net assets.  After payout of 10% there's 90m shares and $106.2m of assets left and NTA of $1.18 per share so if it still traded at NTA the share price would still be $1.18 but you'd have 10% less shares and some extra money in your bank account, not Tower's bank account.  Money is merely shifted from one bank account to another, there's nothing created here.

Theoretical gains might come with the eps being improved, (but as others have noted there's less cash on hand so interest income will be reduced and further reduced by a declining interest rate market), and also in FY25 the weighted average number of shares on issue during the year will only be about 5% less and a meaningful uplift in eps will only occur in FY26 when 10% lower shares are on issue for the full year.  As others have already noted this is only theoretical as it's on a very low PE already so could just end up on an even lower multiple.  I think people hoping for an early 10% uplift in the share price and the payout to somehow be "free money" are being quite optimistic.  As you suggest, the precedent isn't good.

In my opinion, whether the weather plays ball during the cyclone season is the main factor that will affect the share price in the short to medium term. 
Tower was the top performing company on the NZX this year and the main reason for that was they got lucky with the weather.  Could it happen two years in a row with global warming worsening? 

Quote from: Basil on Dec 16, 2024, 04:54 PMThat's the thing, there's no such thing as free money.
Keeping the maths really simple for the sake of this exercise, suppose there was 100m shares and the share price was $1.18 and it traded at NTA of $1.18 so had $118m of net assets.  After payout of 10% there's 90m shares and $106.2m of assets left and NTA of $1.18 per share so if it still traded at NTA the share price would still be $1.18 but you'd have 10% less shares and some extra money in your bank account, not Tower's bank account.  Money is merely shifted from one bank account to another, there's nothing created here.

Theoretical gains might come with the eps being improved, (but as others have noted there's less cash on hand so interest income will be reduced and further reduced by a declining interest rate market), and also in FY25 the weighted average number of shares on issue during the year will only be about 5% less and a meaningful uplift in eps will only occur in FY26 when 10% lower shares are on issue for the full year.  As others have already noted this is only theoretical as it's on a very low PE already so could just end up on an even lower multiple.  I think people hoping for an early 10% uplift in the share price and the payout to somehow be "free money" are being quite optimistic.  As you suggest, the precedent isn't good.

In my opinion, whether the weather plays ball during the cyclone season is the main factor that will affect the share price in the short to medium term. 
Tower was the top performing company on the NZX this year and the main reason for that was they got lucky with the weather.  Could it happen two years in a row with global warming worsening? 

Hmmm, interesting point but ... surely we aren't valuing the company on its assets - we should be considering its earnings per share. This metric will increase inverse proportionate to the number of shares cancelled. Apart from the earlier mentioned interest earnings being lower we should expect the market capitalisation to stay roughly the same after the share cancellation. Forward EPS outlook, IMO, also shouldn't be based on the weighted average number of shares during the year but rather on the number of shares at the end of the year since this is the number of shares that future earnings will be shared among.
Of course, in practice, anything could happen - markets!!

Quote from: Poet on Dec 16, 2024, 05:14 PMHmmm, interesting point but ... surely we aren't valuing the company on its assets - we should be considering its earnings per share. This metric will increase inverse proportionate to the number of shares cancelled. Apart from the earlier mentioned interest earnings being lower we should expect the market capitalisation to stay roughly the same after the share cancellation. Forward EPS outlook, IMO, also shouldn't be based on the weighted average number of shares during the year but rather on the number of shares at the end of the year since this is the number of shares that future earnings will be shared among.
Of course, in practice, anything could happen - markets!!

All good in theory about higher eps leading to higher share price etc etc

Lots of research over the years to show that this doesn't often happen .... One school of thought is that post buy back company seen as 'riskier' and given a slightly lower PE

But Tower might be OK

Poet ...look at the SKT chart from mid 2022

Cap return $2.20 in November and share price dipped thst week but notice share price now is much the same as pre cap return ....and there's been a share buy back since.

Earnings have been bit fast but no rerate has occurred

So there's $45m less on term deposit and a typical term deposit was paying circa 6% a few months ago but all their term deposits might only be paying 3-3.5% this time next year.  Combining those two factors, is there likely to be much uplift in FY26 eps at all ?  (I don't know as I haven't tried to crunch the numbers)

The post-return rerate seems to be a bit of a lottery to me. No-one should expect free money, but they shouldn't be worse off either. That doesn't always seem to be the case.
However TWR are in a stronger position now than before and barring a catastrophic weather year (so far so good) it could well be another bumper year and a re-rating may be on the cards anyway, particularly if dividends increase as predicted.   

Quote from: winner (n) on Dec 16, 2024, 06:16 PMPoet ...look at the SKT chart from mid 2022

Cap return $2.20 in November and share price dipped thst week but notice share price now is much the same as pre cap return ....and there's been a share buy back since.

Earnings have been bit fast but no rerate has occurred

Yes, good observation Winner. But if TWR earnings are as projected and share numbers are down 10%, you would expect sp to lift. But there's no accounting for markets and their sentiments. I'm hanging on to my shares though and TBH happy to be getting a cashflow by way of the capital return. I guess that Bain feels the same way.

If I get time tomorrow I will try and crunch some numbers around the question I posed in my last post. I think the real gain in eps after those factors I mentioned will be pretty disappointing.
High risk cyclone season is only just over a month away from starting.

Quote from: Basil on Dec 16, 2024, 06:26 PMSo there's $45m less on term deposit and a typical term deposit was paying circa 6% a few months ago but all their term deposits might only be paying 3-3.5% this time next year.  Combining those two factors, is there likely to be much uplift in FY26 eps at all ?  (I don't know as I haven't tried to crunch the numbers)

Their NPAT profit guidance is $50-$60 million with a $50m large events allowance (and that is already accounting for the share cancellation) Large events to date, with the first quarter almost over are $2.5M, so let's say $10m annualised. At this rate then NPAT for this year will be $55m plus $30m = $85m On the reduced share volume of 341m shares, that's NPAT of $0.25 per share (or a PE of 5.28 at current share price $1.34)

Annualising a very low risk period of the year for extreme weather events seems like a very unwise thing to do.

Once we are through the high risk cyclone season, say by early May, annualising the extent of weather events so far, would be an appropriate approach for FY25.

Forgetting about any possible underutilisation of provisioning for extreme weather event's in future years seems like an appropriate way to value TWR to me on long run earnings.   Doing that the PE is 8.3 which is okay for a no growth company. Can they grow earnings in the years ahead with ever increasing problems from climate change is the real question for which I would suggest, there is no answer.
 
I have looked at Tower as a hold for dividend income to offset insurance costs. Analyst forecasts are one thing but Tower's very poor history with dividends excludes it from my considerations as a reliable income earner.

TWR is a definite hold for me providing useful 'financial sector' coverage in a well balanced portfolio.

In the last 12 months capital gains have been over 120% so average SP holding cost is well below today's SP and provides good risk mitigation.  Dividends a further 2% bonus.

When first purchased TWR was 5% of my portfolio (to mitigate risk) but quickly grew to be 15 %. When the SP reached over $1.40 I sold 25% of my holding and now plan to keep TWR at circa 10% of my portfolio.

Current PE of 6.8 is relatively conservative (as befits some risk.) For comparison IAG trades at a 22 PE. Sun insurance 19 PE.  IMO there is a strong likelihood of further strong SP appreciation in 2025 but make no predictions.

As another bonus, yesterday's buyback announcement will more than pay my ALL annual 2025 insurance costs.

Fair enough. FWIW at one stage I held enough TWR to pay annual insurance from forecast regular dividends several times over and did consider keeping enough as a hedge to eliminate insurance costs going forward but there is no escaping the truth of their very poor dividend history.

The other thing is stocks going into the NZX 50 have a strong propensity to underperform the index in the subsequent 12 months. Maybe Tower will be an exception to that norm. Time will tell but my focus is on stocks that have earned my trust that they can be depended on for retirement income .

I caution that you should take with a grain of salt, brokers dividend forecasts and look at the very poor history over the last 10 years.

I  hope we have fabulous summer weather and there's no repeat of the weather horrors of 2023.

Quote from: Basil on Dec 17, 2024, 09:23 AM.........

I  hope we have fabulous summer weather and there's no repeat of the weather horrors of 2023.

Fabulous summer weather ...hot and dry and windy in South Island equals fires

Didn't Lake Ohau fire cost Tower best part of $10m a couple of years ago?

S

Quote from: Basil on Dec 17, 2024, 09:23 AMI  hope we have fabulous summer weather ....

You mean - like yesterday?

Can someone please aware me on how they came to the return cash sum on cancelled shares of $1.1858?

Quote from: raW tent Buffer on Dec 17, 2024, 10:18 AMCan someone please aware me on how they came to the return cash sum on cancelled shares of $1.1858?

I think it's along the lines of cancel 10% of 379483987 shares and pay $45m for them.

That seems odd to me but maybe I'm just not understanding it properly.

Why aren't they just purchasing on-market at the current SP then cancelling like most of the SBB I've been involved in? I don't quite follow why they are returning capital to shareholders substantially below market value.

Makes sense in theory if the SP goes up accordingly but from some of the posts I've read this isn't a given?

Quote from: raW tent Buffer on Dec 17, 2024, 10:46 AMThat seems odd to me but maybe I'm just not understanding it properly.

Why aren't they just purchasing on-market at the current SP then cancelling like most of the SBB I've been involved in? I don't quite follow why they are returning capital to shareholders substantially below market value.

Makes sense in theory if the SP goes up accordingly but from some of the posts I've read this isn't a given?

Yep, I'm with you on that. I'd much prefer the certainty of the on-market buyback and cancellation, but for some reason- perhaps someone can enlighten me as to why - Tower doesn't seem to do that, as do a few others like SKT.



 

Quote from: LoungeLizard on Dec 17, 2024, 11:05 AMYep, I'm with you on that. I'd much prefer the certainty of the on-market buyback and cancellation, but for some reason- perhaps someone can enlighten me as to why - Tower doesn't seem to do that, as do a few others like SKT.



 

I'm thinking it's because this whole process has been initiated by some (or just one) of the large shareholders who want to extract some funds from the investment. Maybe selling on market into a buyback would be too uncertain. At least this way they guarantee that they can take 10% of their investment off the table. Just guessing here, someone else may have abetter explanation

This way everyone gets the same ratio and proprietorship  remains unchanged

I was surprised recently when I read they still do business in the Islands.  Surprised because of the extreme cyclone risk.  Can't remember which south pacific islands, sorry.  Hope it's not Vanuatu https://www.nzherald.co.nz/nz/74-magnitude-earthquake-strikes-near-vanuatu-tsunami-waves-possible/A4BVBGC3VJFQ5P2F2M4GW5JF4M/

Quote from: Basil on Dec 17, 2024, 04:46 PMI was surprised recently when I read they still do business in the Islands.  Surprised because of the extreme cyclone risk.  Can't remember which south pacific islands, sorry.  Hope it's not Vanuatu https://www.nzherald.co.nz/nz/74-magnitude-earthquake-strikes-near-vanuatu-tsunami-waves-possible/A4BVBGC3VJFQ5P2F2M4GW5JF4M/

https://www.nzx.com/announcements/424802

also note they have a pretty strict requirement for construction integrity before they will insure Pacific island houses for hurricane damage

Quote from: Poet on Dec 17, 2024, 05:01 PMhttps://www.nzx.com/announcements/424802

also note they have a pretty strict requirement for construction integrity before they will insure Pacific island houses for hurricane damage

Phew...out of that business in the nick of time !

Quote from: Basil on Dec 17, 2024, 04:46 PMI was surprised recently when I read they still do business in the Islands.  Surprised because of the extreme cyclone risk.  Can't remember which south pacific islands, sorry.  Hope it's not Vanuatu https://www.nzherald.co.nz/nz/74-magnitude-earthquake-strikes-near-vanuatu-tsunami-waves-possible/A4BVBGC3VJFQ5P2F2M4GW5JF4M/

Yes, good timing selling their Vanuatu operation, but there are still plenty others:

According to Dr. Google:

QuoteTower Pacific operates in Tonga, Samoa, American Samoa, the Cook Islands, and Fiji. Its Pacific operations hub is located in Suva, Fiji where it employs around 300 staff.

Quote from: BlackPeter on Dec 17, 2024, 05:21 PMTower Pacific operates in Tonga, Samoa, American Samoa, the Cook Islands, and Fiji. Its Pacific operations hub is located in Suva, Fiji where it employs around 300 staff.

Crickey, that's a big operation then and all those islands are really prone to severe cyclones with the ever-worsening effects of global warming.  It's just flip a coin stuff if the premiums are now high enough for the extreme risks involved and whether the weather smashes TWR how many times?, or not at all?

P.S. and now Wellington.  https://www.nzherald.co.nz/nz/49-earthquake-rattles-wellington/YCHUOLADDJE3BGQFMB7NASRHJA/
My goodness, you need nerves of steel to own Tower shares.

Stop talking about quakes ..... just felt one

Seems 5.1 near Seddon

Quote$45 mil out and put to use as share buyback and wont accrue interest WHEN paid out ...tentatively April 2025 ....BUT that $ 45 mil will get replaced by current year big event fund of $ 50 mil ....basically it all depends upon Big events behaving for big bonuses or losses or just BAU returns always for TWR

PS : TWR from these levels is taking a PUNT on Big events in current FY !!!

Till $ 800 mil of claims of big events they loose only $ 50 mil big event fund as excess to reinsurance above that is pure loss and they sure can mount if God not smiling on them ...though very prudently managed but still too big a risk covering world's second most vulnerable country for such events . Risk / rewards do not favour investment at these levels ...imho

Alokdhir just posted this on the other channel.  Am I reading this right? Is (s)he correct that if there's a big one in say Wellington, that costs Tower more than $800m, Tower itself has to wear costs above that level if it can?   Surely, we're not just one really big earthquake away from Tower going out of business.  I must have this wrong, surely?

Quote from: Basil on Dec 17, 2024, 06:30 PMAlokdhir just posted this on the other channel.  Am I reading this right? Is (s)he correct that if there's a big one in say Wellington, that costs Tower more than $800m, Tower itself has to wear costs above that level if it can?   Surely, we're not just one really big earthquake away from Tower going out of business.  I must have this wrong, surely?

yep you are wrong, Tower re insurer structure has a set amount of maximum risk for any one event, this was $12m but I think that has risen to $15m

Just looked it up. Reinsurance was capped at a max claim per one event of $750m in FY24.
Think it's $800m in FY25.
Above that Tower are on the hook for claims that could prove to be an existential event. That exisistential risk needs to be modelled into the valuation but how ?

A true 1 in 100 year event or more likely than that, who knows?

Quote from: Basil on Dec 17, 2024, 08:45 PMJust looked it up. Reinsurance was capped at a max claim per one event of $750m in FY24.
Think it's $800m in FY25.
Above that Tower are on the hook for claims that could prove to be an existential event. That exisistential risk needs to be modelled into the valuation but how ?

A true 1 in 100 year event or more likely than that, who knows?

Remember though, that earthquake risk is covered up to first $300k +GST per property by the EQC (or whatever it is called nowadays NHC?). This takes a lot of risk off the table

Only a few years ago Reinsurance companies started to cap their liability.
Question.
Does Tower cap their policies accordingly.?

Quote from: Basil on Dec 17, 2024, 08:45 PMJust looked it up. Reinsurance was capped at a max claim per one event of $750m in FY24.
Think it's $800m in FY25.
Above that Tower are on the hook for claims that could prove to be an existential event. That exisistential risk needs to be modelled into the valuation but how ?

Tower have catastrophe reinsurance with an excess of about $12m, this is why they carry a provision of $45m to cover 4 x major events every year. This means that per any one event max cost to the company is about an excess of $12m

This statement is from one of the events in early 2023,
Tower expects further claims as people in affected areas regain access to
their properties and power and communications are restored. While there is
insufficient information to estimate the ultimate cost of Cyclone Gabrielle,
Tower expects it is likely to also trigger Tower's reinsurance for
catastrophe events, with an excess of $11.875m.

Now if the big one struck one must understand that Tower only has a certain share of the market so $800m reinsurance cap per event is reasonably healthy I would have thought, besides that, as already stated EQC have some cover in place already.
Not to mention we live in a nanny state so government will be at the ready to give handouts.
I think you will find it is multiple large events in the one year that hurt Tower the most.
In saying that the big one will see thier SP halved overnight just because of the vagaries involved

While we all fear NZ's next disaster...... the same could be said for many other countries and the USA is no exception, constantly suffering events such as earthquakes, hurricanes, forest fires, coastal erosion etc.

Consider what Buffet says about his investment in Insurance companies......

"Insurance companies enjoyed some terrific advantages, as compared to manufacturers. Insurers offered a product that never went out of style. They profited from investing their customers' money. They didn't require expensive factories or research labs. They didn't pollute. They were recession-resistant. During hard times, consumers delayed expensive purchases (houses, cars, appliances, and so on), but they couldn't afford to let their home, auto, and life insurance policies lapse. When a sour economy forced them to economize, people drove fewer miles, caused fewer accidents, and filed fewer claims-a boom to auto insurers. Because interest rates tend to fall in hard times, insurance companies' bond portfolios become more valuable. These factors liberated insurers' earnings from the normal business cycle, and made them generally recession-proof."

Buffet's insurance investments started 50 years ago and compounded at 18% annually over that time. More recently in 2019 Buffet purchased 26 mill shares in Chubb insurance for $67 Billion. Chubb operates worldwide.

 

Quote from: lorraina on Dec 17, 2024, 09:37 PMOnly a few years ago Reinsurance companies started to cap their liability.
Question.
Does Tower cap their policies accordingly.?

As I understand it NZ Govt legislation requires Insurance companies to manage their risks (ie policies)  by covering their maximum risk based on a 1000 year event occurring. Hence the reinsurance mentioned above.

From Antipodean's Sharetrader post;

2) Insurance coverage (at most including Tower) is capped as sum insured value, unliked uncapped cover prior, for most perils including EQ events.

Assuming no large events, I wonder if we might see a guidance update before the ASM on 11/2 and the vote on the capital return? Last year they upgraded their guidance after 4 months of trading on 14/2.

Encouraging action on replacement CEO.....

https://www.nzx.com/announcements/445639

Footnote; Former CEO of Tower has been appointed CEO of Milford according to NBR article

Tower Partners With Finsure
TowerTuesday, 28 January 2025, 12:51 pm
Press Release: Tower

Tower has today announced a new partnership with one of Asia-Pacific's largest mortgage aggregation groups, Finsure, to simplify insurance referrals for customers and advisers.

The partnership will reduce complexity for Finsure NZ advisers, with Tower's unique referral model, ensuring a specialist Tower team member handles the entire lifecycle of the insurance quote process.

Tower MD Partnerships Jonathan Beale says, "We're thrilled to partner with Finsure, a trusted international mortgage aggregation group with a fast-growing presence in New Zealand. This partnership reinforces our commitment to offer Kiwi forward thinking insurance products and services, and simple and rewarding customer experiences; it's great that Finsure NZ's advisers and their customers will now benefit from these offerings too."

In FY24, the growth of Tower's adviser network accelerated by 32% to 3,300 advisers, with a 19% increase in new policies sold via adviser referrals, compared to FY23.

Finsure New Zealand Country Manager Jenny Campbell says, "Our partnership with Tower opens the doors to new, high-quality insurance products and services that will benefit our advisers and their clients alike. We're proud to be partnering with New Zealand's only Kiwi-born and bred insurance company, whose wholehearted commitment to delivering the best for their customers is reflected in our own company values."

Both Tower and Finsure NZ operate in partnership with Vega Mortgages, a top advisory firm offering a range of financial solutions to their customers.

Highlighting the value of Tower's partnership with Finsure NZ, Vega Group Chief Executive and Managing Director, Harry Ferreira says, "Finsure is fast becoming a leading player in the New Zealand mortgage advisory market, and their new partnership with Tower is testament to this. By working together with Tower, Finsure is only set to increase their reach further across the country, delivering simple and effective mortgage services to even more Kiwi."

Craig's have just updated their NZ Conviction portfolio and have increased waiting to Tower

 •Increasing Tower (TWR, +2.5% to 5%) – now comfortably back in the NZX50 we see TWR's PE of 7.5x as unjustified (50% discount to peers, 25% discount historically). Benign weather may see an FY25 (Sept YE)  upgrade, a $45m capital return is expected in March.

I am weighting to see if Craig's Conviction moves TWR's share price....?

Tower be de-risked from cyclone season by late April.  Not sure how anyone can have much conviction about the degree of expected extreme weather in N.Z. in 2025 until then. 

Quote from: lorraina on Jan 29, 2025, 11:53 AMI am weighting to see if Craig's Conviction moves TWR's share price....?

If they put all their managed clients into it..........often said the likes of FB/Jardens/Craigs could likely move the market with positive/buy recommendations. Becomes a self-fulfilling prophecy. 

Undemanding metrics currently, but one event could change that.

Looking forward to dividend day tomorrow!!  8)

First guidance upgrade of 2025 just in... Could be looking well in excess of 100m NPAT at end of FY assuming no big disasters.

Very nice

Quote from: raW tent Buffer on Feb 05, 2025, 10:02 AMFirst guidance upgrade of 2025 just in... Could be looking well in excess of 100m NPAT at end of FY assuming no big disasters.

Very nice

Yep, and after the share buyback there will only be something like 340m shares - a lot of head room to pay a special dividend.

They might have to visit a drop in premiums to their clients if they haven't looked at this already. Seems a bit on the nose when there is a significant hit they just increase premiums instead of asking shareholders for cash to cover...

Wonder Commerce Commission would think given insurance companies are creaming it, well Tower in the case are..

Food for Thought

Quote from: Greekwatchdog on Feb 05, 2025, 12:59 PMThey might have to visit a drop in premiums to their clients if they haven't looked at this already. Seems a bit on the nose when there is a significant hit they just increase premiums instead of asking shareholders for cash to cover...

Wonder Commerce Commission would think given insurance companies are creaming it, well Tower in the case are..

Food for Thought

Absolutely - its a free market and Tower is typically overcharging clients and underdelivering in service. Just check where they typically end in insurance company comparisons. The result? Over the last 9 financial years they made in average meagre 2 cents per year per share.

So, sure - maybe they are lucky this year, but this will fix itself soon. Markets are forward looking, i.e. holders better dance very close to the exit and hope its big enough for the expected stampede.

Quote from: Greekwatchdog on Feb 05, 2025, 12:59 PMThey might have to visit a drop in premiums to their clients if they haven't looked at this already. Seems a bit on the nose when there is a significant hit they just increase premiums instead of asking shareholders for cash to cover...

Wonder Commerce Commission would think given insurance companies are creaming it, well Tower in the case are..

Food for Thought

Here's some food for thought

https://www.nzx.com/announcements/341787

and

https://www.nzx.com/announcements/354245

I guess there are good years and bad years. I don't resent them their good years.

Quote from: Poet on Feb 05, 2025, 01:11 PMHere's some food for thought

https://www.nzx.com/announcements/341787

and

https://www.nzx.com/announcements/354245

I guess there are good years and bad years. I don't resent them their good years.

Fair enough, just from a customer perspective it becomes greedy if there is another Disaster that has a horrendous price tag who gets left with the bill for TWR to sort their financial position out.

From today's update;
While Tower saw strong customer growth in the first three months of the financial year, a
reduction in average premiums has contributed to lower-than-expected GWP growth. Tower is
seeing a reduction in average premiums due to higher-than-expected proportions of lower risk new
house insurance and motor policies.

Makes very good sense to me.

Quote from: lorraina on Feb 05, 2025, 01:34 PMFrom today's update;
While Tower saw strong customer growth in the first three months of the financial year, a
reduction in average premiums has contributed to lower-than-expected GWP growth. Tower is
seeing a reduction in average premiums due to higher-than-expected proportions of lower risk new
house insurance and motor policies.

Makes very good sense to me.

Will they reduce the premiums by as much as they increase them?

That could be possible,but unlikely to be probable.

I guess there's always going to be a glass half full /empty view of insurance companies. They are a necessary evil and we abhor them when they make super profits in the goods times then we moan as shareholders when the return is abysmal or non-existent in the bad. At the moment Tower and the insurance industry are on a roll - anyone who took a punt less than 12 months ago, has doubled their money. Bank the profits or stay in the game. No complaints either way.   

SP bumping over $1.40 finally, ahead of today's ASM. Q1 performance and upgrade, plus capital return should equate to a bit of SP action in the weeks ahead.

Details of the TWR cap return approved....

https://www.nzx.com/announcements/448290

The scheme will involve Tower's shareholders:
 • having one (1) share cancelled for every ten (10) shares held (together with all rights attaching to those shares) on the record date. Fractions of a share will be rounded up or down to the nearest whole number (with 0.5 rounded down); and
 
 • receiving a cash sum of NZ$1.1858 for each share cancelled. Australian registered shareholders will receive these funds in Australian dollars at an exchange rate approved by Tower on or about the record date.
 

It's going to be interesting to see how this affects the SP from hereon. 

Quote from: Left Field on Mar 12, 2025, 04:37 PMDetails of the TWR cap return approved....

https://www.nzx.com/announcements/448290

The scheme will involve Tower's shareholders:
 • having one (1) share cancelled for every ten (10) shares held (together with all rights attaching to those shares) on the record date. Fractions of a share will be rounded up or down to the nearest whole number (with 0.5 rounded down); and
 
 • receiving a cash sum of NZ$1.1858 for each share cancelled. Australian registered shareholders will receive these funds in Australian dollars at an exchange rate approved by Tower on or about the record date.
 

It's going to be interesting to see how this affects the SP from hereon. 

Yes, it will be interesting.
After the buyback 340m shares on issue with a projected NPAT (in 6 months time) of between $65m and $110m depending on large claims in the next 6 months.

That's between 20c and 32c per share NPAT. At an undemanding PE of 8, shareprice should be between $1.60 and $2.50. It probably won't be, but go figure

Quote from: Poet on Mar 12, 2025, 05:16 PMYes, it will be interesting.
After the buyback 340m shares on issue with a projected NPAT (in 6 months time) of between $65m and $110m depending on large claims in the next 6 months.

That's between 20c and 32c per share NPAT. At an undemanding PE of 8, shareprice should be between $1.60 and $2.50. It probably won't be, but go figure

Yes agree. The market in my opinion is not taking into account the lower risk profile they have after all the changes. Index funds should also be buying to make up for the share cancellation. Will be interesting given the current market.

It's not my field of expertise so maybe someone more knowledgeable can help.
The day twr starts trading again is 20th March, is that the quarterly rebalance date for index funds?
A fund that has say 1% of money in twr today would only have 0.9% in twr after the cancellation so they will have to buy extras on market. In addition twr sp has risen since entering the nzx50 index last year so maybe twr weighting in nzx50 has risen so fund actually needs to hold more % than it did at last rebalance.
Does this make sense?

Quote from: Poet on Mar 12, 2025, 07:58 PMIt's not my field of expertise so maybe someone more knowledgeable can help.

Certainly not holding myself out as an expert but I have studied these index changes a fair bit over the years and done okay out of them.

Quote from: Poet on Mar 12, 2025, 07:58 PMThe day twr starts trading again is 20th March, is that the quarterly rebalance date for index funds?

Index weighting changes take effect as at the closing match session on 21 March but are known to key market participants when they are announced on the first Friday in the third month of each Quarter when an index change is upcoming, (in this case 7 March) and participants in the know regarding re-weighting, (generally only institutions who subscribe to a service that I forget the name of) have two weeks to adjust their holdings.  A modest possible pending reweighting may explain TWR's relative strength to the market this month.

Quote from: Poet on Mar 12, 2025, 07:58 PMA fund that has say 1% of money in twr today would only have 0.9% in twr after the cancellation so they will have to buy extras on market. In addition twr sp has risen since entering the nzx50 index last year so maybe twr weighting in nzx50 has risen so fund actually needs to hold more % than it did at last rebalance.

As I understand it any reweighting is decided when its announced, (7 March) and is solely based on historical data that predates that announcement.
In terms of any reweighting I note the price hasn't changed much, up 2 cents, since the date of index inclusion in December when the closing match price was $1.40 but will be based on average market cap this quarter compared to last.   That said, recent entrants to the NZX50 carry very little weight in the index overall and I've been surprised how little the effect is of reweighting in subsequent periods after a company is initially included.  There's more effect from major constituents share price movements, e.g. if FPH really falls out of bed, everyone else gets reweighted up a bit in proportion to their index weighting.

Quote from: Basil on Mar 12, 2025, 09:07 PMAs I understand it any reweighting is decided when its announced, (7 March) and is solely based on historical data that predates that announcement.
In terms of any reweighting I note the price hasn't changed much, up 2 cents, since the date of index inclusion in December when the closing match price was $1.40 but will be based on average market cap this quarter compared to last.   That said, recent entrants to the NZX50 carry very little weight in the index overall and I've been surprised how little the effect is of reweighting in subsequent periods after a company is initially included.  There's more effect from major constituents share price movements, e.g. if FPH really falls out of bed, everyone else gets reweighted up a bit in proportion to their index weighting.

Thanks for that Basil.

So it seems then that even if the relative index weighting of TWR doesn't change the index funds will still need to buy an additional 10% of shares to replace those that were cancelled in the buy back in order to maintain the correct proportion of TWR in their funds

Not 100% sure, sorry Poet.  There's not been very many of these share cancellations over the years. Index adjustment and changes seems to be all based on market cap.  Any changes required to be made to weightings in the June rebalance will be reflective of the market cap over the June quarter relative to March quarter.  A fair bit of cash has left the company coffers due to the buyback.  There are no magic free lunches here is how I see it.  All that cash leaving the balance sheet would tend to lower the market cap in my opinion, all other things being equal.

Quote from: Basil on Mar 12, 2025, 10:19 PMNot 100% sure, sorry Poet.  There's not been very many of these share cancellations over the years. Index adjustment and changes seems to be all based on market cap.  Any changes required to be made to weightings in the June rebalance will be reflective of the market cap over the June quarter relative to March quarter.  A fair bit of cash has left the company coffers due to the buyback.  There are no magic free lunches here is how I see it.  All that cash leaving the balance sheet would tend to lower the market cap in my opinion, all other things being equal.

Thanks

Actually, there could be a free lunch of sorts to be had here...
I think that TWR's timing of the cap return has been deliberately chosen so as to take advantage of the rebalance.
Clever TWR!
There are two factors in support of TWR SP rising at index rebalance date
First, the index weighting for TWR at this March review will have been determined based on TWR market cap before the capital repayment, hence either shareprice will rise by 10% at rebalance date or the index funds will need to buy an extra 10% of shares just to maintain the correct weighting in their portfolios.
Secondly, TWR shareprice has risen since last rebalance in December, whereas the overall NZX index has declined (due to SPK, FBU, RYM et al) so even if there was no TWR cap repayment, TWR's index weighting would have risen.
I guess we will see next week.

Quote from: Poet on Mar 12, 2025, 10:03 PMThanks for that Basil.

So it seems then that even if the relative index weighting of TWR doesn't change the index funds will still need to buy an additional 10% of shares to replace those that were cancelled in the buy back in order to maintain the correct proportion of TWR in their funds

Actually - if you think about it, this makes no sense at all.

Just imagine (for examples sake) all shares of a company are in index funds.

Company cancels 10% of their shares.

Following your argument index funds would need to buy shares which don't exist anymore (the cancelled ones) to fill up.

How are they going to do that?

I think it's fair to assume that the cancellation of shares does not impact on index funds at all - and hey, it doesn't - they still hold the same share of the company, don't they? This doesn't change with share cancellation or share splits. No need to do anything for the fund.

 

Quote from: BlackPeter on Mar 13, 2025, 08:14 AMActually - if you think about it, this makes no sense at all.

Just imagine (for examples sake) all shares of a company are in index funds.

Company cancels 10% of their shares.

Following your argument index funds would need to buy shares which don't exist anymore (the cancelled ones) to fill up.

How are they going to do that?

I think it's fair to assume that the cancellation of shares does not impact on index funds at all - and hey, it doesn't - they still hold the same share of the company, don't they? This doesn't change with share cancellation or share splits. No need to do anything for the fund.

 

Hmmm. Not sure about your example there, that's a bit like proving 1=2 by dividing them both by zero.

You are right that index funds own same percentage of company before and after cap return. But I don't think that the index algorithms are concerned with what percentage they own in each individual company. I think the index calculation is based on what proportion of the funds total $ value is invested in each index component.
So if for example twr is 1% of the index then each of the funds shoukd hold 1% of their $ value in twr. If a fund suddenly finds itself with 10% fewer shares in twr and twr shareprice hasn't changed then the fund needs to add shares to bring its investment in twr back up to being 1% of total funds

Quote from: Poet on Mar 13, 2025, 08:49 AMHmmm. Not sure about your example there, that's a bit like proving 1=2 by dividing them both by zero.

You are right that index funds own same percentage of company before and after cap return. But I don't think that the index algorithms are concerned with what percentage they own in each individual company. I think the index calculation is based on what proportion of the funds total $ value is invested in each index component.
So if for example twr is 1% of the index then each of the funds shoukd hold 1% of their $ value in twr. If a fund suddenly finds itself with 10% fewer shares in twr and twr shareprice hasn't changed then the fund needs to add shares to bring its investment in twr back up to being 1% of total funds

I think you miss here several important details. Dividing by zero is not one of them, though :P ;

First - there are different index tracking methodologies. Explain which of them you are referring to, and why. Remember - Every index tracking fund will have a different set of rules how they achieve their tracking. Most will be diffeerent and none of them will be perfect.

Here is a bit info about index tracking, but I am sure, there is somewhere stuff, which goes deeper:

https://kernelwealth.co.nz/blog/index-rebalancing-what-is-it

Second - if we assume the index fund you are referring to tracks indices based on marketcap (which is legitimate and makes sense), then absolutely nothing happens if the company cancels shares.

In an ideal world (rational market), the new marketcap should be the old marketcap minus whatever they refunded (bought back) shareholders. I.e. the index will go down by the amount the company refunded to their share holders, and the index tracking fund needs to do nothing - it tracks the index nicely by doing nothing.

If however the market does its usual thing, then depending on the current hype to brain ratio in the market, the price of the remaining shares will either represent a higher marketcap (minus payout) or a lower market cap than before. In both cases the index will move accordingly and the indexfunds need to do - yes, you got it: Absolutely nothing, given that they track the index.

Not even a storm in a teaccup.

Only exception I see - if the marketcap of the company changes through this action by that much that it either brings the stock into a new (additional) index, or it drops it out of some index. In this case, the relevant indexfunds need to do, what they always do: rebalance. But this is BAU, no matter why the company dorpped out or got into the index.

Quote from: BlackPeter on Mar 13, 2025, 09:27 AMSecond - if we assume the index fund you are referring to tracks indices based on marketcap (which is legitimate and makes sense), then absolutely nothing happens if the company cancels shares.

Thanks for links etc

An example maybe helps

NZX50 index is based on free float market capitalisation.

Let's say that at 7 March the NZX 50 has a 1% weighting to TWR based on TWR's market cap at 7 March

I run an index fund tracking NZX50 and I have $1 million under management so at 7 March I should have $10,000 invested in TWR so as to be tracking the index

At 20 March TWR cancels 10% of shares - so at 20 March I now only have $9000 invested in TWR shares so it is now only 0.9% of my fund

At 21 March my fund rules require that I rebalance so that I have 1% of my funds in TWR again - hence either the price of TWR has risen by 10% or I need to buy some extra shares so as to maintain the $ value of TWR shares at 1% of my portfolio

Anyway, that's the way I read it, could be completely wrong

Good luck with it Poet.  The only free lunch I am aware of with index matters is investing in a company getting included in the index, well ahead of the official announcement.  In that respect TWR provided canny investors with a real banquet when it was index included in December 2024.
I think you're probably being quite optimistic hoping for another decent free lunch but who knows for sure, maybe you'll get a kids sized school lunch similar to the size to the Govt's free school lunch program that's slightly nutritious and somewhat adequate ;) 

Quote from: Poet on Mar 13, 2025, 10:28 AMThanks for links etc

An example maybe helps

NZX50 index is based on free float market capitalisation.

Let's say that at 7 March the NZX 50 has a 1% weighting to TWR based on TWR's market cap at 7 March

I run an index fund tracking NZX50 and I have $1 million under management so at 7 March I should have $10,000 invested in TWR so as to be tracking the index

At 20 March TWR cancels 10% of shares - so at 20 March I now only have $9000 invested in TWR shares so it is now only 0.9% of my fund

At 21 March my fund rules require that I rebalance so that I have 1% of my funds in TWR again - hence either the price of TWR has risen by 10% or I need to buy some extra shares so as to maintain the $ value of TWR shares at 1% of my portfolio

Anyway, that's the way I read it, could be completely wrong

Nobody is totally wrong (whatever this means), but sometimes statements are.

Well, in this case - your claim unfortunately is wrong.

Just a hint: Stop thinking about number of shares and start thinking about percentage of total marketcap.

If your company makes a sharesplit 10:1, would you expecty the index fund to sell 90% of its shares?

Of course not, given that the sharesplit would not change the value the fund holds. Neither does the share cancellation.

Nothing of value has changed if they increase or reduce the number of shares.

Anyway, have a good think about it ... and if this does not come to fruition - just wait and see.

Quote from: Basil on Mar 13, 2025, 10:34 AMGood luck with it Poet.  The only free lunch I am aware of with index matters is investing in a company getting included in the index, well ahead of the official announcement.  In that respect TWR provided canny investors with a real banquet when it was index included in December 2024.
I think you're probably being quite optimistic hoping for another decent free lunch but who knows for sure, maybe you'll get a kids sized school lunch similar to the size to the Govt's free school lunch program that's slightly nutritious and somewhat adequate ;) 

Great example. I hear that some poor kids got terribly burned with the gummits school lunch. Something prudent investors should avoid :) ;

Quote from: BlackPeter on Mar 13, 2025, 11:34 AMIf your company makes a sharesplit 10:1, would you expecty the index fund to sell 90% of its shares?

Of course not, given that the sharesplit would not change the value the fund holds. Neither does the share cancellation.

Nothing of value has changed if they increase or reduce the number of shares.

Anyway, have a good think about it ... and if this does not come to fruition - just wait and see.

There is a difference here

If a company makes a 10:1 share split (or consolidation?) then I wouldn't expect the shareprice of the new shares to be the same as the old shares. I would expect the split shares to be worth 10% of what the pre-split shares were worth. So an index fund holding during this process would have the exact same $ value of shares before and after hence no action required to maintain proportionality.

If as a result of the share split, the price of the new shares stayed the same as pre-split then of course the fund would need to sell 90% of the shares otherwise they would be heavily overweight this security (do you agree?)

With the TWR cancellation, commentators are suggesting that the post cap repayment share price will drop by the amount of the cap repayment (ie no free lunch). I'm just pointing out that if this is the case, then an index fund tracking the NZX 50 will need to buy more shares to maintain their position wrt TWR.

If the post cap repayment price of TWR stays the same then you are correct that an index fund doesnt need to do anything (But that would be a free lunch though wouldn't it?)

deleted

Quote from: Poet on Mar 13, 2025, 11:52 AMThere is a difference here

If a company makes a 10:1 share split (or consolidation?) then I wouldn't expect the shareprice of the new shares to be the same as the old shares. I would expect the split shares to be worth 10% of what the pre-split shares were worth. So an index fund holding during this process would have the exact same $ value of shares before and after hence no action required to maintain proportionality.

If as a result of the share split, the price of the new shares stayed the same as pre-split then of course the fund would need to sell 90% of the shares otherwise they would be heavily overweight this security (do you agree?)

With the TWR cancellation, commentators are suggesting that the post cap repayment share price will drop by the amount of the cap repayment (ie no free lunch). I'm just pointing out that if this is the case, then an index fund tracking the NZX 50 will need to buy more shares to maintain their position wrt TWR.

If the post cap repayment price of TWR stays the same then you are correct that an index fund doesnt need to do anything (But that would be a free lunch though wouldn't it?)

Maybe you don't understand the nature of index funds. If the post cap repayment price is lower, than the index obviously drops, and the index tracking fund will reflect this without the need for anybody to buy or sell shares.

That's what index funds are all about.

Quote from: BlackPeter on Mar 13, 2025, 12:52 PMMaybe you don't understand the nature of index funds. If the post cap repayment price is lower, than the index obviously drops, and the index tracking fund will reflect this without the need for anybody to buy or sell shares.

That's what index funds are all about.

Ok, maybe we need to agree to disagree here (although I do hate doing that in principal).

But before resorting to that, just one more go.

Of course an index tracking fund tracks the index passively for most of the time as you rightly point out.

What I am talking about here is the process of an index fund rebalancing (not the day-to-day BAU)

Every three months S&P determines what % of each index component is included in the total index.
If at the rebalancing date, an index fund finds itself with the incorrect % (by $ value) of various securities in their particular portfolio, then they buy and sell accordingly.

For the current rebalance at 21 March S&P will have determined TWR weighting based on the TWR market cap some weeks ago.

When 10% of a index tracking fund's TWR shares are cancelled on the 20th March (and if the TWR shareprice drops as a consequence) then that fund will have to buy extra TWR on the 21st rebalance date so that the $ proportion of TWR in the fund's portfolio remains the same.

As you say, not all funds track this way but certainly the majority of them do, I imagine that's why they are called index tracking funds.

Quote from: Poet on Mar 13, 2025, 01:32 PMOk, maybe we need to agree to disagree here (although I do hate doing that in principal).

But before resorting to that, just one more go.

Of course an index tracking fund tracks the index passively for most of the time as you rightly point out.

What I am talking about here is the process of an index fund rebalancing (not the day-to-day BAU)

Every three months S&P determines what % of each index component is included in the total index.
If at the rebalancing date, an index fund finds itself with the incorrect % (by $ value) of various securities in their particular portfolio, then they buy and sell accordingly.

For the current rebalance at 21 March S&P will have determined TWR weighting based on the TWR market cap some weeks ago.

When 10% of a index tracking fund's TWR shares are cancelled on the 20th March (and if the TWR shareprice drops as a consequence) then that fund will have to buy extra TWR on the 21st rebalance date so that the $ proportion of TWR in the fund's portfolio remains the same.

As you say, not all funds track this way but certainly the majority of them do, I imagine that's why they are called index tracking funds.

I understand what you try to convey, but it is based on wrong assumptions.

TWR is part of the index, and no matter what happens wth its marketcap, it will move the index accordingly.

The only balancing index funds need to do happens
a) when they are created and
b) when stocks fall out of the index or go into the index.
c) when investors remove or add funds

Everything else happens courtesy to the nature of index funds.

So - assuming TWR won't drop  out of the index (for this time its probably anyway too late) - there is no rebalancing to do.

Noticed Invest Direct have reduced my shares today to allow for the 1:10 buy back capital return.

They also seem to have upped the last close SP to reflect these changes as my av SP holding is now valued at $1.4571 (versus last close at $1.43)

https://api.nzx.com/public/announcement/448612/attachment/439861/448612-439861.pdf

Nice to have the prospect of cash being returned 2 April at a rate well above my average holding SP. The bonus alone will pay my insurance bills for over 2 yrs! Been a great investment so far.

What happens to the TWR SP after trading resumes will be interesting.

Sharesight don't seem to have got this right or I'm horribly confused as to what's going on.

Quote from: Left Field on Mar 18, 2025, 04:48 PMNoticed Invest Direct have reduced my shares today to allow for the 1:10 buy back capital return.

They also seem to have upped the last close SP to reflect these changes as my av SP holding is now valued at $1.4571 (versus last close at $1.43)

https://api.nzx.com/public/announcement/448612/attachment/439861/448612-439861.pdf

Nice to have the prospect of cash being returned 2 April at a rate well above my average holding SP. The bonus alone will pay my insurance bills for over 2 yrs! Been a great investment so far.

What happens to the TWR SP after trading resumes will be interesting.

I guess they have tried to compute a theoretical after-cancellation price.

the calculation will be assuming that your total investment is the same after cancellation as it was before.

So if you had 10 shares before cancellation then your total investment was $14.30.

You have lost one share and received $1.18 in cash so theoretically (according to sharesight) your remaining shares will be worth $14.30 minus $1.18 = $13.12 (or 145.7c for each of 9 shares)

anyway, that will all be moot once we see the actual price on Thursday.

Brokers predicted TWR's post cap raise SP to range between $1.50 - $1.70 as I recall.

So it took a while, but today the market seemed to wake up to the implications of the 1:10 capital return and the SP has moved to $1.50 (ish) with an earlier big 1.8 mill crossing at $1.45 (clever.)

Happy to hold at 12% of my portfolio after using some of my anticipated cap return proceeds to buy a few more with my av SP over 50% below current levels. Hopefully well positioned.  ;)

Quote from: BlackPeter on Mar 13, 2025, 12:52 PMMaybe you don't understand the nature of index funds. If the post cap repayment price is lower, than the index obviously drops, and the index tracking fund will reflect this without the need for anybody to buy or sell shares.

That's what index funds are all about.

Well, now we are past the 21 March rebalance. I'm going to call it in my corner.

Trade volume yesterday was 2.2 million shares on a price rise of 2.5c to $1.475

That was index funds topping up as a consequence of the share cancellation.

Interestingly that 2.2 million volume is consistent with being a 10% top up for the 17 million shares that were traded ie (bought by index funds) on 21st October 2024 when TWR first entered the NZX50

It'll be interesting to see where the share price goes after this, given the unusually high volume on Friday which may or may not be related to extra demand regarding index adjustment.  Now that's done and dusted, where too from here ?

Quote from: Poet on Mar 22, 2025, 01:14 PMWell, now we are past the 21 March rebalance. I'm going to call it in my corner.

Trade volume yesterday was 2.2 million shares on a price rise of 2.5c to $1.475

That was index funds topping up as a consequence of the share cancellation.

Interestingly that 2.2 million volume is consistent with being a 10% top up for the 17 million shares that were traded ie (bought by index funds) on 21st October 2024 when TWR first entered the NZX50

You have any hard evidence that index funds did buy? ... or is this just a case of first crower claiming the worm? Lets face it - your "evidence" so far is at best circumstancial .... and the rooster who crows first normally misses the feed ...

Quote from: BlackPeter on Mar 22, 2025, 02:58 PMYou have any evidence that index funds did buy - or is this just a case of first crower claiming the win?

Circumstantial.

Bain selling .
Should be interesting.
TWR still trading on very modest ratios currently in my opinion.

Quote from: lorraina on Mar 31, 2025, 09:22 AMBain selling .
Should be interesting.
TWR still trading on very modest ratios currently in my opinion.

Question is - which way will the SP go?
All depends, I guess, on who they sell to and at what price.

https://api.nzx.com/public/announcement/449250/attachment/440604/449250-440604.pdf

Its hard to figure out why an investment company would build the maximum 19.9% stake allowed, (without a takeover) and then sell the lot ? 

Quote from: Basil on Mar 31, 2025, 10:35 AMhttps://api.nzx.com/public/announcement/449250/attachment/440604/449250-440604.pdf

Its hard to figure out why an investment company would build the maximum 19.9% stake allowed, (without a takeover) and then sell the lot ? 

They've held for 7 years

Bought Vero shares at 80 cents

Obviously not interested in Tower any more

Quote from: Basil on Mar 31, 2025, 10:35 AMhttps://api.nzx.com/public/announcement/449250/attachment/440604/449250-440604.pdf

Its hard to figure out why an investment company would build the maximum 19.9% stake allowed, (without a takeover) and then sell the lot ? 

They well might have noticed that they hold a high risk stock which currently trades at a premium. Given that even so called "smart money" can't predict future adverse weather events (other that they will be more frequent, we all know that), they prefer to sell as long as the SP is high.

Makes sense to me.

Quote from: winner (n) on Mar 31, 2025, 10:39 AMThey've held for 7 years

Bought Vero shares at 80 cents

Obviously not interested in Tower any more

Yep, tends to be the modus operandi of private equity firms - invest in an undervalued stock then, at the right time, sell and move on to the next target. Market doesn't appear to be fussed one way or the other.

Well the TWR buy back money is in the bank ready to be recycled.lol.

Other channel says Bain shares being hocked off at $1.30

Quote from: winner (n) on Mar 31, 2025, 11:32 AMOther channel says Bain shares being hocked off at $1.30

Forsyth Barr handling it , expecting scaling ....

Quote from: winner (n) on Mar 31, 2025, 11:32 AMOther channel says Bain shares being hocked off at $1.30

Bain bought in at 80c so I guess that represents a good return. Seems low but that volume would be hard to shift without a heavy discount otherwise. A bargain for the buyer(s) in my view, but retail investors once again will suffer the most if the SP tumbles. If it does, then Towers share buy-back/cancellation leaves investors in a worse position.

:
On 31 March 2025, Dent entered into a block trade agreement (the Agreement) with
Forsyth Barr Limited and Goldman Sachs New Zealand Limited (the Joint Lead
Managers) (amongst others) under which Dent appointed the Joint Lead Managers to use
their best endeavours to procure purchasers for 68,306,802 ordinary shares in Tower
Limited (being its entire holding) for a fixed price of NZ$1.30 per share (or
NZ$88,798,842.60 in aggregate).

Was around double the demand for shares I got 55% of the applied amount.

Encouraging day for holders after the Bain departure...... onwards and upwards.

(The new owners will be happy.)

Interestingly market cap down by $35 million but freefloat for purposes of NZX50 inclusion (and weighting) now up by $100 million.

I expect we will hear a preview of the half year result in the next couple of weeks - I expect $40m NPAT and a 5c per share dividend (probably unimputed)

Well mixed thoughts.

So after the strategic review no new owner was forethcoming. CEO departs and now we have Bain selling out completely on market. Bain had a good understanding of the business and more importantly are aware of recent trading and future issues not yet reported via its appointed board member Marcus Nagel.

Agree fundamentals look excellent. Bain have done well with Tower and it could be that they see better opportunities  given the large increase in Towers share price.

https://www.newprivatemarkets.com/ambienta-secures-largest-ever-exit-as-bain-capital-acquires-namiral/

Caution prevailed. Decided to not participate in sell down.

Quote from: Shareguy on Apr 02, 2025, 07:01 AMCaution prevailed. Decided to not participate in sell down.

Same..... happy to hold at 10% of my portfolio with over 60% return to date.

I think it's fair to comment that in terms of this year's $50m extreme weather provision, we've now got to the point that the cyclone season has been pretty much de-risked this year.  That and the fact there's 10% less shares on issue means the shares certainly measure up on a value basis with the super low PE, aided and abetted by likely extra income from the extreme weather provision.  I don't think anyone would try and make the case the metrics are not attractive.  I think there's a very good case for holding some as a natural hedge such that dividends expected hedge or offset completely, insurance premiums.
https://api.nzx.com/public/announcement/449498/attachment/440893/449498-440893.pdf

Forbar.
Earnings: Underlying NPAT for FY25 lifts +33% to NZ$85.9m on reduced large events and BAU claims with minor FY26/FY27 cuts.
Spot valuation: Rises +NZ5 cps to NZ$1.95, on the one-off short-term earnings uplift from benign weather.

Quote from: Left Field on Apr 02, 2025, 09:43 AMSame..... happy to hold at 10% of my portfolio with over 60% return to date.

Congrats for making a decent capital gain with this cyclical. The thing is just, long term performance of Tower was dysmal (avg 2 cents per year EPS since 2016, even with the latest result). The trick with cyclicals is not to fall in love and to sell them while they are high, which might be now.

Interesting extreme weather warnings for several part of NZ:

https://www.metservice.com/warnings/home

Quote from: BlackPeter on Apr 03, 2025, 08:59 AMThe trick with cyclicals is not to fall in love and to sell them while they are high, which might be now.

Is TWR high now? I'm not so sure it is...

Looks as if Salt have picked up an extra 6 million shares since the share cancellation. Presumably most of these were from Bain selldown.
https://www.nzx.com/announcements/449513

Quote from: raW tent Buffer on Apr 03, 2025, 09:06 AMIs TWR high now? I'm not so sure it is...

Who knows.

If you look at the long term average of 2 cents EPS (yes, this includes a number of years with losses), than the share would be (at a PE of 8.5 - Grahams formula) worth 17 cents, obviously a bit more if you see some sustainable growth.

If you assume that the bad times are over for good (quite risky assumption, but hey ... ), and we assume the EPS hanging around the 20 cents for all times to come, then the share would be worth (based on Grahams formula) something like $1.70.

Future growwth? I don't see where it would come from given that we are currently in a goldylock situation with high rates and lower claims, but again - everybody is entitled to their own dreams.

Is the share currently on a high? You are the judge. If you see lots of growth potential and new customers queing up ... go for it.

From Craigs  conviction list

Key catalysts next 6-12 months
Much like FY24, TWR is benefiting from benign weather in FY25, following a volatile year in FY23 which was impacted by abnormally high levels of reinsurance inflation, a multitude of large events (1 in 200 & 1 in 400 year events) and increased motor crime. While TWR upgraded its FY25 NPAT guidance range by 18% (at the midpoint) in early Feb-25, to $60m - $70m, the Group only used c.$3m of its $12.5m budgeted large events allowance in the first 4-months of the financial year. As a reminder, any unused portion of TWR's large events allowance come year end (September), drops to the bottom line, and would likely result in higher dividends.
TWR is currently benefiting from reduced reinsurance pricing, which is a function of 1) global reinsurance market prices moderating (noting some risk going forward in relation to the recent wildfires in California) 2) TWR's increased scale, and 3) the impact of TWR's risk-based pricing (particularly evident in the favourable claims data from large events in 2023).
Given Bain Capital has recently sold down its entire c.20% shareholding in TWR, the Company now has an improved free float (better liquidity). Subsequently we expect TWR to be up-weighted in the NZX50, come the next index rebalance.

Thanks Shareguy. I've been quietly adding a few.

Nice upgrade and update......holders will be happy.

https://www.nzx.com/announcements/450346

Quote from: Left Field on Apr 22, 2025, 08:37 AMNice upgrade and update......holders will be happy.

https://www.nzx.com/announcements/450346

Given that they certainly didn't prepare this today ... just wondering whether they took already the damage from this weekends deluge (Ex-cyclon Tam) into account? I suspect claims will start coming in from today ...

Fantastic news on another down day on Wall Street.

Good news but tinged a little sour by the last paragraph. I don't like the sound of "significant volume of reopened claims from undiscovered damage and inadequate repairs" re the CCH earthquakes

Quote from: raW tent Buffer on Apr 22, 2025, 09:19 AMGood news but tinged a little sour by the last paragraph. I don't like the sound of "significant volume of reopened claims from undiscovered damage and inadequate repairs" re the CCH earthquakes

Its hard to know what to make of that.  Good update though and don't forget there's 10% less shares on issue. I put my hand up for a few more.

You have to love it when you get an underlying profit upgrade AND a reported profit downgrade on the same day  ;D

I don't, that confuses the dog's brain lol.

Kieran Carling has published a comprehensive note on Tower overnight ahead of their interim result – another great Title from our Carling ("Mainly fine with some isolated claims") reflecting his pedigree as the 2021 & 2024 Title holder and protégé of the legendary Chris Byrne who achieved the historic Title "three-peat" (2018-2020) ... back to the note ... TWR delivered another solid update ahead of its 1H25 result (20th of May), lifting uNPAT guidance by 15% at the midpoint, from a range of $60m - $70m to $70m to $80m. The upgrade reflects ongoing benign weather, fewer total-loss house claims, and easing inflation, which has more than offset the impact of softening GWP growth. Carling has tapered his GWP forecasts to reflect more competitive pricing in the market, but notes the ongoing rationale for his Overweight recommendation on TWR including 1) TWR trading at a 48% discount to industry peers (25% historically), 2) FY26 gross yield is 12.4% 3) continuing to demonstrate operational improvements, and 4) TWR has only used c.$3m of its $50m large events allowance YTD, which could present further EPS/dividend upside as the year progresses. The upgrade to Guidance met with a more subdued reaction from the market due to the softening in Gross Written Premium (GWP). TWR has a medium term aspiration of growing GWP at 10-15% but has recently guided lower (from 7-12% to c5% now). While TWR has again called out volume growth in lower-risk policies as a driver, Carling expects the reduction is more heavily weighted to competitive pricing in the market (particularly for motor). Based on the midpoint of TWR's guidance range, we expect that TWR's BAU claims ratio is tracking at c.44% in FY25 which is well below the historical average (c50%). What remains unclear however, is extent to which TWR's focus on risk selection has contributed to this reduction (as opposed to benign weather). Any structural decline in the BAU claims ratio, would present upside to our forecasts. Carling has made numerous forecast tweaks (see note below) but his Target Price remains broadly unchanged at $1.65, we reiterate the Overweight.


Currently trading at FY25 forecast PE of 6.7.  Plus trading at 48 percent below industry peers. And that divi is so good.

And as Discovery funds say

It's important to remember that, whilst in the short-term
stock prices can be volatile, in the medium term, prices
follow company earnings......

Thanks mate, I have added a few more on recent weakness not forgetting there's 10% fewer shares on issue which boosts eps.  I presume that super low PE assumes full utlization of their $50m extreme event reserve?

I would think weather events this month might eat up some of that $50m.

Quote from: Basil on May 02, 2025, 01:11 PMThanks mate, I have added a few more on recent weakness not forgetting there's 10% fewer shares on issue which boosts eps.  I presume that super low PE assumes full utlization of their $50m extreme event reserve?

I would think weather events this month might eat up some of that $50m.

Yes Basil assumes full utilisation less the $3m already allocated. Only 5 months of the year left.

Quote from: Shareguy on May 02, 2025, 01:33 PMYes Basil assumes full utilisation less the $3m already allocated. Only 5 months of the year left.

Crickey, that's super low metrics + the real chance of a meaningful portion of that $50m reserve translating to more earnings.  On top of that, with Bain's recent 20% shareholding sell down, Tower gets rebalanced much higher in next month's NZX50 index rebalancing due to much higher free float of shares.  Seems compelling to me.  Might get some more.

Forsyth Barr now a substantial holder......joining the TWR fan club.

https://api.nzx.com/public/announcement/451571/attachment/443276/451571-443276.pdf

Onwards & upwards.

Quote from: Shareguy on Apr 10, 2025, 07:15 PMFrom Craigs  conviction list

Key catalysts next 6-12 months
Much like FY24, TWR is benefiting from benign weather in FY25, following a volatile year in FY23 which was impacted by abnormally high levels of reinsurance inflation, a multitude of large events (1 in 200 & 1 in 400 year events) and increased motor crime. While TWR upgraded its FY25 NPAT guidance range by 18% (at the midpoint) in early Feb-25, to $60m - $70m, the Group only used c.$3m of its $12.5m budgeted large events allowance in the first 4-months of the financial year. As a reminder, any unused portion of TWR's large events allowance come year end (September), drops to the bottom line, and would likely result in higher dividends.
TWR is currently benefiting from reduced reinsurance pricing, which is a function of 1) global reinsurance market prices moderating (noting some risk going forward in relation to the recent wildfires in California) 2) TWR's increased scale, and 3) the impact of TWR's risk-based pricing (particularly evident in the favourable claims data from large events in 2023).
Given Bain Capital has recently sold down its entire c.20% shareholding in TWR, the Company now has an improved free float (better liquidity). Subsequently we expect TWR to be up-weighted in the NZX50, come the next index rebalance.

Interesting that both Craigs, and now Forsyth Barr through their actions, are both now very bullish.

I note that nzx listing has pe at 7.1 at current shareprice. $476m capitalization.
My calculations give me pe either
6.6 at reported 2024 npat or 5.6 at underlying 2024 npat.
Why is that? Can anybody shine some light

Not sure Poet, maybe due to confusion around number of shares on issue ?  Craigs issued a note earlier this month which must have been based on the lower number of shares after the capital repayment.  They have FY25 PE at 6.7 at a share price of $1.34  (This assumes full utilization of the $50m extreme weather provision).  Screams "cheep" louder than a cage full of budgies don't you think ?
Net yield 8.6%.  Not safe in my opinion to opine on whether there will be full, partial or no imputation credits with that.
FWIW I bought some more this morning.

Quote from: Basil on May 14, 2025, 02:51 PMNot sure Poet, maybe due to confusion around number of shares on issue ?  Craigs issued a note earlier this month which must have been based on the lower number of shares after the capital repayment.  They have FY25 PE at 6.7 at a share price of $1.34  (This assumes full utilization of the $50m extreme weather provision).  Screams "cheep" louder than a cage full of budgies don't you think ?
Net yield 8.6%.  Not safe in my opinion to opine on whether there will be full, partial or no imputation credits with that.
FWIW I bought some more this morning.

Good for you topping up. I'm more than full atm at 10% of portfolio so not adding.

Quote from: Basil on May 14, 2025, 02:51 PMNot sure Poet, maybe due to confusion around number of shares on issue ?  Craigs issued a note earlier this month which must have been based on the lower number of shares after the capital repayment.  They have FY25 PE at 6.7 at a share price of $1.34  (This assumes full utilization of the $50m extreme weather provision).  Screams "cheep" louder than a cage full of budgies don't you think ?
Net yield 8.6%.  Not safe in my opinion to opine on whether there will be full, partial or no imputation credits with that.
FWIW I bought some more this morning.

And even that doesn't sound right. At midpoint of guided unpat ($75m) I calculate pe of 6.1 assuming full utilization of large events allowance.
I expect the final result to be closer to 5 if benign weather continues, so yes, cheap as chips atm

Yeap, excerpt from Craigs note, trading at just on half its industry peers.  Priced cheaper than yesterday's newspaper I reckon.

QuoteTWR 1) currently trades at a
 48% discount to industry peers (25% historically), 2) offers an FY26 gross
 yield of 12.4%, 3) is continuing to demonstrate operational improvements, and
 4) has only used c.$3m of its $50m large events allowance YTD, which could
 present further EPS/dividend upside as the year progresses. For the
 above-mentioned reasons, we retain our Overweight recommendation

The PE ratio and yield look attractive.   However, I find it really hard to understand what is the expected long term earnings and how exactly they manage the risk of a large natural disaster.

Took me quite a while to get my head around the whole reinsurance thing. As I understand it,  Their reinsurance rates have dropped as part and parcel of their more accurately priced risk based geographic modelling with their premiums.  That and their large events allowance keeps going up in line with the effects of climate change, last year this provision was $45m and this year $50m.  Hopefully some others will chime in and explain it better than this pretty modest attempt.

Quote from: Dolcile on May 14, 2025, 04:13 PMThe PE ratio and yield look attractive.   However, I find it really hard to understand what is the expected long term earnings and how exactly they manage the risk of a large natural disaster.

Docile, have you read the last two TWR annual reports? The Chairperson & CEOs comments provide most of the answers you seek.

There was also a press release detailing their reinsurance negotiation success and the positive implications of risk spreading and cost savings. 

Another risk mitigation tactic is to only allocate a small (speculative) portion of your portfolio to TWR. FWIW I started at 5% but it has grown to 10% of my portfolio.

If you are still concerned then TWR may not be suited to you. No issues, lots of other investments out there.

I'm looking forward to hearing tomorrow that underlying HY25 NPAT was above $50m and a 7-8c per share dividend

I have sold out of most of my shares including Tower to buy a property. Tower has certainly been a good share to own.

Best of luck to holders

Good luck with your property purchase Shareguy.

It'll be good to get clarity around earnings, the recent commentary regarding historical Christchurch claims, the likely cost of recent floods giving more insight into the remaining level of unused $50m extreme weather provision, the rate of forward gross premium growth, the dividend level and if its imputed.  I think you might be a bit ambitious Poet, but we will know more tomorrow.

Quote from: Basil on May 19, 2025, 05:57 PMGood luck with your property purchase Shareguy.

It'll be good to get clarity around earnings, the recent commentary regarding historical Christchurch claims, the likely cost of recent floods giving more insight into the remaining level of unused $50m extreme weather provision, the rate of forward gross premium growth, the dividend level and if its imputed.  I think you might be a bit ambitious Poet, but we will know more tomorrow.

dividend unlikely to be imputed and there may be some adjustments to reported profit for CEQ and customer remediation but I will be very disappointed if underlying npat is under $50m

Quote from: Poet on May 19, 2025, 07:30 PMdividend unlikely to be imputed and there may be some adjustments to reported profit for CEQ and customer remediation but I will be very disappointed if underlying npat is under $50m

I trust you are not disappointed then =)

20 May 2025
Tower reports strong half year profit
Kiwi insurer, Tower Limited (NZX/ASX: TWR) today reported its results for the half year to 31
March 2025, recording an underlying net profit after tax (underlying NPAT) of $61.7m and a
reported profit of $49.7m.
The strong results were due to continued improvements in business-as-usual (BAU) claims
performance, continued gross written premium (GWP) growth and improvements in the
management expense ratio (MER). Reported profit includes provisions for ongoing customer
remediation-related costs and an increase in Canterbury earthquake cost estimates, due to
Tower continuing to receive more over-cap claims than expected from the Natural Hazards
Commission (NHC).
Summary of HY25:
• Underlying profit $61.7m vs $36.6m in HY24
• Reported profit $49.7m vs $36m in HY24
• GWP $297m, up 4%1 on HY24
• BAU claims ratio 38.1% vs 49.7% in HY24
• MER improved to 30.4% vs 31.3% in HY24
• Large events costs $3m vs -$1.9m in HY24
• Customer numbers grew to 312,000, up from 309,000 in HY24
• Combined operating ratio (COR) 69.7% vs 80.2% in HY24
• Fully imputed interim dividend of 8 cents per share.

V Happy with TWR result.......great 8c interim divi which will see full yr divi nicely over 10% on my av SP..... with more cap gains to come.

Onwards and upwards....... BAU.

Quote from: raW tent Buffer on May 20, 2025, 08:38 AMI trust you are not disappointed then =)

🤑
Amazing result
Go Tower

Really happy with the result.  Absolutely stoked with the 8 cps dividend and the fact it IS fully imputed.
Presentation is here  https://api.nzx.com/public/announcement/451862/attachment/443631/451862-443631.pdf
I note from the call notes they are targeting a return to ~ 15% Gross premium level's by FY27.
I also note large event allowance including the recent Cyclone Tam has only been used to the extent of $7m, so $43m remaining ( ~ 4 months of the year to run) and cyclone season is now well and truly over.

I'm expecting a very strong result for the full year including a large part of that unexpended remaining large events allowance and if we get another 8 cps fully imputed dividend that 16 cps fully imputed = 22.22 cps gross (16/0.72) or a 15.4% gross yield.  On my goodness...

You've got to love that all this strong growth is now on 10% less shares on issue really boosting eps even further.

Looking at the half year underlying profit after tax of $61.7m on 342.55m shares on issue after the capital return that's eps of a whopping 18.01 cps.   I'm tempted to annualize that and work out the PE but I will leave that pleasure for others lol...oh all right then, its 4.0 on a share price of $1.44.

Quote from: Basil on May 20, 2025, 09:31 AMReally happy with the result.  Absolutely stoked with the 8 cps dividend and the fact it IS fully imputed.
Presentation is here  https://api.nzx.com/public/announcement/451862/attachment/443631/451862-443631.pdf
I note from the call notes they are targeting a return to ~ 15% Gross premium level's by FY27.
I also note large event allowance including the recent Cyclone Tam has only been used to the extent of $7m, so $43m remaining ( ~ 4 months of the year to run) and cyclone season is now well and truly over.

I'm expecting a very strong result for the full year including a large part of that unexpended remaining large events allowance and if we get another 8 cps fully imputed dividend that 16 cps fully imputed = 22.22 cps gross (16/0.72) or a 15.4% gross yield.  On my goodness...

You've got to love that all this strong growth is now on 10% less shares on issue really boosting eps even further.

Looking at the half year underlying profit after tax of $61.7m on 342.55m shares on issue after the capital return that's eps of a whopping 18.01 cps.   I'm tempted to annualize that and work out the PE but I will leave that please for others lol...oh all right then, its 4.0 on a share price of $1.44.

Certainly exceeded my expectations by some margin - and particularly with them being able to fully impute the dividend. Full year result should be a boomer especially since we shouldn't see those non-underlying items being so large - EQC re-opens will feature for some time yet but hopefully less $$ than in the first half and we definitely shouldn't see a repeat of the additional $5m for customer remediation that is included in the HY.
Given continuing benign weather, I'd expect FY underlying NPAT to be above $120m and reported NPAT above $105m Final dividend in the region of $12c per share.

I'm a bit surprised this hasn't moved higher than it has!   Thought it was good buying at 1.53 this morning but seems I could have got some cheaper!

Quote from: Poet on May 20, 2025, 10:19 AMCertainly exceeded my expectations by some margin - and particularly with them being able to fully impute the dividend. Full year result should be a boomer especially since we shouldn't see those non-underlying items being so large - EQC re-opens will feature for some time yet but hopefully less $$ than in the first half and we definitely shouldn't see a repeat of the additional $5m for customer remediation that is included in the HY.
Given continuing benign weather, I'd expect FY underlying NPAT to be above $120m and reported NPAT above $105m Final dividend in the region of $12c per share.

Thanks for your thoughts Poet.  Yes, paying full tax now so no reason whatsoever future dividends can't be fully imputed.  Gosh, a final divvy of that size in December just before Christmas would be most welcome.  Metrics are compelling to say the least !

QuoteRawz on the other channel. Tomorrow new broker targets will come out all over $2 per share.

Come June/July TWR will upgrade FY25 guidance which will be 3rd upgrade.

Broker targets will then be upgraded again.

We can sit back on the huge div yield waiting for it to play out.

Couldn't agree more plus don't forget the NZX50 index rebalance a month from now on 20 June due to 25% greater free float of shares.

Quote from: Basil on May 20, 2025, 12:56 PMCouldn't agree more plus don't forget the NZX50 index rebalance a month from now on 20 June due to 25% greater free float of shares.

Hmm, not quite 25%. There have been a couple of new SSH notices since the Bain sell down. If I'm not mistaken any holding above 5% is excluded from free float calculations. Notwithstanding that though, you are right, the index rebalance will increase the weighting of TWR and necessitate index funds to top up.

Quote from: Basil on May 20, 2025, 11:14 AMThanks for your thoughts Poet.  Yes, paying full tax now so no reason whatsoever future dividends can't be fully imputed.  Gosh, a final divvy of that size in December just before Christmas would be most welcome.  Metrics are compelling to say the least !

True, forward metrics looks compelling if we forget the past and assume that things will go from here only into one direction: upwards, as they always do, don't they?

Trying to learn from the past - and Tower used to be a heavily cyclical company with a tendency of extensive flatlining on very low earning levels including several years of loss making. What did they change to avoid cycling back into this misery?

Their average annual EPS since 2016 is a measly 4 cents per share and year!

Not quite sure which formula to use to turn this into an undervalued company ... but anyway - I hope holders enjoy the good times and find the exit before the music stops :) ;

Quote from: Poet on May 20, 2025, 01:10 PMHmm, not quite 25%. There have been a couple of new SSH notices since the Bain sell down. If I'm not mistaken any holding above 5% is excluded from free float calculations. Notwithstanding that though, you are right, the index rebalance will increase the weighting of TWR and necessitate index funds to top up.

Not sure how it works mate.  For example the Forsyth Barr SSH is for shares they're holding as custodian for lots of clients so does that get excluded from free float calculations ? I have no idea.

Just a thought BP, maybe try reading the presentation, I posted a link in post #376 above.  There's a lot in there to enhance your understanding of how the company has changed, if you're really interested ?

Crikey, just over a year ago I was looking for a 'finance stock' to add to my NZ portfolio.

Looked hard at HGH, but v happy to have chosen TWR.

Capital gains as per the chart below, plus what looks set to be at least a 16% div yield this year (ForBar updated estimate,) for those of us fortunate enough to be holding at under $1.00 av SP.

Naaaice.... onwards and upwards.

Quote from: Basil on May 20, 2025, 03:12 PM...

Just a thought BP, maybe try reading the presentation, I posted a link in post #376 above.  There's a lot in there to enhance your understanding of how the company has changed, if you're really interested ?

I did. And yes, they describe as well some costsaving measures (which is good). It sounds as well that they are getting more sophisticated in assessing and charging for risks. Only time (and the next black swan) will tell, whether they got it right.

However - the biggie in their savings this year was peaceful weather, and this is something you hardly can attribute to improved management, can you?

Anyway - maybe I am just suffering confirmation bias. In the past I have been badly burned by holding shares of a small insurance company with roots in the islands (CBL), with a management team which compensated its (accounting and insurance risk) incompetence with overconfidence. They did not even need a black swan to kill the company, they just missed (or ignored) a long tail of claims ...

Wishing holders all the best and that this other small insurance company from the island is better equipped and that black swans and long tails stay off their books. But anyway, I am sure that you won't do a couta on them anyway.

LOL, it crossed my mind to go hard or go home because of the truly compelling metrics BUT discipline with portfolio allocation is the name of the game when one is close to retirement, as there's simply isn't much time to fix one's mistakes, perhaps something a former poster on here should have always kept in mind.

Sure, benign weather has been a huge help with this result, but offsetting that to some extent is legacy issues with Christchurch earthquake.  If you extract the net positive effect of both out of this result, the metrics are still compelling but yes, I acknowledge at any point investors have the potential to face up to another major black swan event, so one needs to factor that into their investment thinking too.

Look, to be honest mate, I was a "doubting Thomas" for a long time too which is why I was slow to get on board.   Had nagging doubts if the rate of their premium increases would be sufficient to keep up with the risks incumbent with climate change, among other things, but they do seem to be taking good steps towards risk mitigation and measuring those risks more carefully and charging appropriate premiums.

Thanks for your good wishes BP.  I acknowledge one does need a bit of good luck when it comes to investing in insurance companies.  I'm genuinely sorry to hear of your awful experience with CBL. I totally understand how that makes you gun-shy on this sector.  Once bitten, twice shy.

Quote from: Basil on May 21, 2025, 10:37 AMLook, to be honest mate, I was a "doubting Thomas" for a long time too w

Yes Basil good to acknowledge you past sins...lol

TWR was topic d jour at one of those Xmas oyster scoffing events many moons ago and you certainly poo pooed it like a beagle that ate a chocolate bar...

However like a very good doggy...the sense of a good feed got the better of you and now you are a cheerleader

Best of Luck with TWR.

I have a very small holding since 2019 @0.56....it was a very slow burn in the early years but certainly has come to life in the last couple of years...so maybe your timing is good.

LOL mate, I remember that happy occasion very well.  Quite some years ago and I gave poor old Ronaldson so much negative feedback I'm surprised he still hung in there lol.  If I recall correctly the shares were 85 cents at the time.  I bought quite a lot at $1.02 in July last year so maybe the hounds timing isn't too bad.  That and they have done a lot to improve their business model over the last few years so I am comfortable with my timing...you can't have perfect timing on every stock you buy lol...$1.60 for plenty of Turners in April 2020 was what this hound would call 'purrfect" timing.

Possibly worth income investors noting that Forsyth Barr are forecasting 16 cps fully imputed this year, (gross yield at $1.47, a stunning 15.1%,) and this assumes full utilization of the $50 extreme event reserve.  This drops on their assumption of a more normal level of business as usual claims to a still very high 12.8% gross next year and 14.2% the year after that...all assuming full utilization of that reserve for all those years.

Divvy payout ratio is 60-80% where its prudent to do so, so there's potential for the divvies to be higher in favorable weather conditions that those of us that enjoy boats, absolutely love.

Anyway for the low PE doubters, Forbar projecting
FY25 eps 27.4 dps 16
FY26 eps 18 dps 13.5
FY27 eps 20 dps 15
Clearly they are forecasting a return to more normal weather patterns, if there is such a thing, in future years.
Target price is $1.71

A picture is worth a thousand words, they say..... TWR has been a great performer for those who got on board in the 60c - 80c range just over 1 year ago.

SP still showing upwards potential $1.50 heading to $1.70 and beyond  (with the growing divvies icing on the cake!)

Today and tomorrow are your last chances to buy and get the fully imputed dividend of 8 cps on 26 June.  Trades ex divvy on Wednesday 11th. https://api.nzx.com/public/announcement/451862/attachment/443633/451862-443633.pdf

Looks a good choice for the new CEO..... always good for continuity to promote talent from within.

https://www.nzx.com/announcements/453211

QuotePaul's strategic and operational experience, together with his sharp focus on insurance profitability and adept navigation of recent complex and challenging market conditions positions him as the ideal candidate to drive Tower's continued success," he said.

Great move.  Results have been heaps better since he joined as CFO in January 2022.

Rawz - other channel.

QuoteAm I going crazy here? TWR trades on a PE of 6. Dividend yield of 11% and we have 3 months to go before EOFY when we are going to get another windfall payment if the large event allowance isnt used?
this is super cheap.
disc. holder

Screams cheap louder than a cage full of budgies.  Dividend payment date is 26 June.  D.I.Y dividend reinvestment program is a good idea in my opinion.

Expect a profit upgrade soon - to maybe around $90m plus any unused large claims fund, which could be substantial if Mother Nature continues to play ball. The SP is crazy low at the moment and one has to expect/hope it will surge on the next upgrade.

I came across SDF in Aussie.PE ratio 28.08 yield 3.08%
Certainly makes TWR look cheap.
Steadfast Group Limited (SDF) provides services to steadfast Network brokers, distribution of insurance policies via insurance brokerages and underwriting agencies, and related services. The Group's corporate structure includes equity investments in insurance intermediary entities (insurance broking and underwriting agencies), premium funders and complementary businesses. They majorly operate in Australasia, with growing operations in Asia and Europe.

For those that don't know, IAG Australia (ticker code IAG) dominate the market here under various brands that give the illusion of competition.  https://en.wikipedia.org/wiki/IAG_New_Zealand  Its currently on a PE of 16.6.  Next biggest here is Suncorp, ticker code SUN and its on a PE of 15.3

Forsyth Barr have TWR on a normalized (assumes normal weather patterns and full utilization of FY26 large adverse event allowance), of 8.  They note this is at a 48% discount to its Australian peers and the average over the years is 25%.   Moving back to the average discount of 25% would see TWR on a normalized PE of 12 and implies 50% upside from here.

The PE is likely to be much lower this year thanks to benign weather conditions in the first half.  Forsyth Barr commented that on average only about 20% of extreme weather events happen in the second half and we're almost half way through the second half. 

It seems highly likely a substantial portion of the $50 extreme weather allowance will be paid out as a special dividend this year.  (Tower have commented in the call that unused extreme weather provision is likely to be paid out as a special divvy contemporaneously with the final divvy) 

It does feel really undervalued. In this cases I always question why, but in this case couldn't come up with anything? I guess just not fully appreciated by local investors. 

I would welcome any views on this.

Quote from: Dolcile on Jun 18, 2025, 12:58 PMIt does feel really undervalued. In this cases I always question why, but in this case couldn't come up with anything? I guess just not fully appreciated by local investors. 

I would welcome any views on this.

The metrics are compelling but the SP will always lag behind the metrics as it reflects the risk of a catastrophic event over and above what Tower has provided for. And in that event Tower becomes a loss making/no dividend business for a few years at least. And the SP goes off the cliff. That risk factor - no matter how unlikely -  is always there, so very risk adverse investors (and I'd include my self in that category) will either give it a miss or have a small holding. I'm likely to take profits at some stage and move on, but not yet as I think TWR will have a stellar year and there a good chance of a special dividend.

Quote from: LoungeLizard on Jun 18, 2025, 02:04 PMThe metrics are compelling but the SP will always lag behind the metrics as it reflects the risk of a catastrophic event over and above what Tower has provided for. And in that event Tower becomes a loss making/no dividend business for a few years at least. And the SP goes off the cliff. That risk factor - no matter how unlikely -  is always there, so very risk adverse investors (and I'd include my self in that category) will either give it a miss or have a small holding. I'm likely to take profits at some stage and move on, but not yet as I think TWR will have a stellar year and there a good chance of a special dividend.

From memory their reinsurance limit is now up to $875m so unless you're talking about another Christchurch earthquake type event...  I like the way the company has gone about things in terms of overall risk management and ensuring more accurate risk based pricing in recent years.

Quote from: Basil on Jun 18, 2025, 04:09 PMFrom memory their reinsurance limit is now up to $875m so unless you're talking about another Christchurch earthquake type event...  I like the way the company has gone about things in terms of overall risk management and ensuring more accurate risk based pricing in recent years.

Well, the alpine fault line is overdue in breaking, so that sort of thing, yes.

Quote from: Basil on Jun 18, 2025, 04:09 PMFrom memory their reinsurance limit is now up to $875m so unless you're talking about another Christchurch earthquake type event...  I like the way the company has gone about things in terms of overall risk management and ensuring more accurate risk based pricing in recent years.

Lets face it, nobody knew about the Christchurch (or Rolleston / Darfield) fault, before it knocked at our doors (quite vehemently, may I say). Why would anybody think that this was the last fault, we didn't know about?

And yes, LL - good point re the Alpine fault.

Throw in an increasing supply of atmospheric rivers ... and insurance certainly will be an interesting industry in the years to come, but sure - if one wants to invest into it, why not picking a compnay which looks cheap based on PE.

Obviously - Towers history doesn't really look brilliant (check the last 10 years or so), but as we all know - any company with a lousy past must be a success story in the years to come!

Tower is ticking up nicely. The sell depth is very thin.

Been a nice week for TWR holders

8c interim dividend in the bank

SP up 5% over the last 5 days and a big ex-div crossing of 1.1 mill shares today at $1.59

Prospects of a future cap return to s/holders improving by the day.

 

Pretty bad flooding in Nelson/Tasman with Auckland about to take a hit. As will Towers large event fund I expect.

Quote from: LoungeLizard on Jun 27, 2025, 09:44 AMPretty bad flooding in Nelson/Tasman with Auckland about to take a hit. As will Towers large event fund I expect.

No worries here ..... Tower don't cover things in flood prone areas

Quote from: winner (n) on Jun 27, 2025, 11:06 AMNo worries here ..... Tower don't cover things in flood prone areas

Really? Are you sure about that? There's huge swathes of NZ that are either currently, or will be, designated flood prone. I'd be surprised if they don't cover many of the parts that are currently getting flooded.

Quote from: LoungeLizard on Jun 27, 2025, 12:21 PMI'd be surprised if they don't cover many of the parts that are currently getting flooded.

TWR have been leaders in adjusting premiums to reflect climate change risks for several years now. Gone are the days of broad brush averages. The location of all properties insured is now checked thoroughly to assess a wide variety of risks and premiums are individually adjusted (not averaged as in the past.)

Waterfront and flood risk properties have faced large premium hikes (even non-renewal in some cases) while  assessed safer properties actually had premium reductions. For vehicle insurances, Boy racers with WRX's pay up to 10 x's my annual car insurance premium etc etc.

In the past. the Canterbury earthquakes  hurt TWR more than other insurers as they held considerable market share in Canterbury. Ever since, TWR have been more careful to spread risks  widely throughout NZ.

Today's weather event floods, as sad as they are for those effected, are 'Business as Usual' for today's TWR.

TWR shareholders can further mitigate risk by limiting their exposure to (say) 5% to 10% of their portfolio.

Great post.  Yes also, their risk based pricing is rewarding those that don't make claims too.  We've never claimed on our homes over the decades, less than $1,700 annual premium for home insured value of $1.1m now with Tower, or me personally on my vehicle, less than $900 annual premium on a $65K vehicle.  My wife has made a few claims on her vehicle over the years though so pays a somewhat higher premium on a lower value vehicle.

Yes, I wouldn't put my house on a single investment, especially an Insurance company  ::)

As we enter the rainy season,  it will be interesting to see whether events like the last few days really are "business as normal" for Tower.

Some seemingly upward pressure on the SP.  I purchase a second tranche in early June at 1.54. Got the dividend and now it is back over 1.60.

Quote from: Dolcile on Jul 02, 2025, 01:26 PMSome seemingly upward pressure on the SP.  I purchase a second tranche in early June at 1.54. Got the dividend and now it is back over 1.60.

Decent volumes over Wed/Thu/Fri last week and I didn't see it on the charts, so it may have been done off market. Was going to say yesterday that there was a big resistance level at 1.605 and it broke through it today.

Expecting a bit of rain tomorrow  :-X

No news is good news ..... recent storm no affecting them by looks of it

Salt Funds sell 4 mill shares taking some gains off the table.

https://api.nzx.com/public/announcement/454868/attachment/447279/454868-447279.pdf

Tower have been doing a lot of work with measuring risk.  I got my annual house insurance renewal from them this week.  My premium is down 10% and I noted in the documentation they are assessing my house as low risk for earthquake and very low risk of flood.  I think they will either put an extreme flood risk premium on some area's of N.Z. making insurance super expensive or withdraw coverage altogether.

Sold out yesterday after holding for nearly a year. Been a nice earner for me but think the large claims will take a big hit with even more wet weather forecast, probably not going to see too much of that returned at EOY in my opinion. Will keep an eye and might buy back in at some stage. GLTAH

Tbh I don't get selling - but each to their own.   For mine, Tower is in the business of insuring risk.  We've had a some bad weather that they may have some exposure too.  That's what the premiums are for!   

There's not much to understand, it rained lots which caused lots of flooding and presumably lots of insurance claims. Very likely to have eaten a chunk out of Tower's large claims, which means less money returned to SH at the end of the year... easy to understand why people would sell when their returns are 'trickling' away. And weather is supposed to continue in this vein for the foreseeable so more money not returned to SH.

I feel sorry for those affected and don't in any way want to appear to make light of the impact on them but from what I have seen on the news it seems to have mostly affected people in farming and low density fairly remote rural area's as compared to say the cyclones and weather event deluges of the summer of 2023 that smashed the Auckland region twice where 1.7 million people live and decimated the east coast twice.

I think the likes of FMG insurance who do a lot of farm insurance will get hit pretty hard but I estimate the impact on Tower will be fairly moderate. Some impact on the $50m extreme weather reserve but my best guess is a significant majority of that reserve remains intact.   Time will tell.

Quote from: Basil on Jul 12, 2025, 09:31 PMI feel sorry for those affected and don't in any way want to appear to make light of the impact on them but from what I have seen on the news it seems to have mostly affected people in farming and low density fairly remote rural area's as compared to say the cyclones and weather event deluges of the summer of 2023 that smashed the Auckland region twice where 1.7 million people live and decimated the east coast twice.

I think the likes of FMG insurance who do a lot of farm insurance will get hit pretty hard but I estimate the impact on Tower will be fairly moderate. Some impact on the $50m extreme weather reserve but my best guess is a significant majority of that reserve remains intact.   Time will tell.

Similar flooding in Nelson/Marlborough in August 2022 generated around $22 million in claims. There were 1248 reported claims (according to the Insurance Council.) Tower received around 150 claims nationwide for the floods, with approximately one-third (50) from the Nelson/Marlborough region.  By back of the envelope calculation, Tower's share of claim numbers in the region: 50 of 1248 = ~4.0%. Therefore, a proportional value estimate: 4% × $22 million ≈ $880,000. Which does seem quite low (perhaps I have missed something?) It suggests that the latest "event", while certain to be higher, will likely be in the low $millions. 

We shall see, that's the game after all!

I know of a number of places in Auckland that were affected over the weekend, as well as Northland. Would be extremely surprised if there were less than $1M of claims, I was thinking well north of that.

We shall see.

Useful post from Bull on the other channel....

https://www.interest.co.nz/insurance/134198/five-year-average-cost-natural-disasters-nz-952-million-pace-growth-insurance

The report says Tower continues to target "peril-specific" customers through "granular risk-based pricing" with 92% of its book now with "low" or "very low" flood-risk bands.

Seems like the big seller has disappeared - sell depth really thin.

Positive paywalled article in Business Desk this morning too.

Forbar keen that's for sure.  $2 price target and now this https://api.nzx.com/public/announcement/455183/attachment/447634/455183-447634.pdf
New ATH @ $1.65 today.  Expecting normalized gross yield in normal weather, (without any boost from non utilization of $50m extreme weather event provision), of 11.8% in 2026.    That's impressive !
This year, at least another 8 cps in December, probably more with supplementary divvy from unused part of $50m provision, but even at 16 cps fully imputed for the calendar year 2025 = 22.22 cps gross = 13.5% gross on $1.65, probably even higher.  Full imputed dividends is a game changer I reckon.
Disc: Happy holder.

https://www.interest.co.nz/insurance/134349/tower%E2%80%99s-risk-based-pricing-general-insurer%E2%80%99s-%E2%80%98most-defensible-competitive-edge%E2%80%99

Quote from: Basil on Jul 24, 2025, 06:50 PMhttps://www.interest.co.nz/insurance/134349/tower%E2%80%99s-risk-based-pricing-general-insurer%E2%80%99s-%E2%80%98most-defensible-competitive-edge%E2%80%99
[/quote

Thanks for the article, interesting.

Quote from: Stockgathering on Jul 24, 2025, 07:31 PMThanks for the article, interesting.

It does seem that Tower are really drilling down into clearly stratifying the layers of risk by geographical location.. Noticed a slight reduction in our home insurance policy that renews next month and they've identified our house as very low risk of flooding and low risk of earthquake.  Maybe their new risk management processes does give them a competitive advantage going forward ?  It would seem the market thinks so with another fresh all time high today despite the wet weather.

Yes my insurance premiums are slightly down as well, this happened last month and I assumed that this was a reflection on the fact that my house was in a low risk area. Interesting but not surprising in these volatile times

Quote from: Basil on Jul 29, 2025, 09:22 PMIt does seem that Tower are really drilling down into clearly stratifying the layers of risk by geographical location.. .. their new risk management processes does give them a competitive advantage going forward ?  It would seem the market thinks so with another fresh all time high today despite the wet weather.

TWR SP up a further 8% this month..... up 63% in the last 12 months....plus big divvies coming up...... been a great addition to my portfolio.

Meanwhile HGH still in limbo.

Quote from: Left Field on Jul 30, 2025, 08:03 AMTWR SP up a further 8% this month..... up 63% in the last 12 months....plus big divvies coming up...... been a great addition to my portfolio.

Meanwhile HGH still in limbo.

Yep, same here LF. Got out of HGH, got into TWR and never looked back. Being cautious, I have divested 50% of my holding recently, so pretty much free money in play now. We should get guidance figures soon, I guess once TWR have calculated the impact of the recent - and ongoing - floods.

I'm also very pleased to have made the switch.  TWR up about 80% including dividends in the last year, HGH down 20%.  I sold some Tower yesterday.  Has risen so strongly it got well over 10% of my portfolio.  7.5% weighting feels about right to me for this one. 

Some positive comments from Salt, in their July Long Shot Fund fact sheet.  And also explains why they were selling - due to being overweight.

https://www.saltfunds.co.nz/_files/ugd/9b51d8_22ff40fcdbc84e77b661c0c9a61cb6a4.pdf

QuoteA close second in terms of positives came from our large, longheld position in Tower (TWR, +9.4%). There was no real news
aside from a broker price target uplift. We have had a highquality problem trying to keep our holding at around 8% as the
remorseless TWR share price advance keeps increasing our
position. Despite the strong performance, TWR is not yet
expensive. If we assume no further large events to endSeptember beyond the circa $7-10m that we estimate so far, our
forecasts have it on a PE of around 5.9x. Looking forward to
Sept26, and conservatively assuming the full $50m of
reinsurance deductibles, it is still only on a PE of 8.0x. Yes, the
insurance cycle has changed but soft global reinsurance markets
mean insurance margins are holding up even though the days of
sharp NZ premia inflation are behind us.

Quote from: Dolcile on Aug 08, 2025, 03:39 PMSome positive comments from Salt, in their July Long Shot Fund fact sheet.  And also explains why they were selling - due to being overweight.

https://www.saltfunds.co.nz/_files/ugd/9b51d8_22ff40fcdbc84e77b661c0c9a61cb6a4.pdf

"We have had a high quality problem trying to keep our holding at around 8% as the remorseless TWR share price advance keeps increasing our position."

Nice problem to have.

metrics on  TWR look pretty good 
PE 6ish
EPS growth 348%

In the last 12 months, Tower had revenue of NZD 607.25 million and earned 87.99 million in profits. Earnings per share was 0.26.

Quote from: HAWKDOG on Aug 10, 2025, 05:49 PMmetrics on  TWR look pretty good 
PE 6ish
EPS growth 348%

In the last 12 months, Tower had revenue of NZD 607.25 million and earned 87.99 million in profits. Earnings per share was 0.26.

Maybe a better option than PHL?

For sure.

The only thing that worries me is the chart - will it continue to the moon or is going to roll over?

Might dip my toe in but would like to see a bit of a pull back.

It's probably worth pulling up 10 years of financials to get a sense of history around cashflows and large "events", and projecting how that looks going forward before taking a position.

Sage advice.  Event years stand out.

Cash flow:
2018 - -6.77
2019 - 16.57
2020 - 10.76
2021 - 18.68
2022 - 18.8
2023 - -1.02
2024 - 74.29
2025 - 87.99

huge increase in earnings last 2 years - due to increases in $$ for policies?

interesting that their highest revenue growth was in 2023 - 38% 

38% of the float owned by institutions, 0.49% by insiders.......

Quote from: HAWKDOG on Aug 11, 2025, 11:00 AMhuge increase in earnings last 2 years - due to increases in $$ for policies?

I think that's only part of the picture.  The former CFO, now CEO has done excellent work in recent years reducing their exposure to high risk assets and ensuring moderate risk assets are priced appropriately.

https://www.rnz.co.nz/news/business/569861/iag-s-insurance-profit-rises-as-claims-costs-fall

Tower does more risk-based pricing - will charge more to insure properties vulnerable to slips and sea surges
https://www.nzherald.co.nz/business/personal-finance/tower-to-charge-more-for-insurance-on-properties-at-higher-risk-from-slips-and-sea-surges/7UU456CVQFC3ZNH3DKUNEMXUP4/
Pretty cool how they are drilling down into their risk based modelling on a granular property level.  Also cool is my home insurance premium going down this year as are most others.

Had a bit of a play on the Tower website this morning based on properties in Northland we have been considering buying for a holiday home that will probably morph into our retirement home in due course.  Interesting that anything that seems in any way vulnerable to rising sea level's or sea surges, (such as large parts of One Tree Point, Ruakaka and Waipu that are low lying area's or near the waterfront canal's) they are not marking as high risk, they simply refuse to cover !  That knocks out most of my Trade Me watchlist lol

Moral of the story, if you are thinking of buying a property near the sea, low lying in terms of altitude or frankly anywhere, check on Tower's website to see how they assess the risk.  I wonder if anyone is covering canal front homes or near the canal front homes in the waterways area's of One Tree Point, Pauanui, Whitianga and the like anymore ?

As a shareholder I was deeply impressed at how they deal to high risk properties.  As a prospective home owner in Northland, it was a very sobering process.

I had a play with Tower's website as there are a number of areas in Christchurch that are either flood prone or seaside.
Pleasing knowing our property is OK.

Do you have to go through the Getba Quote process to find out if one can be covered?

No, you just have to start the quote by typing in the address....then the AI bot tells you this


We're sorry

The details you've given mean that we're currently unable to offer you cover.


I'm in the housing market to buy having recently sold and its amazing how many properties Tower won't insure...mind boggling

They might run out of customers..lol

We just bought a holiday home in Ohiwa, never checked Tower! maybe I should have!  Just went with the existing insurer FMG with no issue.

Sounds like their AI is programmed with climate change/sea rise/rain events - wonder what it includes for landslide/earthquake risk - which is pretty much the whole island!

As a Tower shareholder, good to know my capital is safe :)

Quote from: Turkey on Aug 25, 2025, 01:47 PMNo, you just have to start the quote by typing in the address....then the AI bot tells you this
We're sorry
The details you've given mean that we're currently unable to offer you cover.


I'm in the housing market to buy having recently sold and its amazing how many properties Tower won't insure...mind boggling...

They might run out of customers..lol

Fast and free way to identify risks with a potential property acquisition in my opinion.  If they won't cover it that should put any prudent buyer on notice to dig deeper and make further enquiries about the risks.  There's no shortage of properties for sale.  My inclination unless a property is a very, very special opportunity, is anything they won't cover gets eliminated from further consideration.

Sort of Basil

...most other insurance companies still offer insurance on the properties that tower don't.
Tower is just very very risk averse.

I assume all the insurance companies have access to all council and govt risk data like flood viewer , Eqc etc so it's just a matter of them pricing in the risk or choosing like Twr not to insure at all on some properties.

I don't think just because tower won't insure a property means you shouldn't buy it.

Just do your homework and know what risks your buying...and think long and hard about where insurance risk might be 10 or 20 years on from today...when maybe you want to sell. Will you be able to sell? Will your sale price be marked back due to risk?

If a buyer needs a mortgage to buy your property they're probably going to need insurance before bank grant mortgage. Also understand you might be paying a higher $ risk premium to insure with another company versus a property not in a risk area. Really no difference to other insurance like cars where higher risk locations like Auckland cost more than say the same car in Dunedin or smaller town etc.

For example Tower won't insure half of Orewa which is built on sand so drains well but its sea level...but other insurers will.

I think the days of choosing to live in a low lying valley, by a river, under a big hill or mountain range that feeds water and slips onto the flat land below are numbered.

Will be interesting to see if banks start playing more role in house insurance going forward especially since they need to grease the mortgage ponzi to make the super profits.

Might be banks steps in to offer mortgage on slightly risky property if you take  house insurance with them as well...then they get you by both balls...mortgage interest and insurance premiums...lol.

Who knows? Interesting space

Quote from: Turkey on Aug 25, 2025, 05:36 PMInteresting space

It sure is.  Many will remember the damage caused by the recent tsunami that hammered Tutukaka marina pretty badly.  https://www.nzherald.co.nz/northern-advocate/news/work-started-on-repairing-tsunami-surge-damaged-tutukaka-marina/AHBXEU3IN5E55AYOMXA4HCBHV4/
Looking at many properties in One Tree Point area south of Whangarei in Northland around the marina and waterways there is something I have been doing, also Ruakaka and Waipu Cove.  Nice area but many properties are very close to sea level, some only ~ 2 to a few meters above it.  One really decent tsunami could do immense damage there and also in Orewa and other low lying coastal area's  That fact is probably what's behind Tower's risk averse approach and has given me plenty of food for thought.  Sure you might be able to get insurance elsewhere but if its priced somewhere in the region of a "Rolls Royce" level, alarm bells should be ringing very loudly.  The other thing is peace of mind is a very valuable commodity.  Do you really want to buy a property that's vulnerable to a tsunami and always carry around that small risk in the back of your mind ?  That's a question I am really wrestling with but I think I know the answer and if Tower won't cover it, then I shouldn't take that risk with someone else either just because they will, at a much higher cost.  I guess we all need to have a really good think about what level of risk we can tolerate for the lifestyle some properties give you.  I think as you get older, most people are more risk averse.  Here's a good example. It wouldn't take much of a sea surge to wipe this house out.  https://www.trademe.co.nz/a/property/residential/sale/northland/whangarei/one-tree-point/listing/5448058760  Guess if Tower will cover it lol  G.V. is $3.17m, who's feeling wealthy and brave ?

The implications of global warming, sea level rising and  storm extremes don't only effect your choice of a new home Basil.

In my coastal community our local yacht club was faced with an insurance renewal bill of $70k pa for their modest 1980's club room building as well as facing increasing maintenance and council compliance bills.

This non-profit, voluntary organisation has chosen to go uninsured and the community now lives in the knowledge that our precious community 'asset' could be lost at any time.

Wow. Do you mind sharing if the club tried to get a more competitive quote and what happened ? It would seem that was also a completly unpalatable quote.

This sort of thing must be going on all around N.Z  in low lying, vulnerable coastal area's.

I guess this is a good thing for Tower shareholders. At the end of the day it would seem that the days of low risk property premiums subsidizing higher risk ones is over although I suspect an element of cross subsidization still goes on.

The thing to bring to mind you might get a quote this year but future years?

Quote from: Basil on Aug 25, 2025, 07:53 PMWow. Do you mind sharing if the club tried to get a more competitive quote and what happened ? It would seem that was also a completely unpalatable quote.

Yes I suspect their insurance Coy wanted out..... I'm not privy to the details but suspect they got alternative quotes.

I've also heard there are surf clubs in similar circumstances.

On a brighter note, talking to a farmer mate who had his Hawkes Bay property munted in the last cyclone floods (two houses, 3 utility buildings a shearing shed all gone plus kms of fences etc) he couldn't speak more highly of his insurer, got paid out within two months, is now fully repaired (in higher locations) and fully reinsured...... his insurer was FMG - the farmers co-operative.

Best you buy a seaside farm Basil!? lol.

We are insured with FMG, they are becoming very risk adverse as well, won't take on anymore business in Wellington, now requires you to declare any local natural hazards the council records have on the property (flood zone, earthquake zones) wants to know your building site land slope.
Don't think I could sleep well at night without insurance but understand why more and more poeple won't pay for it because of how expensive it is and the government have bailed out the uninsured before. ( those with mortgages must carry insurance as it is in the mortgage document fine print)
Personally I think your insurance should reflect the individual risk of your own property, in saying that I also believe ACC levies should also reflect individual lifestyles (why should I subsidies someone who has risky lifestyle hobbies (rugby, mountain biking, quad riding, horse riding etc)

I agree insurance should reflect the individual risk of your own property however with extreme weather events its hard to predict - tornados in northland, pine forests blown over in Turangi/Nelson/Blenheim, landslides in Gisborne/Napier, drought, fires, earthquakes.
If you are on the flat you might flood, if you are on a hill your house may slide to the bottom - hard to win especially with how outdated the infrastructure is in this country.  I am in Gisborne - went through the Gabrielle ordeal - the weather has sucked for 4 years now - to the point where we have bought a holiday home over the hill to escape to better weather. 

Its likely to get worse, best to just to enjoy every day to the fullest otherwise you can put yourself in a doomer cycle and never leave the house.

Quote from: Basil on Aug 25, 2025, 05:54 PMIt sure is.  Many will remember the damage caused by the recent tsunami that hammered Tutukaka marina pretty badly.  https://www.nzherald.co.nz/northern-advocate/news/work-started-on-repairing-tsunami-surge-damaged-tutukaka-marina/AHBXEU3IN5E55AYOMXA4HCBHV4/
Looking at many properties in One Tree Point area south of Whangarei in Northland around the marina and waterways there is something I have been doing, also Ruakaka and Waipu Cove.  Nice area but many properties are very close to sea level, some only ~ 2 to a few meters above it.  One really decent tsunami could do immense damage there and also in Orewa and other low lying coastal area's  That fact is probably what's behind Tower's risk averse approach and has given me plenty of food for thought.  Sure you might be able to get insurance elsewhere but if its priced somewhere in the region of a "Rolls Royce" level, alarm bells should be ringing very loudly.  The other thing is peace of mind is a very valuable commodity.  Do you really want to buy a property that's vulnerable to a tsunami and always carry around that small risk in the back of your mind ?  That's a question I am really wrestling with but I think I know the answer and if Tower won't cover it, then I shouldn't take that risk with someone else either just because they will, at a much higher cost.  I guess we all need to have a really good think about what level of risk we can tolerate for the lifestyle some properties give you.  I think as you get older, most people are more risk averse.  Here's a good example. It wouldn't take much of a sea surge to wipe this house out.  https://www.trademe.co.nz/a/property/residential/sale/northland/whangarei/one-tree-point/listing/5448058760  Guess if Tower will cover it lol  G.V. is $3.17m, who's feeling wealthy and brave ?

Its interesting that people put so much emphasis on the risk of a Tsunami when driving on NZ roads is astronomically more hazardous.

No one has died in a Tsunami in NZ in 50 years
On average 300-400 die on NZ roads annually.  15 over just xmas holidays last year

Less than a month to go until the end of the financial year.  I still think a significant majority of the $50m extreme event provision remains intact and they are likely to pay this out as a special fully imputed dividend in December along with the normal dividend.

My guess, a total of about 16 cps fully imputed in December made up of ~ 8 cps special and 8 cps ordinary dividend.
Say 75% of $50m reserve remaining, = $37.5m less tax at 28% = 27.0m / 341.54m shares = 7.9 cps.

What do you guys reckon ?

Pretty quiet in here, have some of you sold out and "insured" (you see what I did there ;) ) your profit is realized not unrealized.

Quote from: Basil on Sep 02, 2025, 04:12 PMPretty quiet in here, have some of you sold out and "insured" (you see what I did there ;) ) your profit is realized not unrealized.

Still see TWR as a long term hold and happily 'overweight.'

Also happy to leave dividend predictions to others.

Quote from: Basil on Sep 02, 2025, 11:15 AMLess than a month to go until the end of the financial year.  I still think a significant majority of the $50m extreme event provision remains intact and they are likely to pay this out as a special fully imputed dividend in December along with the normal dividend.

My guess, a total of about 16 cps fully imputed in December made up of ~ 8 cps special and 8 cps ordinary dividend.
Say 75% of $50m reserve remaining, = $37.5m less tax at 28% = 27.0m / 341.54m shares = 7.9 cps.

What do you guys reckon ?

We had a bit of damage to our roof on Sunday with the wind in Auckland, but we're with AMI, lol. But not much was reported in the news so I don't think it would have been that bad, other than the delayed flights into Auckland.

There seems to be a lot of the short, sharp, extremely intense weather events (plus "atmospheric rivers") over the last 2-3 years. Don't recall anything like that before.

Quote from: Basil on Sep 02, 2025, 04:12 PMPretty quiet in here, have some of you sold out and "insured" (you see what I did there ;) ) your profit is realized not unrealized.

We have another 3 months to go (late Nov) until FY25 results are announced, so the share price might languish here for a while unless we get another guidance update prior to that.

Maybe a few folks have cashed out for now and will come back closer to the FY25 announcement dates or even the ex-div date. Decisions decisions...

I think holding until results day is a safe bet, not much to see here until then so long as the weather plays ball.

Also still holding tight.  Just a game of patience. 

For me I want someone with the technical analysis bent to appear and present a compelling picture before I decide to buy more TWR (modest % held) at today's price, or try to wait and snap it up later, for me the same questions as arise on buying FSF and particularly ATM today, all 3 could conceivably rise higher but perhaps I'm best to sit on what I have at the moment.

Strong volume today of more than 2.1m shares.

Weekly Tower chart:

Price above ATL (0.54), AVWAP ATL (0.925), AVWAP ATH (1.465) -- means price is no longer being driven by perceived value, but rather results, still a long way to drive up to ATH (4.51), would have to break rising channel in a big way.
Velocity and double trix are insipid, seemingly waiting for update or results.

TWR_2025-09-11_18-28-03.png

https://api.nzx.com/public/announcement/458623/attachment/451936/458623-451936.pdf

I like the strategic direction of travel Tower are headed in.
Based on my checks, there's large high risk parts of the country that Tower will no longer cover with house insurance.
Passing on lower premiums to customers for lower risk properties is much appreciated by customers, (I am also a customer), especially in this day and age when almost every aspect of cost of living is going up.  This will lead to market share gains in my view going forward and we are seeing evidence of that.
They're making very good progress towards building a more resilient business model is how I see it.

Just putting some numbers around this years forecast result, at the mid point of forecast, $105m) on 342.5m shares that's EPS of 30.7 cps and puts Tower on a current year PE of 5.75.

It should be noted that analysts are not forecasting the underlying profit to be this high in FY26, (recall the benign summer weather last year) and are also not forecasting another large events provision recovery.  Average analyst forecast for FY26 and FY27 is 18 and 20 cents respectively.  Average target price is $1.865 and rating is buy.  https://www.marketscreener.com/quote/stock/TOWER-LIMITED-12924419/finances/

My comment.  Its always important to look forward.  I think with the increasing refinement and granular risk based approach the business is very well placed to weather future large events and on the balance of probabilities there will be some recovery from extreme event provisions in future years.  On an stand-alone basis assuming half of next year's extreme event provision sheets home to earnings and assuming its $50m before tax, I expect  ~ $80-$90m after tax next year and at the mid point that's 25 cps and that puts Tower on an estimated FY26 PE of 6.9 at yesterday's closing price of $1.725.  The share price looks like very good value to me.
(Noting also that Tower's two main competitors here IAG, FY26 consensus PE 19.3 and Suncorp 18 are on well over double the forward metrics of Tower)
Also noting Tower shares trade cum a large expected dividend so the metrics for FY26 look even more compelling if you net off the final dividend for FY25 from your calculations.

Good summary Basil.

SP has been firming up around $1.70 over the last 5 days. Today's news should see the SP climb towards the $1.80's

Understated PE offers further upside potential, and then, of course is the nice dividend as icing on the cake .

Thanks LF.  If they pay out the full extreme event provision recovery of $31m after tax on 342.5m shares that's a special divvy of 9 cps fully imputed plus the normal final divvy I have estimated at 5 cps based on just over 60% payout of profit from second half = 14 cps fully imputed in January.

Bit lower than my guess a while ago but nonetheless if it comes to pass, that's a very juicy dividend.
Looking ahead to FY26 if they make 25 cps and payout6 65% of that, that's 16.25 cps fully imputed / 0.72 22.57 cps gross and a gross yield of 12.9% on $1.75 share price. 22.57 / 1.61 = 14% gross yield if you back out the final divvy for FY25 from your investment calculations.

Quote from: Otago K on Sep 03, 2025, 08:56 AMFor me I want someone with the technical analysis bent to appear and present a compelling picture before I decide to buy more TWR (modest % held) at today's price, or try to wait and snap it up later, for me the same questions as arise on buying FSF and particularly ATM today, all 3 could conceivably rise higher but perhaps I'm best to sit on what I have at the moment.

I hear you, timing entries on stocks like TWR, FSF, and ATM is tricky, and unless you've got the charts and macro view lined up, it can feel like a gamble. From a TA standpoint, you'd want to see confirmation of momentum before scaling in, otherwise sitting tight on your current position isn't the worst move.

One thing I've been doing lately is using covesting instead of stressing over whether to buy now or later. It lets you track and copy traders who are already strong in technical analysis, so you don't have to guess as much on entry points. Someone I've found really insightful around long-term investing and strategy is Mary Elizabeth McOwen. She explains can follow her strategies via covesting, and if you Google her, you'll find her background right away.

Not saying you have to change your whole approach, but covesting could be a good complement, especially if you'd rather not get stuck in positions like this.

Quote from: jamesgreen on Sep 13, 2025, 02:25 AMMary Elizabeth McOwen. She explains can follow her strategies via covesting.......Not saying you have to change your whole approach, but covesting could be a good complement

'scuse my ignorance....could you please explain what you mean by 'covesting'?? Thanks.

Quote from: Left Field on Sep 13, 2025, 07:55 AM'scuse my ignorance....could you please explain what you mean by 'covesting'?? Thanks.

Via chat GP I would say it is having a view of thoughts and analysis behind what companies in their portfolio they are investing into and doing a degree of mirroring based on seeing validity to the rationale behind their perspective.

Excuse my ignorance, but the share is more or less at a 10-year high.

Outside of the strict numbers, what has actually changed in terms of the business dynamics that have pushed it to a 10-year high? From what I can gather, the insurance industry has got even harder to navigate with the number of events we have these days.

A number of things...

Foremost is probably that premiums have risen much faster than general inflation. This is coupled with some degree of cost reduction meaning that MER is at good levels (29% from memory). Importantly, the whole industry has participated in the raising of premiums so all are maintaining market share while increasing revenue.

Second is that TWR has adopted risk based premiums, IOW shedding high risk policies in NZ and the pacific islands

Third- a relatively benign weather/eq environment in the last ten years (notwithstanding the Kaikoura Earthquake and 2023 Weather events)

So underlying or BAU performance has improved markedly.
Large events have been relatively benign

Result - improving shareprice, which is still about half (PE) of industry peers, so maybe some distance to run yet...

Quote from: Poet on Sep 23, 2025, 03:33 PMA number of things...

Foremost is probably that premiums have risen much faster than general inflation. This is coupled with some degree of cost reduction meaning that MER is at good levels (29% from memory). Importantly, the whole industry has participated in the raising of premiums so all are maintaining market share while increasing revenue.

Second is that TWR has adopted risk based premiums, IOW shedding high risk policies in NZ and the pacific islands

Third- a relatively benign weather/eq environment in the last ten years (notwithstanding the Kaikoura Earthquake and 2023 Weather events)

So underlying or BAU performance has improved markedly.
Large events have been relatively benign

Result - improving shareprice, which is still about half (PE) of industry peers, so maybe some distance to run yet...

Thanks, it's been more of an industry-wide thing than anything specific that Tower has done, except the risk-based premiums?

And yes, I've definitely noticed all my different insurance premiums going through the roof!!

Just noting the reduced significant shareholder disclosure for Salt Funds Management from 10 July over 5% to under now. ave BUYs around $1.65, and SELLs around $1.72.
https://www.nzx.com/announcements/459271

Might offer some hope to add to my holdings if SP pulls back somewhat to my next BUY order levels.

https://api.nzx.com/public/announcement/459334/attachment/452785/459334-452785.pdf

Partnership with Westpac sounds positive

https://api.nzx.com/public/announcement/459524/attachment/453028/459524-453028.pdf

Yes, more good news for TWR.

Combined with the $15 million reduction in annual re-insurance costs and the pending OCR cuts, this should all be positive for TWR shareprice

I am really tempted to buy more.  TWR sitting at 2% portfolio allocation so room for a bit more. 

Quote from: Dolcile on Sep 26, 2025, 08:41 AMPartnership with Westpac sounds positive

https://api.nzx.com/public/announcement/459524/attachment/453028/459524-453028.pdf

I'm going to be a bit of a devils advocate, as I do wonder if it will compromise the boundaries of whether Tower might decline cover in some instances on risk assessments for the property, maybe they will make it so unattractive in such cases and suggest the Westpac customer check other insurance providers. still think I see it as a positive to Tower as an invest-able stock at present but.?? Could be useful as a S&P agmt due diligence clause to get suitable Insurance cover for Westpac borrowers looking to buy a property??

Quote from: Dolcile on Sep 27, 2025, 08:53 AMI am really tempted to buy more.  TWR sitting at 2% portfolio allocation so room for a bit more. 

It's all about DYOR and making your own decisions..... I suggest your decision should include consideration of your current av holding SP vs the current market SP and the resultant 'safety' margin you'll have if you buy more.

FWIW TWR is currently a tab over 15% of my portfolio with my av holding SP just under $1.00. This provides my arguably 'overweight' position with a useful 'safety' buffer cf the current SP and helps me sleep easy!

8% portfolio allocation.  Westpac deal has the potential to steal a lot of market share off IAG and is probably a bigger deal than the market has so far recognised.  Looking forward to January's bonanza dividend.  That'll be a real problem solver for the Christmas holiday credit card bill lol

Both Craig's and FB positive as are a lot of you here. I agree and have brought back in.

The selling is unrelenting despite the increased interest lately... Each time we hit $1.75/76 another massive sell comes out of nowhere and pushes the prices down.

Salt has been selling to maintain balance, unsure about ACC. FB has been buying.

Quote from: Shareguy on Oct 03, 2025, 03:53 PMBoth Craig's and FB positive as are a lot of you here. I agree and have brought back in.

Welcome back.  Huge dividend due in January.  Perfect timing to enjoy on your summer holidays.
I think Salt's selling has been unrelenting and provides an opportunity which you've taken advantage of.  Most other high dividend payers have already rallied a lot in the last few weeks, whereas this one hasn't.  A very smart move getting back in now in my opinion.

Quote from: Basil on Oct 03, 2025, 05:00 PMWelcome back.  Huge dividend due in January.  Perfect timing to enjoy on your summer holidays.
I think Salt's selling has been unrelenting and provides an opportunity which you've taken advantage of.  Most other high dividend payers have already rallied a lot in the last few weeks, whereas this one hasn't.  A very smart move getting back in now in my opinion.

Thanks Basil, no issue buying as plenty for sale, unlike some of the other names I'm trying to get.

Added more today. Surprised this has not run up much yet now that the yield wars have begun... If you take off the 12-15 cent fully imputed dividend due at FY this looks pretty cheap in the current market.

I also added a few more this morning.   The yield looks very attractive in a 2.5% OCR environment.

Yeah, its been completely overlooked as a dividend yield play as was GNE until a few days ago.  Mr Market will wake up sooner or later.  Fantastic buying in the mid 170's in my opinion.  (I am already well positioned)
.
.
.
P.S. Bugger it, its so compelling I squeezed a few more into my portfolio.

Pretty sure the infinite selling at $1.75 is Salt. Should move once they are out.

Some big volume going through early doors.

1 million shares off market @ $1.75

Quote from: Dolcile on Oct 09, 2025, 11:35 AMSome big volume going through early doors.

1 million shares off market @ $1.75

I couldn't resist another small top up lol (kidding).  It will be good to see the back of Salt's relentless selling.  Tower probably has one of the highest yields on the NZX and yet hasn't reacted meaningfully to the lower interest rate environment.  Additionally the market has given it no credit for the recent Westpac customers deal which should be meaningfully EPS accretive in the years ahead.  I think is a real opportunity for those that aren't already well positioned.

https://www.marketscreener.com/quote/stock/TOWER-LIMITED-12924419/finances/  Average target price $1.90

Average analyst forecast is for DPS in a so called normal year next year of 13 cps fully imputed = 18.06 cps gross.   At $1.75, that's 10.3% gross plus whatever special dividend, if any, from underutilized extreme event provision).  If you back out an assumed 14 cps combined final and special divvy for FY25 income your net price of $1.61 for FY26 and future income gives (18.06 / 161) = 11.2% gross yield plus possible specials in the years ahead.  Yeah its not without extreme event risk but don't forget the other side of the coin, the big bonus annual dividend if not much goes wrong like this year.

Opportunity knocks ? You be the judge.

Completely agree, Basil.

I wonder how much Salt are looking to sell?  They hold TWR across a number of funds.

This might be a stupid question, given that a couple of posts ago I said that I think SALT is the big seller at $1.75. But why would they cap the price like that? Why wouldn't they just let it run and sell higher?

Quote from: entrep on Oct 09, 2025, 01:38 PMThis might be a stupid question, given that a couple of posts ago I said that I think SALT is the big seller at $1.75. But why would they cap the price like that? Why wouldn't they just let it run and sell higher?

Good question.  Generally when I think the price is being held down I go immediately to cap raise thoughts but I don't think TWR needs to raise any funds unless they are looking buying another company.

The relentless selling in the mid 170's can't last indefinitly. I know more but that's all I'm prepared to go on the record with. Like I said recently, I've just added more.

$1.79 in early trades and reasonable volumes

I added more this morning.

Now there's a portent if ever there was one or is it two

This from BusinessDesk this morning:

Tower Insurance CEO Paul Johnston says the insurer is starting to see the benefits of a decade of hard work.  Its shares are outperforming its rivals, it's snaffling market share with sharp pricing, has recently lifted its profit guidance, and yet is saying goodbye to some customers.Macquarie analysts believe NZX-listed insurer Tower's shift to risk-based pricing is a key competitive advantage as it increases its share of the home insurance market.They say Tower is one of the few insurers in Australia and NZ that is growing organically.

Not sure if Tower is in place yet as underwriter for Westpac cars, but got my renewal letters today and Westpac premiums are now 20% higher than a spot check of others like Trademe Insurance etc. Just normal cars.

Quote from: entrep on Oct 14, 2025, 02:49 PMNot sure if Tower is in place yet as underwriter for Westpac cars, but got my renewal letters today and Westpac premiums are now 20% higher than a spot check of others like Trademe Insurance etc. Just normal cars.

TWR assumes the underwriter status in June 2026.

The selling seems to have stopped. Daily volume has been in the 200k mark consistently since Oct 13 (vs Sep 11-Oct 9 where it was easily 400k+ and more volatile) and it's pushed up the share price to 1.80+. Closed at $1.84 today.

Next OCR review due Nov 26, followed by TWR's results on the 27th. If we can get more details on the Westpac deal and updates on growth projections that would surely help to bump the price above $2?

I went through the process of getting a few quotes off Tower's website on various properties I was considering buying up north as a retirement home and I was very impressed with how sophisticated their software system is.  Its taps right down into the risk profile at a very granular level.  I think they have invested in and gained a massive competitive advantage over the IAG insurance group with their new system.

The metrics still look compelling to me based on a normal events year with full utilization of their extreme event provisioning but I suspect on balance over the years ahead due to their accurate risk profiling there might be pretty consistent special dividends for most future years from under utilization of that previsioning.  With full imputation credits now available, that's another game changer this year for dividend hounds like me.

Quote from: Basil on Oct 28, 2025, 07:08 PMI went through the process of getting a few quotes off Tower's website on various properties I was considering buying up north as a retirement home and I was very impressed with how sophisticated their software system is.  Its taps right down into the risk profile at a very granular level.  I think they have invested in and gained a massive competitive advantage over the IAG insurance group with their new system.

The metrics still look compelling to me based on a normal events year with full utilization of their extreme event provisioning but I suspect on balance over the years ahead due to their accurate risk profiling there might be pretty consistent special dividends for most future years from under utilization of that previsioning.  With full imputation credits now available, that's another game changer this year for dividend hounds like me.

Agree even at the current price metrics are compelling. FB and the super fund increasing their position.

Quote from: alkebab on Oct 28, 2025, 06:50 PMThe selling seems to have stopped. Daily volume has been in the 200k mark consistently since Oct 13 (vs Sep 11-Oct 9 where it was easily 400k+ and more volatile) and it's pushed up the share price to 1.80+. Closed at $1.84 today.

Next OCR review due Nov 26, followed by TWR's results on the 27th. If we can get more details on the Westpac deal and updates on growth projections that would surely help to bump the price above $2?

Strong close at $1.88 today.

So if we assume TWR report the mid point of the uNPAT guidance of $105m... how much do you think they'll pay out in dividends?

I'm hoping for a final divvy of approx 5 cps and a special divvy of 9 cps both fully imputed.

A good summary of insurance claims following the October Otago/Southland extreme weather events.....

https://www.rnz.co.nz/news/business/579501/thousands-of-insurance-claims-lodged-as-result-of-wild-october-weather

Seems IAG & FMG going to be hit hardest sharing almost equally over 7000 claims, with TWR around 850 claims.

Phew.

https://www.nzx.com/announcements/463466

16.5c dividends.

Basil, your estimate got smashed. LOL.

Quote from: alkebab on Nov 27, 2025, 08:35 AMhttps://www.nzx.com/announcements/463466

16.5c dividends.

Basil, your estimate got smashed. LOL.

Yeah, I'm really upset about that ROFL
Tower reports record FY25 result, increased dividends

Kiwi insurer, Tower Limited (NZX/ASX: TWR) today announced a record underlying profit performance for the year ended 30 September 2025, delivering an underlying NPAT of $107.2m and a reported profit of $83.7m. The result was driven by low large events costs and a significantly reduced business-as-usual (BAU) claims ratio, alongside customer growth.

Reported profit reflects adjustments for increased Canterbury earthquake claims cost estimates, the ongoing cost of customer remediations and a provision for software impairment.

FY25 highlights:
• Underlying NPAT: $107.2m (up from $83.5m in FY24)
• Reported profit: $83.7m (up from $74.3m in FY24)
• Gross written premium (GWP): $600m, up 2%
• Customer numbers: 318,000 (up 4%)
• BAU claims ratio: 41% (improved from 48%)
• Combined operating ratio (COR): 74.1% (vs 79%)
• Management expense ratio (MER): steady at 31.4%

Reflecting the positive results, Tower's Board has declared a fully imputed final dividend of 16.5 cents per share. This brings total dividends for FY25 to 24.5 cents per share.
WOW !! 

Quote from: Left Field on Nov 21, 2025, 05:18 PMA good summary of insurance claims following the October Otago/Southland extreme weather events.....

https://www.rnz.co.nz/news/business/579501/thousands-of-insurance-claims-lodged-as-result-of-wild-october-weather

Seems IAG & FMG going to be hit hardest sharing almost equally over 7000 claims, with TWR around 850 claims.

Phew.

Those storms have an estimated cost of $4.5 million counting towards the FY26 large event allowance of what, $45 million. Ouch.

Let's see what they have planned going forward especially with details from the Westpac deal.

Edit: Are we due for another abnormally warm year again? I have to check, but is La Nina back again?

FY26 guidance is about 10% higher than last years guidance.
Quick back of the envelope calculations.
Mid point of official guidance for FY26 is $60m
Assume half the adverse event allowance is used, (almost goes without saying there are risks around assuming that) leaves another $22.5m (What am I basing this assumption on ?)  $4.5 cost incurred already and (from the presentation) South Island storm and  Large event claims costs of $7.2m well
below historical 10-year average of $15m) so $15m is the 10 year average utilization but they have incurred $4.5m already = $19.5m, so I'm fairly conservatively estimating they use $22.5m of that provision in FY26
Estimated profit $$82.5m on 345.2m shares = EPS of 23.9 cps.
So what is the case for investing in Tower for future income.?
Closing price yesterday $1.92
Invest before it goes ex divvy on 14 January 2026 and get 16.5 cps back gives net entry cost for FY26 and future years income of $1.755
$1.755 / 23.9 cps = PE of only 7.34 which seems far too cheap compared to its peers in Australia and considering the growth initiatives with the Westpac deal kicking in from July 2026 and the key advantage they have over their competitors which much superior risk analysis software.
https://api.nzx.com/public/announcement/463466/attachment/457750/463466-457750.pdf

What's the case for income then ?
Its anyone's guess really but maybe they can pay about 20 cps fully imputed in FY26, down from 24.5 cps in FY25, (a year of very low claims on the large events contingency)
20 cps fully imputed = 27.8 cps gross.  On a net purchase price of $1.755, that's a gross yield of 15.8%.  Oh my goodness, surely not...
https://api.nzx.com/public/announcement/463466/attachment/457747/463466-457747.pdf

Comparative PE's from average analyst forecast for FY26 off Market Screener
IAG 16.8
Suncorp 15.7
Obviously there's no imputation credits with investing in Australian insurance companies.

I think its fair to say Tower shareholders are well positioned.

Great result. Slight beat on Craig's uNPAT forecast of $105m against actual $107m

DPS forecast of 17 cps against actual 24.5 cps

FY26 guidance improved.

$2 here we come.......

Sector average PE 14.2 which would equate to $2.50 a share

Just running numbers with next year's forecast, $55-65 million NPAT assuming all of the large event allowance was fully utilized.
$55 million gives us 9.6c-12.8c dividends at 60-80% payout
$60 million gives us 10.5c-14.0c
$65 million gives us 11.4c-15.2c

I'm going to go with a NPAT of 60 million and 12c dividends for starters.

Quote from: Basil on Nov 27, 2025, 08:49 AM.....What's the case for income then ?
Its anyone's guess really but maybe they can pay about 20 cps fully imputed in FY26, down from 24.5 cps in FY25, (a year of very low claims on the large events contingency)
20 cps fully imputed = 27.8 cps gross.  On a net purchase price of $1.755, that's a gross yield of 15.8%.  Oh my goodness, surely not...
https://api.nzx.com/public/announcement/463466/attachment/457747/463466-457747.pdf

Comparative PE's from average analyst forecast for FY26 off Market Screener
IAG 16.8
Suncorp 15.7
Obviously there's no imputation credits with investing in Australian insurance companies.

I think its fair to say Tower shareholders are well positioned.

Great result..... well done holders!

Nice to see Basil getting excited  ;)

Quote from: Shareguy on Nov 27, 2025, 09:01 AMGreat result. Slight beat on Craig's uNPAT forecast of $105m against actual $107m

DPS forecast of 17 cps against actual 24.5 cps

FY26 guidance improved.

$2 here we come.......

Sector average PE 14.2 which would equate to $2.50 a share

If TWR traded at PE of 14.2 on Npat then share price would be $4.44

107/342 * 14.2

Quote from: Poet on Nov 27, 2025, 09:29 AMIf TWR traded at PE of 14.2 on Npat then share price would be $4.44

107/342 * 14.2

Your correct. $2.50 is based on NPAT of $60m without the large events provisions.

Its clear they are growing and looking at the presentation they also have a goal for getting the management expense ration down to the 28-30% range by FY28.

I think its also clear they have some key competitive advantages over their competitors.  I see no logical reason why this can't grow over time to be trading on similar metrics to Suncorp, a PE of 15.7

If this happened based on my estimated EPS of (24 cps x 15.7) that's $3.77

Maybe a good one to have in the 2026 stock picking competition as well as plenty in your real portfolio ?

What a great result.  Very happy with the 16.5c dividend.

I topped up with a few more this morning.  I want to be super well positioned for that monster dividend feed on 29 January lol.

Quote from: Basil on Nov 27, 2025, 10:11 AMI topped up with a few more this morning.  I want to be super well positioned for that monster dividend feed on 29 January lol.

me toooooo

prepaid drip on steroids, how I think of it.

Quote from: Basil on Nov 27, 2025, 08:42 AMYeah, I'm really upset about that ROFL
Tower reports record FY25 result, increased dividends

Kiwi insurer, Tower Limited (NZX/ASX: TWR) today announced a record underlying profit performance for the year ended 30 September 2025, delivering an underlying NPAT of $107.2m and a reported profit of $83.7m. The result was driven by low large events costs and a significantly reduced business-as-usual (BAU) claims ratio, alongside customer growth. Would that be about 12% YLD Just topped up with another 20,000 Yippie Yi Yah
 
Reported profit reflects adjustments for increased Canterbury earthquake claims cost estimates, the ongoing cost of customer remediations and a provision for software impairment.

FY25 highlights:
• Underlying NPAT: $107.2m (up from $83.5m in FY24)
• Reported profit: $83.7m (up from $74.3m in FY24)
• Gross written premium (GWP): $600m, up 2%
• Customer numbers: 318,000 (up 4%)
• BAU claims ratio: 41% (improved from 48%)
• Combined operating ratio (COR): 74.1% (vs 79%)
• Management expense ratio (MER): steady at 31.4%

Reflecting the positive results, Tower's Board has declared a fully imputed final dividend of 16.5 cents per share. This brings total dividends for FY25 to 24.5 cents per share.
WOW !! 

Quote from: Basil on Nov 27, 2025, 10:11 AMI topped up with a few more this morning.  I want to be super well positioned for that monster dividend feed on 29 January lol.

Same here, looks like about 12% YLD at $2?

Quote from: Basil on Nov 27, 2025, 08:49 AMWhat's the case for income then ?
Its anyone's guess really but maybe they can pay about 20 cps fully imputed in FY26, down from 24.5 cps in FY25, (a year of very low claims on the large events contingency)
20 cps fully imputed = 27.8 cps gross.  On a net purchase price of $1.755, that's a gross yield of 15.8%.  Oh my goodness, surely not...

Seaweed, see this extract from my earlier post this morning.  I think its on a prospective 15.8% gross yield for FY26 which is stunning.    I added another 25,000 this morning.  Just on that modest extra top up the extra dividend in January is $4,125  I know this company has risk, (it is an insurance company after all) but I think investors can take comfort from knowing their 10 year average large events claim has been $15m and there's been some shocker weather events in those years especially the horrendous summer of 2022/3
15.8% gross is based on average utilization of the extreme event provisioning and its well worth noting the company has genuine ambitions to grow in the years ahead and with growth comes economies of scale.  Translation...dividend growth from the already very high level, on the balance of probabilities in the years ahead is a real chance !

Craig's think

FY26 NPAT guidance has been set at $55.0m to $65.0m (incl. full use of the large events allowance). On a headline basis, the mid-point of this range ($60m) is 5.1% above VA consensus ($57.1m). However, given TWR is factoring in a $45m large event allowance in FY26 (vs. the street at $51.7m), we must adjust for the difference, which equates to c.$4.8m (post-tax). On a LFL basis, we estimate the mid-point of FY26 guidance is c.3% below consensus. Furthermore, we note that TWR is assuming GWP growth of 5%-10% (vs. consensus of 3.2%), which may present additional downside if TWR's falls short of this target. While there is a reasonable amount to unpick, we do not see any major surprises in the result; (i) rates now appear to be stabilising, (ii) GWP will benefit from new partnership channels in FY26, and (iii) the Group's B/S remains strong. Stock to trade flat today....conference call 10am NZT

I also got a few more at $2... wasn't expecting to be underwater already lol

Quote from: Dolcile on Nov 27, 2025, 02:56 PMI also got a few more at $2... wasn't expecting to be underwater already lol

Might be a slow creep up to $2.x given that it only goes ex-div in January.

Quote from: Dolcile on Nov 27, 2025, 02:56 PMI also got a few more at $2... wasn't expecting to be underwater already lol

I'm under water quite a lot and tend to do a lot of floating, but at the moment my average price was $1.49 and climbing. :) 

Quote from: Basil on Nov 27, 2025, 10:49 AMSeaweed, see this extract from my earlier post this morning.  I think its on a prospective 15.8% gross yield for FY26 which is stunning.    I added another 25,000 this morning.  Just on that modest extra top up the extra dividend in January is $4,125  I know this company has risk, (it is an insurance company after all) but I think investors can take comfort from knowing their 10 year average large events claim has been $15m and there's been some shocker weather events in those years especially the horrendous summer of 2022/3
15.8% gross is based on average utilization of the extreme event provisioning and its well worth noting the company has genuine ambitions to grow in the years ahead and with growth comes economies of scale.  Translation...dividend growth from the already very high level, on the balance of probabilities in the years ahead is a real chance !

Sounds good to me. I will up your 25,000 to 30,000 and will buy more on close ;) 

36,000 extra now, sorry mate I couldn't help myself and that might be a moving target too lol

Everything is down today so it's nice to see TWR, SEK and TRA still holding up, lol.

Great times for the early fans.

Just wondering though, how the year after this is going to look like? Analysts as well as the company seem to look at somoething like 15 to 17 cents EPS for 2026, and hey - who can say what comes afterwards.

Might be the time of enjoying the peak ... but leave the boat before it crushes down again. Even insurance is a business, and if the returns are too good everybody will move into it.

Quote from: BlackPeter on Nov 28, 2025, 10:46 AMGreat times for the early fans.

Just wondering though, how the year after this is going to look like? Analysts as well as the company seem to look at somoething like 15 to 17 cents EPS for 2026, and hey - who can say what comes afterwards.

Might be the time of enjoying the peak ... but leave the boat before it crushes down again.

Crikey "Peak Tower" according to BP.

But then again isn't this the poster who continually reminds us that no one can predict the future.

It's just as likely that TWR will exceed its projections for 2026/7.

Quote from: BlackPeter on Nov 28, 2025, 10:46 AMGreat times for the early fans.

Just wondering though, how the year after this is going to look like? Analysts as well as the company seem to look at somoething like 15 to 17 cents EPS for 2026, and hey - who can say what comes afterwards.

Might be the time of enjoying the peak ... but leave the boat before it crushes down again. Even insurance is a business, and if the returns are too good everybody will move into it.

Lets have a look at the facts.  According to Tower in their presentation yesterday the 10 year average extreme events is $15m and they are providing $45m so in an average year there's going to be $30m before tax ($21.6m after tax) over provisioning that will flow through to operating profit after tax which at the mid point of forecast is $60m so a total estimated for FY26 of ($60m + $21.6m) = $81.6m on 345.2m shares = EPS of 23.64 cps.

Craigs reckon the industry average is a PE of 14.2 so 14.2 x 23.64 = $3.36.  Back out the forthcoming 16.5 cps divvy from the $1.93 share price today and treat it as a return of capital that means you're effectively only paying $1.93 - 0.165 =  $1.765 for forecast FY26 earnings of 23.64 cps = forward PE of only 7.5.

If you read through the presentation materials you'll see they have clearly articulated plans for growth including access to Westpac customers from July 2026.
Maybe open both eyes and just look at the numbers objectively, read through the presentation and have a look at what metrics other insurance companies are trading on.  My forecast gross dividend is 15.8%.  You're being paid a record yield to enjoy future earnings growth and also buying on dirt cheap metrics. 

Well put, Basil.   

I got to the cash flow statement and was in investor heaven  ;)

Quote from: Left Field on Nov 28, 2025, 12:44 PMCrikey "Peak Tower" according to BP.

But then again isn't this the poster who continually reminds us that no one can predict the future.

It's just as likely that TWR will exceed its projections for 2026/7.

Wrong - everybody can predict the future ... and many do.

Its just that the likelyhood of these predictions coming true are quite close to random distributions.

The likelyhood for a prediction at which time the sun will rise tomorrow is pretty high (if you check the right calendar).

The likelyhood to predict the outcomes for an insurance company several years in advance ... well maybe the best you can do is look at TWRs past - and this wasn't that flash, was it?

But sure, they could do better - or worse. Their average EPS over the last 10 years was 5 cent per year. I think it was Basil who said (in other threads) that past records are the best prediction for the future, and if that's true, thelikelyhood for lower EPS is higher - isn't it?

But sure - neither you nor I (nor any analyst) can correctly predict TWR's 2027 result. Who knows - maybe all other insurance companies go bust and Tower is creaming another pile of huge earnings.

Would I put my money on this chance? Probably not.

I recommend people go onto Tower's website and get a quote on house insurance for their own home or any home they're thinking of buying.  Their software system is light years ahead of the competition.  It immediately assesses risk on an address specific basis and if they agree to insure you, (their system cuts out all sorts of high risk properties in low lying coastal area's) the system pre-populates a huge amount of data about the house being insured.  Try it for yourself first hand.  You'll be amazed at how their system works and its a key competitive advantage they have over their competitors.

Tower have invested a lot in recent years in reducing their risk and making their insurance quotes fair for the risk involved, (user pays).  This is a key reason the future for Tower is much brighter than their past and they are gaining market share. Don't take my word for it, try it.  https://www.tower.co.nz/house-insurance/?nst=SEM&gclid=c1085caa598618fa65673580d4b3ba30&gclsrc=3p.ds&msclkid=c1085caa598618fa65673580d4b3ba30&utm_source=bing&utm_medium=cpc&utm_campaign=Brand%20-%20House%20Insurance&utm_term=tower%20house%20insurance%20quote&utm_content=Tower%20-%20House%20Insurance

Towers online system is one of the best around and I suspect that the bigger players might be interested in heading that way.  I see one of the up in coming online Insurance company's Initio has just sold 49 percent to IAG. Tower is Initio largest competitor.

https://initio.co.nz/initio-next-chapter-iag/

FB bullish

Our target price lifts +17% to NZ$2.45, implying a 13.9x 12-month forward PE (using the full large-event allowance utilised likely once in ten years) or an 11.3x PE at our point large-event estimate. We view this as justified given the clearer medium-term growth path now provided by the WBC partnership—particularly in light of TWR's ongoing 27% discount to the average ANZ peers, with IAG, Suncorp, and QBE on 16.6x/15.4x/10.3x respectively, despite strong execution. OUTPERFORM.

I found myself wondering this morning whether I should draw down on our unused revolving credit facility, to buy more TWR!

Quote from: Basil on Nov 29, 2025, 07:10 PMI recommend people go onto Tower's website and get a quote on house insurance for their own home or any home they're thinking of buying.  Their software system is light years ahead of the competition.  It immediately assesses risk on an address specific basis and if they agree to insure you, (their system cuts out all sorts of high risk properties in low lying coastal area's) the system pre-populates a huge amount of data about the house being insured.  Try it for yourself first hand.  You'll be amazed at how their system works and its a key competitive advantage they have over their competitors.

Tower have invested a lot in recent years in reducing their risk and making their insurance quotes fair for the risk involved, (user pays).  This is a key reason the future for Tower is much brighter than their past and they are gaining market share. Don't take my word for it, try it.  https://www.tower.co.nz/house-insurance/?nst=SEM&gclid=c1085caa598618fa65673580d4b3ba30&gclsrc=3p.ds&msclkid=c1085caa598618fa65673580d4b3ba30&utm_source=bing&utm_medium=cpc&utm_campaign=Brand%20-%20House%20Insurance&utm_term=tower%20house%20insurance%20quote&utm_content=Tower%20-%20House%20Insurance

BP does have a point there - Tower went through a lot of change and there is not much performance data under the new system compared to their past performance, especially with the good weather over the past 2 years. I think this is currently what is holding back the share price.

If they can deliver on their promises then watch that share price continue to rise. Let's say $4 this time next year lol.

Management has continued to stress about "returning to the mean" as well.

Quote from: Dolcile on Nov 30, 2025, 08:18 AMI found myself wondering this morning whether I should draw down on our unused revolving credit facility, to buy more TWR!

For what its worth that's a remarkable coincidence. Having sat there unused for more than a decade I was just wondering the exact same thing on Friday. I'm currently fully invested in the market but there's a few hundred thousand I could tap into there. It would certainly be much more than self funding with Tower's huge yield. It's either that, be happy with my already significant Tower stake, reinvesting significant HLG and KPG divvies due into Tower next month or selling part of something I own to buy more or some combination of the above.  I already topped up with another 36,000 after the result. What next to do ?  Hmmm.

Quote from: alkebab on Nov 30, 2025, 08:26 AMBP does have a point there - Tower went through a lot of change and there is not much performance data under the new system compared to their past performance, especially with the good weather over the past 2 years. I think this is currently what is holding back the share price.

If they can deliver on their promises then watch that share price continue to rise. Let's say $4 this time next year lol.

Management has continued to stress about "returning to the mean" as well.

10 year large event average cost of $15m per annum and other forecast numbers speak for themselves. Not concerned if BP or anyone else sees it differently and always happy to follow my own nose for a feed. It seems to work too well, I'm getting to be too well fed lol. I think close to $3 is a real chance over the next 12-18 months and then there's that huge yield to enjoy while we wait for further share price gains.

Quote from: Basil on Nov 30, 2025, 08:55 AMI already topped up with another 36,000 after the result. What next to do ?  Hmmm.

Maybe the % of your TOTAL NZX portfolio allocated to a particular company (or risk) is a more important/relevant consideration than the actual share numbers?

For example, I started investing in TWR at around 5% of my portfolio than as I grew more confident I took it to 10%. Currently TWR 23% of my portfolio. That's enough for me.

Anyways JMHO.

Quote from: Basil on Nov 29, 2025, 07:10 PMI recommend people go onto Tower's website and get a quote on house insurance for their own home or any home they're thinking of buying.  Their software system is light years ahead of the competition.  It immediately assesses risk on an address specific basis and if they agree to insure you, (their system cuts out all sorts of high risk properties in low lying coastal area's) the system pre-populates a huge amount of data about the house being insured.  Try it for yourself first hand.  You'll be amazed at how their system works and its a key competitive advantage they have over their competitors.

Tower have invested a lot in recent years in reducing their risk and making their insurance quotes fair for the risk involved, (user pays).  This is a key reason the future for Tower is much brighter than their past and they are gaining market share. Don't take my word for it, try it.  https://www.tower.co.nz/house-insurance/?nst=SEM&gclid=c1085caa598618fa65673580d4b3ba30&gclsrc=3p.ds&msclkid=c1085caa598618fa65673580d4b3ba30&utm_source=bing&utm_medium=cpc&utm_campaign=Brand%20-%20House%20Insurance&utm_term=tower%20house%20insurance%20quote&utm_content=Tower%20-%20House%20Insurance

Tried it. They say its too complicated for their software. Apparantly I need to call their service desk. Hmm ...

Quote from: Basil on Nov 30, 2025, 08:55 AMFor what its worth that's a remarkable coincidence. Having sat there unused for more than a decade I was just wondering the exact same thing on Friday. I'm currently fully invested in the market but there's a few hundred thousand I could tap into there. It would certainly be much more than self funding with Tower's huge yield. It's either that, be happy with my already significant Tower stake, reinvesting significant HLG and KPG divvies due into Tower next month or selling part of something I own to buy more or some combination of the above.  I already topped up with another 36,000 after the result. What next to do ?  Hmmm.

Great minds  ;) 

Tower definitely leans itself to a core part of the income portfolio I'm looking to build. 

I think we need a longer track record at this profit level to know for sure if it is sustainable or not. Especially for the large events allowance, why is it so much larger than the last 10 year avg utilisation? At this stage I'm still wary of staying in this for too long now that it has run up so much. Seems like most fundies are selling down and someone else (probably retail, dividend funds) is buying in. I reckon once all the fundies go on holiday over xmas we will see this back over $2 easily.

I think you are doing yourself a dissevrice by ignoring TWR's changed business model.
The business today is vastly different from just 5 years ago and light years away from where it was 10 years ago,therefore a 10 year track record will be very misleading.
The days of unlimited policy liabilities is over.
The days of insuring "risk" homes/land and "risk" motor vehicles are gone.
Sensible and less costly underwriting is in place.
TWR was trading at $1.94 on Friday cum a 16.5 cent fully imputed dividend that goes ex div on14th January and is payable on 29th January.That is a gross dividend of 8.49%,avaliable in just 2 months..

Quote from: lorraina on Nov 30, 2025, 07:03 PMThat is a gross dividend of 8.49%,avaliable in just 2 months..

Even better,  I think that is a net yield !

   Tower says more than 90% of its new house policies now fall into low or very low flood-risk categories, contributing to a NZ$9.4m lift in annual net profit to NZ$83.7m as it expands risk-based pricing across hazards including sea surges and landslides. Gross written premiums and policy numbers both rose around 10%–11%, average premiums fell due to lower-risk customers, and analysts say Tower's approach gives it a competitive edge as it grows its home insurance business.

Quote from: lorraina on Dec 01, 2025, 08:49 AMTower says more than 90% of its new house policies now fall into low or very low flood-risk categories, contributing to a NZ$9.4m lift in annual net profit to NZ$83.7m as it expands risk-based pricing across hazards including sea surges and landslides. Gross written premiums and policy numbers both rose around 10%–11%, average premiums fell due to lower-risk customers, and analysts say Tower's approach gives it a competitive edge as it grows its home insurance business.

My house and car insurances all were reduced substantially when I shifted to TWR as I fell into their low risk categories.  On the other hand I've heard young drivers of WRX Subaru's etc complaining loudly about their high premiums. Makes perfect sense to me.

These days my dividends cover my annual premiums by over 3 x's. 

Quote from: lorraina on Dec 01, 2025, 08:49 AMTower says more than 90% of its new house policies now fall into low or very low flood-risk categories, contributing to a NZ$9.4m lift in annual net profit to NZ$83.7m as it expands risk-based pricing across hazards including sea surges and landslides. Gross written premiums and policy numbers both rose around 10%–11%, average premiums fell due to lower-risk customers, and analysts say Tower's approach gives it a competitive edge as it grows its home insurance business.

All very good, but bear in mind that the 90% of low and extremely low flood risk only applies to newly issued policies and that in any case the underlying environment is that only 12% of NZ residential properties are considered to be at any risk of flooding.

Quote from: Poet on Dec 01, 2025, 10:29 AMAll very good, but bear in mind that the 90% of low and extremely low flood risk only applies to newly issued policies and that in any case the underlying environment is that only 12% of NZ residential properties are considered to be at any risk of flooding.

As I understand it, as each house comes up to its annual renewal, Tower are repricing all home insurance policies based on their new risk measurement system.  The very reason that Tower are gaining market share is they're not asking the 88% of homeowners not at risk of flooding and sea surge to subsidise the risk of  those that are.  By way of example, from memory, our home policy went down about 10% this year despite 3 % inflation.  That wasn't a new policy, it simply rolled over at its annual renewal in August.

The funds must be selling again, lol.

We won't hear much until February when they issue the first guidance updates, then possibly May with the mid year reports.

The mid year report will be interesting especially if they can deliver on the promises.

Just bought another 10,000. At $1.94 that is giving me about 12.7% YLD. Then a little while later someone places 60,000 more on to sell at $1.94. Could be a ghost seller.   

ACC have been reducing their stake and reloading their sell side offer on a regular basis.  I have calculated an estimated 15.8% gross yield for FY26 with the real prospect of further increases in the dividend level in subsequent years, see earlier posts.  I've now bought an extra 55,000 since the annual result announcement , you have to try and keep up mate. :P

Quote from: Basil on Dec 04, 2025, 12:03 PMACC have been reducing their stake and reloading their sell side offer on a regular basis.  I have calculated an estimated 15.8% gross yield for FY26 with the real prospect of further increases in the dividend level in subsequent years, see earlier posts.  I've now bought an extra 55,000 since the annual result announcement , you have to try and keep up mate. :P

LOL, I have topped up with 4 blocks of 10,000 per block since 27/11/25. Just a bit behind you now with 53,000  :)  What about SEK, see you over on the SEK page.

You guys running 8 figure investment accounts or something?

(https://media1.giphy.com/media/v1.Y2lkPTc5MGI3NjExczlyMGZrMXUwNHAzNW5jM2tqeTNoNmwwNWJ4eDU0bHNoMDhwdmVicSZlcD12MV9pbnRlcm5hbF9naWZfYnlfaWQmY3Q9Zw/FaKV1cVKlVRxC/giphy.gif)

Might need a stocktalk related parties SPH notice at this rate...

FMA multi policy discount issue now resolved with no impact on FY26 results as it's already been fully provisioned in prior financial periods. Good news to get that monkey off Tower's back.  https://www.nzx.com/announcements/464218

TWR keeps hitting new hights, gotta like it.

Metrics are compelling and as you suggest the TA is also very encouraging. Looking forward to receiving the monster dividend next month.

Quote from: Basil on Dec 18, 2025, 10:20 AMMetrics are compelling and as you suggest the TA is also very encouraging. Looking forward to receiving the monster dividend next month.

One of the few stocks that's been holding its value or more since the mini peak in the NZX in October-November. SEK TRA HLG being the others I've been watching.

Power companies are getting hammered right now except GNE though it's dropped a bit lately too.

Comments below from the November Salt Long Short Fund update

QuoteOur large holding in Tower (TWR, +4.9%) is not quite the
mega-high conviction long that it was when the share price
was 50% lower, but it is still sizeable at around a 5% weighting.
Their result was excellent and featured a massive final
dividend of 16.5cps to make 24.5cps for the year. It seems like
yesterday that we received a lot of heat for owning this name
when the share price was 70cps! The insurance cycle has
clearly peaked, but despite pricing headwinds, TWR should
still be able to drive moderate GWP growth by growing policy
numbers, with the upcoming Westpac deal being a highlight.
Unusually low BAU claims were a feature of 2025 and analysts
assume these claims normalise in the 2026 year. Directionally,
this will no doubt occur to some extent, but the first two
months have started well and TWR's housing book is far lower
risk than in the past. Our sense is there could be upgrade risk
and that's before we even get to the vagaries of large claims
where market assumptions continue to be worst case.

Quote from: Basil on Dec 18, 2025, 10:20 AMMetrics are compelling and as you suggest the TA is also very encouraging. Looking forward to receiving the monster dividend next month.

If we can just get through the $2.00 line.... 

I agree with Salt's views on Tower. Have been long since 65c and taken some profits around $1.70. The yield is huge and valuation still alright but a takeover almost impossible unless a genuine 3rd party enters NZ.

Gross yield looking forward at $2.00 is around 11-12%...

Quote from: Arbroath on Dec 19, 2025, 07:20 PMI agree with Salt's views on Tower. Have been long since 65c and taken some profits around $1.70. The yield is huge and valuation still alright but a takeover almost impossible unless a genuine 3rd party enters NZ.

Gross yield looking forward at $2.00 is around 11-12%...

Dai-ichi Life came and took out Partners Life , so never say never .

I had a bit of cash on the sideline so decided to top up another tranche of TWR.   

Yes, I did the same on Friday 😜

Quote from: Dolcile on Dec 22, 2025, 02:15 PMI had a bit of cash on the sideline so decided to top up another tranche of TWR.   

I sold SPK today and reinvested in TWR.

I will be very surprised if TWR doesn't re-rate upwards after they go ex 16.5c divi on 14th January 🤔

Quote from: Dolcile on Dec 22, 2025, 02:15 PMI had a bit of cash on the sideline so decided to top up another tranche of TWR.   

Well my lovely GFL[usx] divie hit the bank at noon and now a good part of it has been recycled into more TWR shares for the 16.5 cps fully imputed divie on 29th January..

still trying to break through that $2.00 ceiling  :(

that divi is going to be a nice new year's gift!

there we go - thru 2 yesterday hit 2.02 today. 

Very nice  ;D

Quote from: Dolcile on Dec 31, 2025, 01:32 PMVery nice  ;D

Damn, that was a strong finish. Didn't look like much volume today until the close. I'd love to see $2.20 before ex-div and close above $2 after ex div. Obviously higher the better lol.

Tower up strongly intraday and $2 now well and truely cleared.   

Looking forward to my dividend later this month. 

Tower trades ex dividend next Wednesday 14th and at the recent run rate might trade north of $2 even after going ex dividend !
https://api.nzx.com/public/announcement/463466/attachment/457757/463466-457757.pdf
I can't help myself wondering with it being such a monster dividend and there being no DRIP program, how many people might use the dividend to run their own dividend reinvestment program and buy more Tower shares ?

For what it's worth Basil, I did my own DRP in advance but dumping my emergency fund into TWR which will be repaid by the dividend. 

Asked Grok to provide to analyse NZX Dividend stocks and provide me a list of the top 20

TWR was top of the list.  VHP was #20

This ranking favors stocks with resilient dividends (less likely to cut) and upside from strong fundamentals. For example, top picks like TWR and LIC combine high yields with robust balance sheets, while lower ranks have red flags like overextended payouts. If you need details on specific stocks or adjustments (e.g., sector focus), let me know!

I also asked about natural disasters - as TWR is an insurance company:

yes, as an insurance company operating primarily in New Zealand (and some Pacific markets), Tower Limited (TWR.NZ) faces inherent exposure to natural disasters, particularly earthquakes, cyclones/storms, floods, landslides, and increasingly sea surge due to climate factors. New Zealand has one of the highest natural disaster risk profiles globally, which is a key ongoing concern for the entire local insurance sector.That said, Tower appears well-positioned to manage these risks without major threats to its dividend sustainability in the near term, based on recent developments (as of late 2025/early 2026).Key Strengths in Risk ManagementTower has invested heavily in risk-based pricing (introduced for earthquakes in 2018, floods in 2021, and expanded to landslide and sea surge in 2025). This uses detailed, address-level data to better match premiums to actual risks, reducing exposure to high-hazard properties:Over 90% of new residential policies now have low or very low flood exposure.
For existing customers, the 2025 expansions mean ~90% see reductions in the natural hazards portion of premiums (average ~$70 savings), while higher-risk properties face phased increases.

This approach helps avoid cross-subsidisation, improves portfolio quality, and supports profitability even in a high-risk environment.Tower also maintains a robust reinsurance program to protect against large-scale catastrophe events:For the financial year to September 2026, catastrophe cover has been increased to NZ$915 million for the first two events (up from $800 million previously), with additional cover up to $85 million for a third event.
Retention/excess per event is NZ$20 million (a slight increase but still manageable).
Reinsurance costs are expected to be lower as a percentage of gross written premiums (~10.7-11% vs. higher in prior years), thanks to favorable market conditions, structural changes (e.g., shifting to excess-of-loss for large individual risks), and Tower's improved risk profile.

In FY25 (ended September 2025), Tower benefited from relatively benign weather, with only $7 million in large event claims (from minor events like Dunedin flooding and Cyclone Tam). Recent storms in late 2025 are estimated at $4.5 million (to hit FY26), well within their $45 million large events reserve allowance.This contributed to a record underlying profit of $107.2 million in FY25, allowing a strong dividend increase (total 24.5 cents per share for FY25, fully imputed). Guidance for FY26 assumes normalization of weather but remains positive ($55-65 million underlying NPAT).Potential ConcernsA major catastrophe (e.g., a significant earthquake like past Canterbury events or a severe cyclone) could still generate substantial claims. Historical events like Cyclone Gabrielle (2023) led to higher costs and reinsurance recoveries, but Tower's program is designed to cap net exposure.
Ongoing legacy issues from Canterbury earthquakes (e.g., a small number of open/reopened claims) contributed to non-underlying charges in FY25, though these are diminishing (only 13 properties open as of late 2025).
Broader sector risks include rising reinsurance costs globally from increased disaster frequency, potential premium affordability issues in high-risk areas, and calls for government climate adaptation funding to avoid an "insurance crisis" (as Tower's CEO highlighted in early 2025).
Dividends could face pressure if multiple large events occur in quick succession (beyond the three-event cover), but the current setup (including a conservative reserve) provides a good buffer.

Overall Assessment for Dividend SustainabilityTower's focus on risk mitigation, strong reinsurance, and recent profitability (with high ROE and low combined operating ratio) make it resilient compared to peers. The high dividend yield (~11-12% trailing in recent data) remains supported, with the Board distributing benefits from benign periods while maintaining prudence. Natural disasters are a core risk for any NZ insurer, but Tower's proactive strategies (risk-based pricing + solid cat cover) mitigate this better than in the past, and no major red flags appear for 2026 based on current info.If a big event hits, monitor updates closely — but on balance, it's not a deal-breaker for TWR as a dividend play. Let me know if you'd like a deeper dive into their latest annual report or comparisons with other NZ insurers!

Wow, A.I is getting better and better. That's a superb summary of the situation.  Could you please post the top 20 dividend stocks A.I selected in order of preference. Thanks in advance.

I just tried this with Grok and it gave me Spark as #1 so I binned it lol

I'm trying copilot research agent now. 

Quote from: Dolcile on Jan 11, 2026, 11:23 AMI just tried this with Grok and it gave me Spark as #1 so I binned it lol

I'm trying copilot research agent now. 

I tried the same with Gemini.  It doesn't appear to be picking up the value of imputation credits or the tax advantages of the PIE structure of the REITS.

Quote from: Basil on Jan 11, 2026, 10:31 AMWow, A.I is getting better and better. That's a superb summary of the situation.  Could you please post the top 20 dividend stocks A.I selected in order of preference. Thanks in advance.

Good morning! Based on current market data from early 2026, I've analyzed dividend-paying stocks listed on the NZX. I focused on those with positive yields, drawing from comprehensive lists and financial metrics across sources. The ranking prioritizes dividend sustainability (e.g., lower payout ratios under 80-100%, positive free cash flow, reasonable debt levels, strong return on equity above 10%, and solid profit margins) alongside growth potential (e.g., lower P/E ratios indicating value relative to earnings, positive indicators like ROE and profit margins suggesting future expansion capability). High yields are factored in but deprioritized if sustainability is weak (e.g., excessively high payouts or negative cash flows).

Note: Not all NZX stocks pay dividends (only about 60-80 do consistently), and data is subject to market changes. I prioritized major ones with available metrics; smaller or less liquid stocks may exist but weren't included if data was incomplete. Metrics like 5-year dividend growth and expected EPS growth were often unavailable or inconsistent across sources.

Here's the top 20 ranked from best to worst:

| Rank | Company Name | Ticker | Dividend Yield (Trailing) | Payout Ratio | Return on Equity | Debt to Equity | Free Cash Flow (TTM) | Key Notes |
|------|--------------|--------|---------------------------|--------------|------------------|----------------|----------------------|-----------|
| 1 | Tower Limited | TWR.NZ | 11.78% | 66.18% | 23.54% | 7.28% | 108.64M | Strong sustainability with moderate payout, very high ROE, minimal debt, positive FCF; low P/E (9.09 trailing, 9.76 forward) suggests good growth value.<grok:render card_id="935f75" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">54</argument>
</grok:render> |
| 2 | Livestock Improvement Corporation Limited | LIC.NZ | 12.20% | 26.55% | 10.69% | 7.81% | 22.72M | Highest yield with excellent sustainability (very low payout/debt, positive FCF); low P/E (4.55 trailing) indicates undervalued growth potential.<grok:render card_id="795da3" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">55</argument>
</grok:render> |
| 3 | Argosy Property Limited | ARG.NZ | 5.36% | 36.84% | 11.92% | 62.69% | 85.09M | Low payout, strong ROE and exceptionally high profit margin (97.51%); positive FCF and low P/E (6.93 trailing) support growth in real estate sector.<grok:render card_id="c4f18d" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">41</argument>
</grok:render> |
| 4 | Skellerup Holdings Limited | SKL.NZ | 4.84% (5.44% forward) | 88.38% | 23.23% | 24.47% | 47.55M | Slightly higher payout but outstanding ROE, low debt, strong profit (15.43%), positive FCF; P/E (19.05 trailing) reasonable for industrial growth.<grok:render card_id="84330c" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">40</argument>
</grok:render> |
| 5 | South Port New Zealand Limited | SPN.NZ | 3.47% | 53.36% | 21.00% | 47.03% | 11.01M | Balanced payout, high ROE and profit (21.04%), positive FCF; P/E (16.21 trailing) suggests steady transportation sector potential.<grok:render card_id="f0b2a2" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">52</argument>
</grok:render> |
| 6 | Delegat Group Limited | DGL.NZ | 4.24% | 41.25% | 8.59% | 75.77% | 43.5M | Low payout, solid profit (14.03%), positive FCF; low P/E (9.67 trailing) points to value in consumer goods/wine industry growth.<grok:render card_id="dcb03b" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">47</argument>
</grok:render> |
| 7 | Property For Industry Limited | PFI.NZ | 3.50% | 39.34% | 7.62% | 49.88% | 39.12M | Low payout, very high profit (83.18%), positive FCF; P/E (11.56 trailing) good for real estate expansion.<grok:render card_id="b791c9" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">51</argument>
</grok:render> |
| 8 | Fonterra Co-operative Group Limited | FCG.NZ | 9.50% | 78.33% | 12.16% | 37.99% | -1.18B | High yield with decent ROE and low debt, but negative FCF raises sustainability concerns; low P/E (10.02 trailing) for dairy sector potential.<grok:render card_id="1e90fb" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">35</argument>
</grok:render> |
| 9 | Contact Energy Limited | CEN.NZ | 4.19% | 93.75% | 12.31% | 88.73% | 128M | Borderline high payout but good ROE/profit (9.62%), positive FCF; P/E (22.33 trailing, 22.73 forward) moderate for energy growth.<grok:render card_id="aa4280" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">48</argument>
</grok:render> |
| 10 | EBOS Group Limited | EBO.NZ | 6.85% | 100.96% | 8.39% | 59.61% | 285M | High yield but elevated payout; positive FCF, ok ROE; higher P/E (23.46 trailing, 21.64 forward) for healthcare distribution growth.<grok:render card_id="e829b1" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">45</argument>
</grok:render> |
| 11 | Genesis Energy Limited | GNE.NZ | 5.84% | 91.16% | 5.98% | 50.06% | 3.92M | Decent yield but high payout and low ROE; positive FCF; P/E (15.74 trailing, 30.77 forward) suggests limited near-term growth.<grok:render card_id="5076f0" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">38</argument>
</grok:render> |
| 12 | Air New Zealand Limited | AIR.NZ | 4.24% | 74.32% | 6.37% | 145.84% | 403.62M | Moderate payout and positive FCF, but high debt and low profit (1.87%); high forward P/E (28.49) limits growth outlook.<grok:render card_id="a522ba" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">56</argument>
</grok:render> |
| 13 | Goodman Property Trust | GMT.NZ | 3.38% | 90.24% | 4.05% | 27.01% | 132.21M | High payout and low ROE offset by low debt, high profit (43.90%), positive FCF; P/E (28.37 trailing) for real estate.<grok:render card_id="2f1c39" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">53</argument>
</grok:render> |
| 14 | Spark New Zealand Limited | SPK.NZ | 10.87% | 194.28% | 16.21% | 159.28% | -33.25M | Very high yield but unsustainable payout/debt, negative FCF; P/E (16.94 trailing, 17.89 forward) ok but risks high.<grok:render card_id="70f7ac" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">34</argument>
</grok:render> |
| 15 | Vector Limited | VCT.NZ | 5.13% | 162.86% | 4.19% | 58.34% | -65.33M | High payout, low ROE, negative FCF; moderate debt but limited growth (P/E 31.92 trailing).<grok:render card_id="b30631" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">43</argument>
</grok:render> |
| 16 | Kiwi Property Group Limited | KPG.NZ | 5.21% | 378.47% | 1.27% | 70.66% | -147.47M | Unsustainable high payout, low ROE, negative FCF; high P/E (73.26 trailing).<grok:render card_id="488530" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">42</argument>
</grok:render> |
| 17 | Precinct Properties NZ Ltd & Precinct Properties Investments Ltd | PCT.NZ | 5.62% | 978.26% | 0.55% | 85.40% | -161.55M | Very high payout, low ROE, negative FCF; extremely high P/E (175.36 trailing).<grok:render card_id="ff8dc4" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">39</argument>
</grok:render> |
| 18 | Chorus Limited | CNU.NZ | 6.14% | 6,959.46% | 0.57% | 703.17% | 138.4M | Extremely high payout/debt, low ROE/profit; very high P/E (1.28k trailing).<grok:render card_id="e86470" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">37</argument>
</grok:render> |
| 19 | Mercury NZ Limited | MCY.NZ | 3.66% | 33,714.29% | 0.02% | 47.83% | -3.99M | Unsustainable payout, near-zero ROE/profit, negative FCF; extremely high P/E (9.40k trailing).<grok:render card_id="11f83c" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">57</argument>
</grok:render> |
| 20 | Vital Healthcare Property Trust | VHP.NZ | 4.91% | 55.73% | -2.94% | 82.61% | 14.15M | Low payout but negative ROE/profit (-28.92%), moderate debt; P/E (12.90 trailing) but poor growth signals.<grok:render card_id="826689" card_type="citation_card" type="render_inline_citation">
<argument name="citation_id">44</argument>
</grok:render> |

This ranking favors stocks with resilient dividends (less likely to cut) and upside from strong fundamentals. For example, top picks like TWR and LIC combine high yields with robust balance sheets, while lower ranks have red flags like overextended payouts. If you need details on specific stocks or adjustments (e.g., sector focus), let me know!

Quote from: Dolcile on Jan 11, 2026, 11:23 AMI just tried this with Grok and it gave me Spark as #1 so I binned it lol

I'm trying copilot research agent now. 

What exactly did you ask for?

I asked Grok to analyse nzx dividend stocks and rank the top 20 based on dividend sustainability and growth potential

Hand-break coming off - not much on the sell side

Quote from: Dolcile on Jan 13, 2026, 10:14 AMHand-break coming off - not much on the sell side

It's as if all of the funds all decided to........not sell for once. lol.

Bought some more yesterday.

Even at $2.39 you're still getting 6.3% after tax with tomorrow's dividend (pointing at the 100000 sell at 2.39).

ex dividend tomorrow.

Quote from: 777 on Jan 13, 2026, 10:28 AMex dividend tomorrow.

And encouraging trading today ex dividend.

Ronaldson on the other channel looks pretty safe with his hopes for $2.00 by the end of the month I reckon  :) 

BINGO for Ronaldson and other holders.  $2 ex divvy, (last trade $2.01) came more than 2 weeks early and we haven't even got into the DRIP program some holders will be running on their own account to reinvest their dividend payment into more shares. 

Quote from: Basil on Jan 15, 2026, 12:10 PMBINGO for Ronaldson and other holders.  $2 ex divvy, (last trade $2.01) came more than 2 weeks early and we haven't even got into the DRIP program some holders will be running on their own account to reinvest their dividend payment into more shares. 

Crikey, Invest Direct quoting a dividend of $0.34 cps or 17.06% at today's SP, that should help keep the SP above $2.00!

PE of 8.5 showing on their website for a growth company looks bloody amazing too, but I agree, 17% yield is incredible.  Long may it continue. but even acknowledging last year was a stellar one for claims and even assuming they use up their 10 year average of $15m of their $45m extreme event provision this year, the current year yield is still going to be fabulous.   I reckon ~ 21 cps in dividends is on the cards this year which is nearly 15% gross.

Could easily yield about 14% gross this year at $2.00 but that assumes only $15m of one off events.

The thing about one off events is they don't usually come in around the average. More likely only $5-10m or $50m etc so better to think in terms of receiving about 80% of the $60m underlying profit. That's still a 10% gross yield.

I've just seen an interesting post on the New Zealand subreddit...

QuoteTower Insurance Redundancy

Just been advised today that my employer is proposing to make my role redundant. The are downsizing and the people in the firing line are those who work from home. There is no process for it to be performance based at all...

I'm taking this as a sign that the investment in IT / AI is paying off and Tower is further optimising its cost structure.

Interesting interview with Tower's CEO reported in the herald on Tuesday this week, sorry its paywalled
https://www.nzherald.co.nz/business/companies/summer-questions-tower-ceo-paul-johnston-on-keeping-insurance-affordable-and-sustainable-as-the-company-celebrates-a-stellar-year-on-the-nzx/premium/FMQZEWUTQFDH3MZRBLDDWPTT5M/
Excerpts:-

QuoteHow are you using AI to change your business?
One of the most exciting opportunities for us is the potential for AI to improve access and equity in insurance. Used well, AI could help simplify insurance, make information clearer, and remove barriers for people who might otherwise struggle with complex processes. It could help us respond faster after severe weather events, support vulnerable customers more proactively, and provide services in ways that meet people where they are.

We're still in the early stages, progressing carefully but with good momentum. We've already piloted AI in part of our claims process to make it faster and more transparent for customers. And we were proud to be one of just seven organisations globally selected for an Amazon Web Services pilot, based on our work launching an AI‑enabled contact centre using Amazon Connect

QuoteWhat would you rate as your greatest success?
Being part of leading Tower through this stage of its transformation into a customer-centric, digital-first insurer has been a proud moment, but it's absolutely a team achievement, not mine alone.

.

Thanks for sharing this Basil. Tower is certainly in good hands with Paul Johnston as the CEO 🥳

Quote from: Dolcile on Jan 15, 2026, 02:01 PMTower Insurance Redundancy

Just been advised today that my employer is proposing to make my role redundant. The are downsizing and the people in the firing line are those who work from home. There is no process for it to be performance based at all...

I'm taking this as a sign that the investment in IT / AI is paying off and Tower is further optimising its cost structure.

More details in this article behind a paywall.  46 staff made redundant. Rotorua office closing as a result of AI savings/efficiencies..

https://businessdesk.co.nz/article/markets/tower-to-cut-46-roles-end-rotorua-office-lease

And moving more roles to Fiji I understand

2.10 by the end of the day? Quite possibly

Very interesting to see significant new cost efficiencies at this very early stage of their A.I. development program.

Dolcile.  Sure has enjoyed a good run.  Its like a good bottle of wine.  Take the cork out and let it breathe for a while.  It'll get back to $2.10 in due course., probably not today but you never know lol

Quote from: Dolcile on Jan 16, 2026, 10:07 AM2.10 by the end of the day? Quite possibly

Impressive recovery after going ex-div!!

I look forward to the juicy dividend hitting my bank account soon!!

Sharesies also showing a gross yield and PE of 17% and 8.5x, respectively. 

Quote from: Dolcile on Jan 17, 2026, 08:08 AMSharesies also showing a gross yield and PE of 17% and 8.5x, respectively. 

From the ex dates of 11/6/25 and the recent 14/1/26; the dividends plus attached imp crs do come to essentially 34c which on $2.00 share price sits at the 17% gross yield. Looks close enough for me.
https://www.nzx.com/instruments/TWR/dividends

I'm satisfied the prior ex dividend 15/1/25 of 6.5c without any imp crs isn't being caught. All perhaps any observing novice investors need watch out for here is that it is something of a potential good ducks in a row year for the company, there is some risk to remain mindful of as always. That said there is plenty of commentary suggests it's not that far from what may be the future norm for this stock to hit such like payout levels.

Agreed at the moment I am reading it as a good income yield driven stock, discl hold sufficient weight here for my criteria.

Quote from: Otago K on Jan 17, 2026, 09:29 AMFrom the ex dates of 11/6/25 and the recent 14/1/26; the dividends plus attached imp crs do come to essentially 34c which on $2.00 share price sits at the 17% gross yield. Looks close enough for me.
https://www.nzx.com/instruments/TWR/dividends

For longer term holders, even nicer returns if your average holding SP cost is well below the current SP  ;) 

Floods in Northland worse than Gabrielle the paper says

Just as well Tower don't have to many customers up north

Quote from: winner (n) on Jan 18, 2026, 02:44 PMJust as well Tower don't have too many customers up north

How would you know that?

Tower has been getting out of flood prone high risk area's.

If there was a large claim situation for Tower, how soon would they let the market know?

It usually takes them a few weeks to get a handle on the scope of any material event. I see the annual meeting date has just been announced on 18 February. I am back from holiday by then and planning on attending and will ask at the meeting for an updated figure on how much of their $45m extreme event provision has been used.

Quote from: Stoploss on Dec 20, 2025, 09:04 AMDai-ichi Life came and took out Partners Life , so never say never .

Interesting.........

https://www-au.computershare.com/WebContent/doc.aspx?docid=%7Bb41c9a7e-3068-4669-bc7c-d7ac88367452%7D

Naomi Ballantyne is up for re-election as director, who also sits on the board with Dai-ichi Asia. Probably just a coincidence lol.

Nothing on Stiassny's replacement.

Quote from: Basil on Nov 29, 2025, 07:10 PMI recommend people go onto Tower's website and get a quote on house insurance for their own home or any home they're thinking of buying.  Their software system is light years ahead of the competition.  It immediately assesses risk on an address specific basis and if they agree to insure you, (their system cuts out all sorts of high risk properties in low lying coastal area's) the system pre-populates a huge amount of data about the house being insured.  Try it for yourself first hand.  You'll be amazed at how their system works and its a key competitive advantage they have over their competitors.

Tower have invested a lot in recent years in reducing their risk and making their insurance quotes fair for the risk involved, (user pays).  This is a key reason the future for Tower is much brighter than their past and they are gaining market share. Don't take my word for it, try it.  https://www.tower.co.nz/house-insurance/?nst=SEM&gclid=c1085caa598618fa65673580d4b3ba30&gclsrc=3p.ds&msclkid=c1085caa598618fa65673580d4b3ba30&utm_source=bing&utm_medium=cpc&utm_campaign=Brand%20-%20House%20Insurance&utm_term=tower%20house%20insurance%20quote&utm_content=Tower%20-%20House%20Insurance

I just tried this for our house, we are a low-risk modern build, it came in at 35% lower than we paid last year, which has been going up annually with AA. I did try with the cars 6 months ago and there was no saving really.
The policy renews in May, I expect I will switch to Tower.

Am looking forward to my Big div tomorrow and last weeks big SEK div and also TRA div tomorrow 8)

Quote from: seaweed on Jan 28, 2026, 02:33 PMAm looking forward to my Big div tomorrow and last weeks big SEK div and also TRA div tomorrow 8)

Yeap, that'll keep the boat full of fuel and my family and dog full of food for a very long time !

On a red day for the market it is nice to see TWR in the green.  I'm assuming many existing shareholders have used their dividend to top up.

Average broker target price $2.12 and as far as I know all 3 brokers are assuming full use of their $45m extreme weather provisioning, which could be the case this year.
Average forecast for the years ahead is for EPS of 17, 19 and 22 cps, (rounded)
Average dividend forecast is 13, 14 and 16 cps fully imputed = 18, 19, and 22 cps gross, (rounded)
Forward PE for FY26 is 11.
https://www.marketscreener.com/quote/stock/TOWER-LIMITED-12924419/finances/
2 brokers rate is a buy and 1 a hold.

Wellington getting a real beating - a bit too soon for TWR to assess the cost and report back to shareholders on 18th. Expect a wide guidance range perhaps?

Quote from: LoungeLizard on Feb 16, 2026, 12:22 PMWellington getting a real beating - a bit too soon for TWR to assess the cost and report back to shareholders on 18th. Expect a wide guidance range perhaps?

Times like this TWR holders just have to have trust in their management team (and keep their holding at a level where they are comfortable with the risk.)

The reality is that recent storm events are BAU for Tower.

Nice update from TWR

https://www.nzx.com/announcements/467670

They even use my BAU term to calm some recent bad weather nerves...

The BAU claims ratio of 43% was up from 38% in the prior comparable period and remains favourable compared to long-run averages of between 48% and 50%. Tower expects the BAU claims ratio to continue to increase but to remain below the long-term average this financial year.

Only $12.1m of the $45m extreme event provision used so far. Less used than I thought but recent storm will consume a bit more. Not bad considering the extremely wet summer we've had.

I particularly liked Michael's comment-"It continually frustrates me that our share price does not reflect our success. It should. And as shareholders we all deserve to benefit from it".

Just looking at Tower from a dividend yield perspective at $1.83  $12.1m of the $45m extreme weather event used so far + the recent storm event, let me guess and say ~ $17m used so far.  I think its fair to say they're going to use more, possibly considerably more than the 10 year average of $15m large event provision this year but hopefully there's some left over for a modest special divvy in January 2027. 

Even assuming all extreme provisioning is fully used up every single year, average broker forecast is for DPS of 13 cps, rising to 14 cps and 16 cps in the years ahead, all fully imputed.  13 / 0.72 = 18.05 cps gross = ~ 10% gross dividend yield FY26, 10.6% FY27 and 12.1% for FY28.

When you consider the prospect of some special dividends on top of those outstanding forecast yields, my goodness, is this the best dividend hounds stock on the NZX ?  https://www.marketscreener.com/quote/stock/TOWER-LIMITED-12924419/finances/

From a user perspective I am pleased to report they were outstanding last week with my wife's cracked windscreen.  I filed the claim online in the late afternoon, was called by the local Novus team first thing the following morning, new windscreen ordered that morning and installed the very next day.
Outstanding service and no excess because we had the optional glass extension on our vehicle policy.  Probably helps that its a popular mainstream type vehicle that's a few years old.  If it was some fancy new European vehicle I dread to think how long it would take for the new windscreen to arrive.

I heeded the Chairman's comments about climate change and the increased risks that may accrue. I think the markets have this in mind with their pricing

Quote from: Basil on Feb 18, 2026, 11:16 AMEven assuming all extreme provisioning is fully used up every single year, average broker forecast is for DPS of 13 cps, rising to 14 cps and 16 cps in the years ahead, all fully imputed.  13 / 0.72 = 18.05 cps gross = ~ 10% gross dividend yield FY26, 10.6% FY27 and 12.1% for FY28.

Is climate change risk more than the average of the last ten years and if so has this been factored into increased insurance premiums in recent years ?  That's the unknown but 10 year average use of $45m reserve is $15m according to Tower so $30m average extra income before tax over the last decade = $21.6m after tax on 340m shares = average expected special divvy of 6.35 cps in the years ahead.

Adding that to ordinary expected prospective dividends gives fully imputed DPS including average expected special divvies of 19.5 cps, (27 cps gross), 20.35 cps, (28 cps gross) and 22.35 cps, (31 cps gross) for the next 3 years.  Gross prospective yields including average expected special dividends at $1.83 become FY26 14.75%, FY27 15.3%, FY28 16.9%

There will be significant variations around the average special divvy but those prospective gross yields gives you an idea of what's potentially achievable based on the last 10 year average utilization of extreme event provision.  Will future utilization of this reserve be higher than the average of the last 10 years, that's the unknown but I think its fair to say that's the obvious risk that presents.  That said, there was some extreme level claims in the summer of 2023 that's already included in that 10 year average utilization so its anyone's guess.

Backward looking metrics don't help much in predicting how much worse - and how often - future adverse weather events are going to be. The market isn't generally very good at pricing risk but maybe it's got it about right with TWR.

Change at the helm

https://www.nzx.com/announcements/467722

Michael Stiassny retires, Naomi Ballantyne elected as Chair

Quote from: winner (n) on Feb 18, 2026, 02:14 PMShare price rocket ahead now the 'Staissny Drag' is departing

Michael Staissny told us at the meeting, he will be back next year but will be sitting with the shareholders.  :)   

Contributions from Westpac and Kiwibank partnerships commence 1 July 2026 however the Trade Me partnership renegotiation later this year presents some risk. Will be interesting in how bad the claims will be from the latest weather events.

Yesterday at the get-together I had a good chat with a fellow investor who also holds quite a lot of Tower.
Consensus is those yields I talked about in posts #627 and #629 are truly outstanding but you need to keep in mind that there's the ever present risk of a true black swan event so that gives this investment a special characteristic and risk.  We agreed that Tower requires careful consideration as to the level of risk one is prepared to take. For what its worth Tower is an 11% allocation in my portfolio.  That's right at the top end of risk I'm prepared to take and reflects that truly outstanding prospective yield.  Risk and potential reward usually go together, but that's not always the case.

It's 17% of my portfolio and I've cut that from over 25% in the past few months. It has been a great run but I agree it's prudent to trim given the risk of a one-off event destroying years of good work at an operational level.

When 911 hit the only share I sold was TWR.
However the insurance companies have gone from unlimited liability to "very limited" liability.[ie risk underwritten]
They are a bit like "born again Christians" ie after a bad year everyone accepts insurance companies will raise premiums.
Tower is being ultra careful on what ,where, and how they will insurance.
Yes looking for growth,however only profitable policies .

Quote from: Basil on Mar 02, 2026, 05:50 PMYesterday at the get-together I had a good chat with a fellow investor who also holds quite a lot of Tower.
Consensus is those yields I talked about in posts #627 and #629 are truly outstanding but you need to keep in mind that there's the ever present risk of a true black swan event so that gives this investment a special characteristic and risk.  We agreed that Tower requires careful consideration as to the level of risk one is prepared to take. For what its worth Tower is an 11% allocation in my portfolio.  That's right at the top end of risk I'm prepared to take and reflects that truly outstanding prospective yield.  Risk and potential reward usually go together, but that's not always the case.

As HLG gets  attention and hits an all time high, it's perhaps timely to compare TWR SP 5yr performance with HLG..... for interest I  also threw in the old IFT yardstick.

Results need to be adjusted for divvies. No doubt HLG doing well,  and so is TWR. IFT looking underpriced at present levels.

New ceo selling. Not a good look

https://www.nzx.com/announcements/468523

These shares were issued in late January 2026 for no consideration under a long term incentive plan.  Paul has sold approximately 39% of the shares issued which will presumably be the cash tax cost he faces on this issue.  So provided Paul doesn't sell down further shares, then it appears to me to be an entirely reasonable step.

Quote from: Southern Lad on Mar 03, 2026, 10:32 AMThese shares were issued in late January 2026 for no consideration under a long term incentive plan.  Paul has sold approximately 39% of the shares issued which will presumably be the cash tax cost he faces on this issue.  So provided Paul doesn't sell down further shares, then it appears to me to be an entirely reasonable step.

OR a new deck...........

Crikey, I recall being ridiculed when I first posted that one of the reasons I invested in TWR was to use the dividends to cover my annual insurance premiums.

I've been retired over 10 yrs now and am v happy that divvies from TWR shares have more than protected me from the following scenarios...( and the tax free cap gains provide another bonus.)

https://www.abc.net.au/news/2026-03-23/rising-insurance-costs-risk-turning-retirements-into-a-prison/106368730

Quote from: Left Field on Mar 23, 2026, 09:59 AMCrikey, I recall being ridiculed when I first posted that one of the reasons I invested in TWR was to use the dividends to cover my annual insurance premiums.

I've been retired over 10 yrs now and am v happy that divvies from TWR shares have more than protected me from the following scenarios...( and the tax free cap gains provide another bonus.)

https://www.abc.net.au/news/2026-03-23/rising-insurance-costs-risk-turning-retirements-into-a-prison/106368730

I was actually thinking the same thing when I made my investment in Tower.

Well my TWR certainly covers insurances, GNE covers  power,SEK covers fruit, veggies ,wheetbix etc,and 2CC  covers my vehicle expenses...lol
 

Tower showing some good strength of late.   Those dividends are so delicious. 

Quote from: Dolcile on Apr 07, 2026, 05:42 PMTower showing some good strength of late.   Those dividends are so delicious. 

Nice to see TWR SP climbing again after recent cyclone fears.

Happy holder.

A reminder of how the recent Cyclone event is BAU for TWR and why I remain a holder.

I live in a coastal village, my house is on a hill 100 metres above the beachside township and is insured with TWR.

Last week, a friend sought to insure a property on the town's main street some 200 metres from the beach. The property's LIM report notes it is located in possible EQ liquification and potential sea level rise flood zones.

In responding to his request for house insurance and after entering the property's address,  the TWR web site quickly informed them: "We're sorry...the details you've given mean that we're currently unable to offer you cover."

Address specific risk measurement is also a fabulous tool to use when looking to buy a property.  If Tower won't cover it, there's almost certainly a very good reason not to buy it.  Just go online with Tower and enter the property address and bingo, Tower says you should keep it on your watchlist or delete it.  Very handy.  Disc: Happy Tower holder.

Quote from: Left Field on Apr 17, 2026, 12:46 PMA reminder of how the recent Cyclone event is BAU for TWR and why I remain a holder.

I live in a coastal village, my house is on a hill 100 metres above the beachside township and is insured with TWR.

Last week, a friend sought to insure a property on the town's main street some 200 metres from the beach. The property's LIM report notes it is located in possible EQ liquification and potential sea level rise flood zones.

In responding to his request for house insurance and after entering the property's address,  the TWR web site quickly informed them: "We're sorry...the details you've given mean that we're currently unable to offer you cover."

We also have a holiday home in Coastal town that Tower won't cover. We have never had any issues or made a claim. Others I contacted do Insure our property including Initio.

https://initio.co.nz/?gad_source=1&gad_campaignid=964517484&gclid=Cj0KCQjwkYLPBhC3ARIsAIyHi3SiG-UJSCMiTVhBu570hseqrjOYgljkv1UWjjwM_g21XaL7uGy8FFYaAgR2EALw_wcB

I've just insured a post quake house in north Canterbury with tower. 30% higher premium than a bigger more expensive property I had in Hamilton. But still cheaper than the competition by give or take 10%.

Interesting to compare Tower with other health insureres in the recent consumer survey. According to the article:

"It's parent company, Tower, performed poorly though, coming last for contents insurance, and towards the bottom of the pack for house insurance."

More info (as well about the better performers - no, not Tower) - and table under

https://www.consumer.org.nz/articles/best-and-worst-insurance-providers 

 (paywalled - but I guess the annual subscription for the Consumer is well worthwhile).


.. and by the way - in the various examples is Tower not even in the lower premium range - dear and unloved!

So - absolutely, if you want to get an unloved insurance ... by all way - include Tower. Just make sure, that you never need them!

If you might however need an  insurance from time to time, it might be worthwhile to consider one of the (often cheaper) competitors with a higher customer satisfaction rating.

From the Consumer page PeterH made this comment - need to pay to see what the reply was -

I am curious. How do you reconcile the fact Canstar rate Tower very highly yet Consumer rate it in the lower half of their ratings?

Quote from: winner (n) on Apr 18, 2026, 12:13 PMFrom the Consumer page PeterH made this comment - need to pay to see what the reply was -

I am curious. How do you reconcile the fact Canstar rate Tower very highly yet Consumer rate it in the lower half of their ratings?

Well, Consumer is easy - they do an annual survey, and the result is basically whatever with Tower inured members picked. Not that good, isn't it?

No idea what Canstar is and what they do. If its any relevant, than maybe one should ask them.

Edit: Actually, I did a quick check on Canstar:

Canstar is a privately owned "comparison site" which mainly reviews the companies who pay them and, if they feel according to whatever judgement, that the companies which pay them deserve a good judgement, they allow these compnaies to pay them a bit more to use the top rating they they gave them. Clearly - no problems with conflict of interests or similar.

https://www.canstar.co.nz/about-canstar/

So - clearly - Tower pays Canstar for using this amazing rating which Canstar gave them for one reason or another.

I suppose its a bit like Tinas ads in the TV. If you pay, you can send your ads ... and if you don't pay, than you can't.

Claims must be through the roof with an increase in weather events
New Zealand experienced a record-high 46 severe storms between autumn 2025 and summer 2026, marking a significant increase in severe weather. Data shows a near-weekly occurrence of storms, with a 256% increase in storm-related claims to 33,174, highlighting a surge in frequency and intensity.

A storm every 8 days last year.

Comparing an unusually wet period with an unusually dry period is something I believe IAG have done for dramatic effect, perhaps softening up the market for price increases.

Tower have done a great job with their risk based pricing which positions them well to handle the variable weather conditions.

I think we've likely now seen the back of the cyclone season and I still think there will be some surplus from their $45m extreme event reserve to be paid out as a special dividend at year end.

The recent Wellington event wasn't a cyclone - it was flash flooding due to torrential rain. We're just entering the rainy season so expect more of these events in the coming months.

NZ's combination of coastal towns, low lying rural areas and hilly cities makes us particularly vulnerable to climate change and our chronic underinvestment in storm water drains, stop-banks etc is all coming back at us.

One things for sure - there's going to be a lot more of these events, many of which will have material effect on Towers bottom line. Under full disclosure rules I suspect we'll be hearing from Tower a lot more in the future.

Maybe so but in the network news last night on this topic it contained the data (from memory it was from the Insurance council or some such body) that total premiums paid in N.Z. were just over $10 Billion and total payouts from insurance companies was just under $5 Billion last year so its still a very lucrative industry and of course they can adjust premiums further in future years to account for the effects of future climate change. 

Frankly IAG under its various brands, https://en.wikipedia.org/wiki/IAG_New_Zealand dominate the industry in New Zealand and have by some accounts nearly an 80% market share.  If Tower as a Kiwi owned company wasn't keeping them honest with competition on their premiums, the Australian dominant company would be price gouging Kiwi's like there was no tomorrow.  For this reason alone I am very pleased to be a Tower customer and shareholder but I still believe that in an average weather year in the 2020's for Tower, the metrics at around $2 make it a compelling investment. 

I read an article yesterday on weather and downpours in Wellington. Nothing has changed,  it's the same weather Wellington has always had since anyone kept a record. 

We have gotten better at assessing risk. That's good.

There are some good stories around earthquakes in Canterbury from early settlers if you look.

I asked copilot if the weather in Wellington has changed over time.  Here is the response:

Here's a clear, evidence‑based summary of how Wellington's weather has changed over time, drawing on long‑running observations and recent assessments from NIWA, Stats NZ, and local councils.

1. Temperature: steadily warming

Wellington has warmed by about 1°C since the early 1900s, consistent with national trends measured in NIWA's long‑running temperature records. [niwa.co.nz], [sciencemed...ntre.co.nz]
Warm days are becoming more common, while frosts are less frequent. Recent NIWA modelling shows more days above 25 °C already being observed compared with mid‑20th‑century conditions. [niwa.co.nz]
Most of New Zealand's warmest years on record have occurred since 2013, reflecting an ongoing warming trend that also affects Wellington. [sciencemed...ntre.co.nz]

What this means locally: warmer summers, milder winters, and increased heat stress during summer heatwaves.

2. Rainfall: more variability and heavier downpours

Total annual rainfall in Wellington has not changed dramatically, but how rain falls has changed—with more intense short‑duration rainfall events. [wellington.govt.nz], [gw.govt.nz]
Heavy rainfall events are becoming more extreme, increasing flooding risk, especially in urban catchments and low‑lying areas. [wellington.govt.nz]
At the same time, longer dry spells are being observed between rain events, affecting water supply reliability. [gw.govt.nz]


3. Wind: still windy, but trends are mixed

Wellington remains New Zealand's windiest major city, but national data show no uniform increase in extreme wind gusts across all sites. [stats.govt.nz]
Some exposed locations show small increases in extreme gusts, while others show decreases, meaning year‑to‑year variability still dominates over long‑term trends. [stats.govt.nz]


4. Extreme weather: becoming more disruptive

Extreme rainfall, heatwaves, and coastal flooding events are becoming more disruptive, even if they are not happening every year. [wellington.govt.nz]
Recent regional assessments identify compound risks—for example, heavy rain combined with high tides causing surface flooding in Wellington's CBD and transport corridors. [gw.govt.nz]


5. Sea level rise: a major change factor for weather impacts

Sea levels around Wellington have risen by around 20–25 cm since the late 1800s, based on tide gauge records. [sealevel.nz]
Even small increases in sea level mean that storm surges now cause flooding more easily than in the past. [wellington.govt.nz]
Wellington City Council notes that flooding once described as "1‑in‑100‑year events" is now occurring far more frequently. [wellington.govt.nz]


6. Big picture: what's changed overall?
Compared to earlier generations, Wellington's weather today is characterised by:

Warmer average temperatures
More intense rain events
Longer dry spells between rains
Higher coastal flood risk due to sea‑level rise
Greater disruption from extremes rather than changes in day‑to‑day weather

These changes align closely with scientific expectations for a warming climate and are well‑documented in both national and regional assessments. [niwa.co.nz], [wellington.govt.nz], [gw.govt.nz]

Now ask Copilot how much insurance premiums have increased since the early 1900's.

Insurance is merely a process of averaging risk with others, and as risk rises so do premiums.

I don't think there's any debate that climate change is already here. It seems counter-intuitive to me to say that insurance companies are a good investment against a backdrop of incresingly frequent and violent weather systems. Not to mention the increasing chances of another fault line breaking (the Alpine fault line is overdue).
Tower have been below average dividend payers for the last twenty years and I reckon this golden period isn't about to last. Probably worth a punt at below $2 but I wouldn't put my house on them ;)

No argument from me that climate change risks are increasing but the facts according to Tower are they have used an average of $15m per annum of their extreme event provision over the last 10 years and they are providing $45 per annum at present.  On the law of averages they are over provisioning by $30m per annum.

Additionally premiums have risen quite a lot in the last 5 years and they have also considerably de-risked their business over that timeframe.

Insurance companies are not everyone's cup of tea, I  understand that. Each to their own.
I posted about the extremely attractive prospective gross yield a while back. That's why I'm holding.

Don'

Quote from: Basil on Apr 22, 2026, 01:21 PMNow ask Copilot how much insurance premiums have increased since the early 1900's.

Insurance is merely a process of averaging risk with others, and as risk rises so do premiums.

No need to ask copilot I have several years of insurance premium increases from Tower to refer to.
 
Tower has done a great job of de risking their business no argument there. 
 
I wonder if they have lost much in the way of business on top of high risk property - will people move their car and boat insurance to an insurer that will insure their house - if they have a house deemed uninsurable by Tower.