TWR - Tower Insurance

[BlackPeter]

I  hope we have fabulous summer weather ....

You mean - like yesterday?

[raW tent Buffer]

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

[Poet]

Can 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.

[raW tent Buffer]

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?

[LoungeLizard]

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?

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.



 

[Poet]

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.



 

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

[SCOTTY]

This way everyone gets the same ratio and proprietorship  remains unchanged

[Basil]

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/

[Poet]

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/

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

[Basil]

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

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

[BlackPeter]

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/

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

According to Dr. Google:

Tower 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.

[Basil]

Tower 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.

[winner (n)]

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

Seems 5.1 near Seddon

[Basil]

$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?

[snapiti]

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?

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