TWR - Tower Insurance

[raW tent Buffer]

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.

[Left Field]

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.

[Dolcile]

Seems like the big seller has disappeared - sell depth really thin.

[Poet]

Positive paywalled article in Business Desk this morning too.

[Basil]

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.

[Basil]

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

[Stockgathering]

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

Thanks for the article, interesting.

[Basil]

Thanks 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.

[Umpah]

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

[Left Field]

It 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.

[LoungeLizard]

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.

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.

[Basil]

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. 

[Dolcile]

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

A 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.

[Left Field]

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

"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.

[HAWKDOG]

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.