TWR - Tower Insurance

[Left Field]

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.

Maybe a better option than PHL?

[HAWKDOG]

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.

[Ferg]

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.

[HAWKDOG]

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.......

[Basil]

huge 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.

[ken]

https://www.rnz.co.nz/news/business/569861/iag-s-insurance-profit-rises-as-claims-costs-fall

[Basil]

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.

[Basil]

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.

[lorraina]

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.

[winner (n)]

Do you have to go through the Getba Quote process to find out if one can be covered?

[Turkey]

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

[HAWKDOG]

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!

[SCOTTY]

As a Tower shareholder, good to know my capital is safe

[Basil]

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

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.

[Turkey]

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