TWR - Tower Insurance

[BlackPeter]

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.

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.

[Basil]

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

[Shareguy]

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/

[Shareguy]

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.

[Dolcile]

I found myself wondering this morning whether I should draw down on our unused revolving credit facility, to buy more TWR!

[alkebab]

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

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.

[Basil]

I 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.

[Basil]

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.

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.

[Left Field]

I 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.

[BlackPeter]

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

Tried it. They say its too complicated for their software. Apparantly I need to call their service desk. Hmm ...

[Dolcile]

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.

Great minds   

Tower definitely leans itself to a core part of the income portfolio I'm looking to build. 

[Plata]

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.

[lorraina]

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..

[Dolcile]

That is a gross dividend of 8.49%,avaliable in just 2 months..

Even better,  I think that is a net yield !

[lorraina]

   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.