TWR - Tower Insurance

[Basil]

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

I also did the same.

[Sideshow Bob]

Old saying add to your winners,sell your losers.

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

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

[Basil]

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 !

[Left Field]

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.

[Shareguy]

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.

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

[Left Field]

Yes 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.

[Shareguy]

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

[Basil]

With 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.

[Poet]

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)

[KW]

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.

See Momentum thread for a discussion on this. 

[Left Field]

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).

[Shareguy]

Great news. Have been adding the last few days.

[Shareguy]

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

[BlackPeter]

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).

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 ...

[Left Field]

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 ...

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.