TWR - Tower Insurance

[lorraina]

I had not thought about my Tower divies covering my insurance costs,but I think they will.The bonus could be increasing divies from GFL Geneva Finance [owners of Quest Insurance].
My power company's divies cover our power usage.
My 2CC's divies more than cover my motoring costs.
Pity I can not buy shares in our local New World supermarket.lol.

[Basil]

WOW - can you believe it, you can and that's the ticker code.  Just need to shop at Woolworths instead 

[lorraina]

Yes agree,even get Gold Card 5% discount on a Tuesday there ,but our local New World is a lot cheaper than the nearest Woolworths.Only a small thing but Woolworths only stock big bananas.I like the smaller snack pack ones at New World.  [NW also stock big bananas].

[Basil]

Forgot to ask Matt Peek at Kingfish if Tower is on their radar...another company we invest in starting with T is , you know the one Meeting up with management next month and made it clear he's impressed with management and their track record.

Fabulous upgrade today from Tower.

[lorraina]

A lot to like about the other T.
Credit cycle should now see their NIM start to gain traction.
When it happens I look forward to seeing their new Christchurch site.
If it/they are anything like their Timaru one they will crackers.
 

[BlackPeter]

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.

Absolutely. You should try it!

Just wanted to point out there is always a flipside to outrageous earnings ... well, at least for the poor people who have to pay for them.

I used to regularly review various insurance providers (every couple of years when the renewal was due) and didn't exclude Tower yet in these exercises. Inputs are however not just the premiums (for our specific property and needs), but as well consumer reports as well as historic company performance and communication. Interesting that Tower had after the ChCh earthquakes the largest number of Court proceedings of any insurance company, i.e. they fought as hard as they could against as many clients as they could to avoid settlement. One of their black marks. Not that I remember their premiums ever being competitive, but why would anybody pay an insurer if they know that in case of a claim they likely have to push it through the courts anyway?

I am sure some clients like insurers like that (hey, litigation can be fun ... isn't it?, but I prefer to work with insurers who care for their customers.

Maybe they are not as clear a winner as you might want to think? But sure - enjoy your dividends as long as they last.

Your comment on their dividends paying your premiums leaves me speechless. I normally pick investments based on quality (which clearly includes as well sustainable earnings potential). However - whether the earnings come from the same industry as the bills - who cares? But hey - each to their own ;

[BlackPeter]

Ah, yes - and related to comparing Tower with their competitors - You don't need to take my word for it:

Consumer NZ is regularly comparing insurance companies. In Feb 2024 they compared 8 house and content insurance packages and for their example is Tower one of the insurers with one of the highest premiums combined with one of the lowest customer satisfaction ratings.

https://www.consumer.org.nz/services/house-and-contents-insurance/review
(probably paywalled if you are not a member, but membership is a great investment anyway)

So, yes, I can see where Towers earnings might come from ... I am just wondering how sustainable they are.

[TGB]

BP, I know I'm only one person but that's definitely why I'll never invest in Tower and why I'll never take policies with them either.

[Basil]

The huge flood in Auckland a couple of summers ago. Once Tower got a chance to get their assessors, (they were literally swamped with claims) to look at my wife's car they wrote it off and paid out very quickly.

TWR almost certain to be included in the NZX50 soon. Agree it's a cyclical business but the metrics are dirt cheap in line with that. I reckon the brokers are about right and fair value is about $1.50

[Left Field]

Percy posted this link on the other channel.

IMO a very interesting and timely interview explaining why Suncorp sold its Banking division and opted to concentrate on Insurance.

https://www.youtube.com/watch?v=fAfms-gDIVI

ps. Also v relevant in respect of today's news re the NZ banking sector.

https://www.stuff.co.nz/business/350384870/commerce-commission-report-nicola-willis-adamant-she-wants-action-banking-sector

[LoungeLizard]

Percy posted this link on the other channel.

IMO a very interesting and timely interview explaining why Suncorp sold its Banking division and opted to concentrate on Insurance.

https://www.youtube.com/watch?v=fAfms-gDIVI

ps. Also v relevant in respect of today's news re the NZ banking sector.

https://www.stuff.co.nz/business/350384870/commerce-commission-report-nicola-willis-adamant-she-wants-action-banking-sector

Yep, interesting stuff. TWR is certainly in the sweet spot at the moment - industry wide higher-than- inflation premium increases, unused large events provision and the prospect of NZX50 inclusion in December. All going well we might see $1.50 by year end.

[lorraina]

Forbar's thoughts today;

Index Enter Exit Expected Weight (rank)
S&P/NZX 10 no changes expected n/a
S&P/NZX 20 no changes expected n/a
S&P/NZX 50 NPH & TWR SAN & VSL 0.17% (49) & 0.27% (44)
S&P/NZX 50 Portfolio NPH & TWR SAN & VSL 0.27% (49) & 0.43% (43)

[Shareguy]

Forbar's thoughts today;

Index Enter Exit Expected Weight (rank)
S&P/NZX 10 no changes expected n/a
S&P/NZX 20 no changes expected n/a
S&P/NZX 50 NPH & TWR SAN & VSL 0.17% (49) & 0.27% (44)
S&P/NZX 50 Portfolio NPH & TWR SAN & VSL 0.27% (49) & 0.43% (43)

FB say we expect passive demand for NPH and TWR will be in the order of 2.7m shares (45x average daily volume [ADV]) and 9.1m (26x ADV) respectivel

That's a lot of shares to buy.

[Basil]

The problem is that their index constituent changes are both predicated upon liquidity concerns around the companies they think will exit the index and I can't help observe they got their most recent prediction based on liquidity concerns wrong.  The best guide to the future is the most recent past so there's a better than even chance they will be wrong again in my opinion

That said, TWR looks to be the clear favorite for index inclusion when ARV exit due to their takeover so it's just a question of when.

Also their metrics and the TA make a good case for holding so how many, if any to sell on index inclusion is another good question to ponder.

[Shareguy]

The problem is that their index constituent changes are both predicated upon liquidity concerns around the companies they think will exit the index and I can't help observe they got their most recent prediction based on liquidity concerns wrong.  The best guide to the future is the most recent past so there's a better than even chance they will be wrong again in my opinion

That said, TWR looks to be the clear favorite for index inclusion when ARV exit due to their takeover so it's just a question of when.

Also their metrics and the TA make a good case for holding so how many, if any to sell on index inclusion is another good question to ponder.

Yes Craig's have eps of $.17 for this year. That report from Craig's was before the latest upgrade. Attractive metrics, then you have the index inclusion. Can you recall how much index inclusion added to Turners?