TWR - Tower Insurance.

[ronaldson]

I have just received a message from Tower for my car insurance. I have never made a claim in my life and the annual premium is 50% higher than last year.

Likely due to rises in theft numbers, and the significant increase in flood damaged vehicles (I can't help thinking that with respect to the latter in many instances there is an element of owner negligence). But you aren't on your own - I have my motor vehicle comprehensively insured with Tower, and my premium based upon an unchanged insured value at $14k has gone from $1087 (gst incl) last year to $1468 - so about 40% really.

But Moneyhub and other websites almost always recommend including TWR in a comparison check, and most have it in the top two for value taking all factors into account. But premiums can vary significantly depending upon where you live, age, claims history and so on. And inflation has had an impact on cost of parts and repairs. I include glass cover, and three times in the last four years I have had bad stone chips to the windscreen remediated so don't complain.

MV insurance is claims based, plus a margin, and is a competitive marketplace. So you need to be both administratively and operationally efficient, and customer focused. My experience with TWR is that they do their part rather well.

[ronaldson]

Reinsurance for FY24 has been placed, albeit with higher excess ($16.9m up from $11.9m) if triggered. But the catastrophe upper limit has been decreased to $750m from $934m due to the EQC cap increase from $150k to $300k now being fully effective on policies written and "on the books", so risk reduced accordingly. But good to have the overall placement confirmed.

FY23 completes on 30 September, so a fresh start from 1 October and cross fingers for a better claims experience going forward. I wonder what allowance for large events will be built into the FY24 projection? And a lot of claims handling costs attributable to events in FY23 will be carried forward into the new financial year.

We already know the FY23 results when announced in November will not be flash, and I would expect no final dividend will be declared, but we can hope for an improved experience in FY24 barring one or more major events. Climate change has proved a wrecking ball recently, and reasonably strong earthquakes seem to occur with regularity somewhere or other in the country so a rather fraught lottery methinks.

[winner69]

PROFIT UPGRADE

http://nzx-prod-s7fsd7f98s.s3-websit...983/405142.pdf

[ronaldson]

Just shows what an absence of "large events" weighing on the result can have. A "good" year in that context can improve profitability disproportionally.

And even allowing for the impact of premium adjustments for inflation, and adverse claims ratio experience, a rise in Gross Written Premiums for the year of 17% seems to me to be growth on steroids despite a highly competitive marketplace, and points to a strong future. This company has a "fit for purpose" digital platform that is starting to take it places!

But no surprise that provisioning for the remediation of failures in applying discounts to those who were/are multiple policy holders has to be increased. The scale of the issue and the administration costs involved were always going to exceed an initial assessment.

As quite a sizeable holder under various accounts I have an optimistic view here. FY24 could/should tell the tale.

[Lego_Man]

Just shows what an absence of "large events" weighing on the result can have. A "good" year in that context can improve profitability disproportionally.

And even allowing for the impact of premium adjustments for inflation, and adverse claims ratio experience, a rise in Gross Written Premiums for the year of 17% seems to me to be growth on steroids despite a highly competitive marketplace, and points to a strong future. This company has a "fit for purpose" digital platform that is starting to take it places!

But no surprise that provisioning for the remediation of failures in applying discounts to those who were/are multiple policy holders has to be increased. The scale of the issue and the administration costs involved were always going to exceed an initial assessment.

As quite a sizeable holder under various accounts I have an optimistic view here. FY24 could/should tell the tale.

Market undercooking this news IMO - very muted reaction.

[winner69]

Market undercooking this news IMO - very muted reaction.

Tower are great weather forecasters ….better than meteorologists ….an optimistic Tower is a pretty reliable forecast for an impending big weather event / quake or whatever …wonder what’ll it will be and when

[ronaldson]

Market undercooking this news IMO - very muted reaction.

Correct. The market has since taken out the sell-side depth.

A re-rate is due here and it's more likely to be prompt than OCA!

[winner69]

Correct. The market has since taken out the sell-side depth.

A re-rate is due here and it's more likely to be prompt than OCA!

Hoping it’ll get back into the 70’s soon

[ronaldson]

Hoping it’ll get back into the 70’s soon

Yes, the pressure here is definitely on the upside.

Fairly confident that todays close at $0.65 will hold from here despite the cyclone currently hitting Vanuatu (best NZ based charity to support is the Butterfly Trust - 12-3233-0464934-50 which does terrific work in that country).

If the "large events" allowance for FY24 is retained at $50m then if unused it accrues directly to the bottom line at over $4m each and every month. Better than a lotto ticket and could even beat Powerball!

[Muse]

I cover my properties with state insurance.
Just had a round of rebuild valuations done for insurance purposes, couldn't believe it. The inflationary provision added to the spot rebuild cost added a nice big whack to my annual premiums. Though if there was one positive, my premiums certainly didn't rise proportionately to the increase in my insured position?