TWR - Tower Insurance.

[Schrodinger]

Why would Rand Merchant be selling their NZ operations? Could be poor asset quality with limited margins.

[trader_jackson]

Why would Rand Merchant be selling their NZ operations? Could be poor asset quality with limited margins.

They probably haven't had the growth they thought so are moving out of NZ... been in the country 5 years and, despite being very aggressive (too aggressive some say) have only managed $26m GWP... should compliment Tower very well, lots of synergies etc.

[Schrodinger]

According to their statements they lost market share $26M 2018 to $24.5M in 2019 (premium).

[Sideshow Bob]

Why would Rand Merchant be selling their NZ operations? Could be poor asset quality with limited margins.

My only experience with Youi was a quote which took at least half an hour of questions, and turned out significantly more expensive than elsewhere. Then was contacted a number of times afterwards. Never again.....

[Dassets]

The capital raise has virtually nothing to do with the acquisition. The EQC receivable is now in question and is assumed to be subject to litigation. The capital raise is to shore up solvency
Ratio.

[hogie]

My only experience with Youi was a quote which took at least half an hour of questions, and turned out significantly more expensive than elsewhere. Then was contacted a number of times afterwards. Never again.....

Exactly the same experience here ... what a waste of my life.

Tower however is a much simpler process and much better pricing (unless you're in Christchurch / Wellington).

I might pick up some more of these at this price

[Independent Observer AUNZ]

The capital raise has virtually nothing to do with the acquisition. The EQC receivable is now in question and is assumed to be subject to litigation. The capital raise is to shore up solvency
Ratio.

Correct - that's the really interesting thing here. The RBNZ has obviously grown a pair and said "we won't approve the Youi deal unless you change how you look at the EQC disputed receivable asset from a capital perspective." Clever and probably very frustrating for the Tower Board. This could be taken one of two ways for shareholders; the likelihood for collection of the asset is perceived to have reduced (possible but not likely), and/but, the future collection of this asset from the EQC in whatever form (whether its 1% or 100%+ of the original assumption) will result in a substantial profit and dividend for shareholders to enjoy down the track if and when it materialises.

[Independent Observer AUNZ]

No, they are all the dissatisfied AMI customers winner

No dividend this year will annoy some, but great growth in profits and GWP... and rock solid balance sheet.

Read again re: balance sheet and the purpose of the capital raise re: EQC receivable.

You're probably not wrong re: Youi's market share. I'd say they compete most closely with the TradeMe Insurance brand (administered by Tower) for the low-cost offering in the market, be interesting to see what product Tower move the Youi policyholders on to at renewal assuming the deal goes through.

[Scrunch]

I guess on the upside, if (when?) the ACC receivable is received it won't be needed for regulatory capital requirements. It could therefore be distributed back to shareholders, potentially through a share buyback aka what Fletcher are doing now following their earlier capital raise. Alternatively strong organic growth won't need additional capital for quite a while.

[Poet]

https://www.newsroom.co.nz/@business...-reimbursement