Highlights

  • Tower offers an 11.62% trailing dividend yield based on ordinary dividends.
  • The company follows a dividend policy linked to adjusted earnings.
  • FY25 delivered record underlying profit and higher shareholder distributions.
  • Weather-related claims influenced the FY26 interim dividend.
  • Insurance claims and underwriting performance remain key factors for future payouts.

Tower Limited (ASX:TWR) reported a trailing dividend yield of 11.62% as at 20 July 2026, based on an ASX share price of AUD 1.56 and ordinary dividends paid over the previous 12 months. The reported yield reflects regular shareholder distributions rather than special dividends or capital returns. As a New Zealand-based general insurer, Tower generates earnings from home, contents and motor insurance, with future dividend payments closely linked to underwriting performance, claims experience and profitability.

Dividend profile

The trailing dividend comprises the FY25 final dividend and the FY26 interim dividend, producing a reported trailing yield of 11.62%.

Tower's dividends do not carry Australian franking credits because the company is incorporated in New Zealand. Instead, dividends include New Zealand imputation credits, which primarily benefit New Zealand taxpayers. The company follows a dividend policy targeting a proportion of adjusted earnings, allowing shareholder returns to move in line with business performance.

Financial performance

Tower delivered record underlying profit during FY25, supported by favourable underwriting conditions and relatively low weather-related claims. This stronger performance contributed to higher ordinary dividends during the year.

During the first half of FY26, however, weather-related claims increased, reducing profitability compared with the previous corresponding period. Management also provided lower earnings guidance for FY26, reflecting a more challenging operating environment.

Business overview

Tower Limited is a general insurance provider serving customers across New Zealand and selected Pacific markets. The company provides home, contents and motor insurance while continuing to invest in digital services, pricing capabilities and customer experience.

Its earnings are influenced by premium growth, underwriting margins, investment returns and the frequency of weather-related insurance claims.

Factors supporting future dividends

Tower continues to maintain a dividend framework linked to adjusted earnings while operating with capital levels above its internal solvency targets. Ongoing underwriting discipline and risk-based pricing may continue supporting operating performance.

The company also continues investing in digital capabilities and customer service improvements, which may contribute to long-term operational efficiency and business growth.

Risks to monitor

Insurance claims remain the largest factor influencing future profitability. Significant weather events, natural catastrophes or higher-than-expected claims costs could reduce earnings and affect future dividend payments.

The company also faces competitive pressures within the insurance market, while changes in premium growth, operating costs and claims trends may influence future financial performance.

Conclusion

Tower's 11.62% trailing dividend yield reflects ordinary shareholder distributions supported by a strong FY25 financial performance rather than one-off capital management initiatives. However, higher weather-related claims during FY26 demonstrate that insurance earnings can fluctuate between reporting periods. Investors may continue monitoring underwriting performance, claims experience, solvency, earnings and future dividend announcements when assessing Tower's long-term income profile.