Highlights

  • Tower Limited (ASX:TWR) declared a fully imputed NZD 0.05-per-share interim dividend in May 2026.
  • FY26 underlying NPAT guidance was raised to NZD 69mn–79mn in October.
  • Customer numbers increased 8% over FY26 to approximately 345,000.
  • Tower renewed FY27 catastrophe reinsurance cover with a NZD 970mn upper limit.

Tower Limited (ASX:TWR) provides general insurance across New Zealand and Pacific markets, including home, motor, boat and commercial cover. Its dividend disclosures remained relevant on 26 October 2026 following the fully imputed NZD 0.05-per-share interim dividend declared earlier in the year. More recently, the insurer lifted its FY26 underlying profit guidance after assessing large-event claims costs and reported continued growth in customer numbers, while its full-year results were scheduled for late November.

Company Business

Tower Limited (ASX:TWR) underwrites personal and commercial insurance, with New Zealand its principal market and additional operations in the Pacific. Its core products include home, contents, motor, boat and business insurance. Premium pricing, claims management, reinsurance protection and operating expenses are central to the economics of the business. The insurer has also expanded distribution through partnerships and digital channels, while applying more granular risk-based pricing to property exposures.

Premium growth is influenced by policy volumes and average premiums. Weather-related damage can materially affect claims costs in individual reporting periods, making the catastrophe reinsurance programme an important part of financial management. Tower Limited (ASX:TWR) has continued to invest in technology and customer experience while managing expense ratios and remediation obligations.

Recent Developments

In its 6 October 2026 market update, Tower Limited (ASX:TWR) lifted FY26 underlying net profit after tax (NPAT) guidance to NZD 69mn–79mn, from NZD 55mn–65mn. The company attributed the change to the partial utilisation of its NZD 45mn large-event allowance. Large-event claim costs were approximately NZD 25mn, leaving around NZD 20mn unused; after tax, this lifted expected underlying NPAT by approximately NZD 14mn.

The same update indicated that customer numbers had increased by 8% over FY26 to approximately 345,000, primarily reflecting New Zealand home insurance growth and partnership distribution. Gross written premium (GWP) increased 3%, consistent with the company’s low-single-digit guidance. Management also identified pricing competition, customer affordability and risk-based underwriting as important operating considerations.

Separately, Tower completed its FY27 reinsurance renewal in September. The catastrophe upper limit rose to NZD 970mn from NZD 915mn for FY26, and the third catastrophe limit increased to NZD 100mn from NZD 85mn. Catastrophe event excesses remained at NZD 20mn. Tower estimated reinsurance premiums at 9.5% of FY27 GWP, compared with 10.6% in FY26.

Financial Performance and Dividend Position

For H1FY26, Tower Limited (ASX:TWR) reported underlying NPAT of NZD 36.8mn, compared with NZD 61.7mn in H1FY25. Reported profit was NZD 22.9mn against NZD 49.7mn, while GWP was NZD 301mn, up 1% YoY. The business-as-usual claims ratio increased to 44% from 38%, and the management expense ratio rose to 31% from 30%. Large-event costs were NZD 18.5mn against NZD 3mn in the corresponding period.

The board declared a fully imputed interim dividend of NZD 0.05 per share in May 2026. Dividend imputation reflects the New Zealand tax-credit arrangements applying to that declared distribution. The dividend remains a relevant element of Tower’s capital allocation alongside regulatory solvency requirements, claims obligations and reinvestment in operations.

Although October guidance raised expected underlying earnings, the company stated that reported profit would continue to reflect non-underlying costs, including further customer remediation expenses in H2FY26. The relationship between reported profit, underlying earnings, insurance capital and distributions will therefore remain important in assessing the full-year financial statements.

Risks to Consider

Insurance earnings remain exposed to severe weather events, changes in claim frequency and severity, repair-cost inflation and reinsurance pricing. Competitive insurance premiums may also constrain GWP growth despite increasing customer numbers. Tower Limited (ASX:TWR) faces costs and execution requirements associated with its customer remediation programme, technology investment and changes in product pricing. Variations between underlying and reported profit may arise from these items.

What to Watch Next

Tower scheduled its FY26 results announcement for 26 November 2026. The release is expected to provide audited financial performance, claims experience, solvency measures and any subsequent dividend decision. Other relevant items include the progress of customer remediation, premium growth in home insurance, management expense trends and the effect of the renewed FY27 reinsurance arrangements.

Key Insights

Tower Limited (ASX:TWR) entered its FY26 results period with increased customer numbers, 3% GWP growth and upgraded underlying NPAT guidance. The insurer’s NZD 0.05 interim dividend and fully imputed status form part of its 2026 distribution record. Full-year reported earnings, catastrophe claims, remediation expenditure and capital measures will provide additional context when the annual results become available.