Tower Reports Growth and Efficiency in a Challenging Year

23 November 2023
Tower Limited
FY23 Full Year Results for Announcement to Market
In accordance with NZX Listing Rule 3.5.1 we enclose the following for release to the market
in relation to Tower Limited’s (NZX/ASX: TWR) FY23 Full Year Results:

1 Media Release
2 Results Announcement
3 Annual Report (including Financial Statements)
4 Results Announcement Presentation
5 Results Announcement Call Script

Tower’s Chairman Michael Stiassny, Chief Executive Officer Blair Turnbull and Chief Financial
Officer Paul Johnston will discuss the full year results at 10:00am New Zealand time today.
Tower’s Board confirms for the purposes of ASX Listing Rule 1.15.3 that Tower continues to
comply with the NZX Main Board Listing Rules.

ENDS

This announcement has been authorised by the Tower Board.

Blair Turnbull
Chief Executive Officer
Tower Limited

For media enquiries, please contact in the first instance:
Emily Davies
Head of Corporate Affairs and Sustainability
+64 21 815 149
emily.davies@tower.co.nz
Market Information
NZX Limited
Level 1, NZX Centre
11 Cable Street
Wellington
New Zealand
Company Announcements Office
ASX Limited
Exchange Centre
Level 6, 20 Bridge Street
Sydney NSW 2000
Australia

---

Level 5, 136 Fanshawe Street
Auckland 1142, New Zealand
ARBN 645 941 028
Incorporated in New Zealand



23 November 2023

Tower Reports Growth and Efficiency in a Challenging Year

Tower Limited (NZX/ASX: TWR) has today announced its full year results reporting improved
revenue growth and expense control, with profits impacted by catastrophic weather events. For the
year to 30 September 2023, the insurer recorded an underlying profit including large events of
$7.6m versus $27.3m in the 2022 financial year, and a reported loss of $1.2m versus an $18.9m
reported profit in FY22.

Summary of FY23:
• Gross written premium (GWP) $527m, up 17% on FY22
• Customer growth of 4% to 321,000
• Business as usual (BAU) claims ratio 55.5% vs 48.9% in FY22
• Management expense ratio (MER) improved to 32.2% vs 36% in FY22
• Large event costs $55.6m vs $19m in FY22
• Combined operating ratio including large events (COR) 101% vs 90.1% in FY22
• Underlying profit including large events costs $7.6m vs $27.3m in FY22
• Reported loss $1.2m vs $18.9m in FY22, includes strengthening of the residual
Canterbury earthquake and remediation provisions, partially offset by the sale of
Tower’s Papua New Guinea subsidiary and its building in Suva.
• Tower will not pay a full year dividend for FY23.

Tower CEO, Blair Turnbull says, “In the financial year Tower has navigated catastrophic weather
events, widespread inflation and increasing crime. At the same time, we are continuing to grow and
manage expenses while executing on our strategy.”

Large events claims mostly completed
Tower’s focus on efficient claims settlement has seen approximately 84% of claims for the Auckland
and Upper North Island weather event and Cyclone Gabrielle, and 88% of claims for Cyclones Judy
and Kevin in Vanuatu completed as of 20 November.

Targeted growth and efficiency
Strong rating actions combined with organic growth have seen GWP in New Zealand rise 19% year-
on-year.

Sales via Tower’s digital channels continue to strengthen, contributing 65% towards overall GWP
growth in FY23. The My Tower customer-facing digital sales and service platform is now
operational across all Tower markets.
Disciplined cost control and improved efficiencies through increasing scale saw overall MER further
improve to 32.2% versus 36% in FY22 as Tower’s simplification and digitisation strategy is realised.
Investments in digital technology are increasingly enabling Tower to move workflows to its
operational hub in Suva where its team of 250 staff are delivering lower telephony and service
costs.

Increasing inflation and a higher frequency of motor claims have contributed to an increase in the
BAU claims ratio to 55.5% compared to 48.9% in FY22. Tower is continuing to apply targeted rating
and underwriting actions to address these challenges.

Level 5, 136 Fanshawe Street
Auckland 1142, New Zealand
ARBN 645 941 028
Incorporated in New Zealand


Looking forward
The successful renewal of Tower’s reinsurance programme with $750m of catastrophe cover and
the purchase of a prepaid third event cover up to $75m will provide important protection from the
volatility of large events in FY24.

“In the year ahead, Tower will continue its focus on delivering targeted customer and premium
growth while further improving efficiencies and continuing to streamline the business.

“We will also build on our leading risk-based pricing by expanding our model to include landslide
and coastal hazards. 

“While we have certainly faced significant challenges this financial year, our underlying result
demonstrates resilience and strategic delivery which positions Tower well for long-term sustainable
growth and performance,” says Turnbull.

FY24 guidance
Tower’s FY24 full year guidance is for underlying NPAT to be between $22m and $27m. This
assumes full utilisation of a large events allowance which has conservatively been set at $45m.

GWP growth in FY24 is expected to be between 10% and 15% reflecting continued strong rating
actions and organic growth. Digitisation and efficiency initiatives are expected to improve MER to
between 30% and 32%.

Tower is forecasting a combined operating ratio of 95% to 97% in FY24.

Consideration will be given to restarting dividends in FY24 if it is prudent to do so.

ENDS

This announcement has been authorised by Blair Turnbull, Chief Executive Officer, Tower Limited.

For media enquiries, please contact in the first instance:
Emily Davies
Head of Corporate Affairs and Sustainability
+64 21 815 149
emily.davies@tower.co.nz

---

Template
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at June 2023

Please do not amend or delete individual rows. As this template relates to prescribed content, changes to content
should only be made where it is clearly indicated that this is permitted, otherwise, if an Issuer considers a particular
element does not apply, mark the row as N/A, Any other changes to this prescribed form must first be approved by
NZX as required under NZX Listing Rule 3.26.1.

Results for announcement to the market
Name of issuer Tower Limited
Reporting Period 12 months to September 2023
Previous Reporting Period 12 months to September 2022
Currency
Amount (000s) Percentage change
Revenue from continuing
operations
$700,990 62%
Total Revenue $725,215 61%
Net profit/(loss) from
continuing operations
$2,352 -87%
Total net profit/(loss) $(1,228) N/A
Interim/Final Dividend
Amount per Quoted Equity
Security
Tower Limited has not proposed to pay any dividends.
Imputed amount per Quoted
Equity Security
Not Applicable.
Record Date Not Applicable.
Dividend Payment Date Not Applicable.
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.49 $0.55
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Revenue from continuing operations includes $205m from
reinsurance and other recoveries as a result of recent
catastrophic weather events, along with $496m of premium
and other income.

Profits were impacted by recent catastrophic weather events,
resulting in a total net loss of $1.2m vs total net profit of $18.9m
in prior comparable period.

Please refer to the 2023 annual results announcement
presentation for further information.

Authority for this announcement
Name of person

authorised
to make this announcement
Tania Pearson, General Counsel & Company Secretary
Contact person for this
announcement
Emily Davies, Head of Corporate Affairs and Sustainability
Contact phone number +64 21 815 149
Contact email address emily.davies@tower.co.nz
Date of release through MAP

23 November 2023

Audited financial statements accompany this announcement.

---

Tower Limited
Annual Report 2023

Sustainable print and paper logo & wording
to insert here for the print version ONLY

Contents
2023 IN REVIEW3
2023 snapshot4
Update from Chair6
Update from CEO8
LOOKING AFTER OUR CUSTOMERS AND COMMUNITIES11
A year of unprecedented large events12
Events snapshot13
Supporting New Zealand’s recovery 14
DELIVERING ON OUR STRATEGY17
Our strategy18
Leading customer experience 20
Operationally efficient and effective28
High performing culture34
Resilient40
ENVIRONMENTAL, SOCIAL AND GOVERNANCE PERFORMANCE47
MATERIAL IMPACTS52
BOARD OF DIRECTORS 58
CONSOLIDATED FINANCIAL STATEMENTS61
Financial statements62
Notes to the consolidated financial statements67
INDEPENDENT AUDITOR’S REPORT106
APPOINTED ACTUARY’S REPORT111
CORPORATE GOVERNANCE AT TOWER113
GRI CONTENT INDEX125
TOWER DIRECTORY130
REGISTRAR131
ANNUAL REPORT 20231 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityOur strategyWeather events2023 in review

ANNUAL REPORT 20232Our strategyWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents2023 in review

2023 IN REVIEW
3ANNUAL REPORT 2023 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityOur strategyWeather events2023 in review

1
Adjusted to exclude Papua New Guinea.
2
Underlying profit includes large events but excludes non-underlying items. A reconciliation to reported loss can be found in the appendix of Tower’s FY23 results presentation via the NZX..
Customer growth vs.
310k in FY22
Underlying GWP
growth
1
$527m vs.
$457m in FY22
Management expense
ratio vs. 36% in FY22
Underlying profit
2

incl. large events vs.
$27.3m in FY22
Reported loss after
taxation vs. $18.9m
profit in FY22
Reduction in
emissions
321
K
17
%
32.2
%
$
7.6
M
-$
1.2
M
23
%
2023 snapshot
4ANNUAL REPORT 2023 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityOur strategyWeather events2023 in review

*
Band 8 and above.
Senior leaders are
women*
Reported claims across
New Zealand and the
Pacific, including large
events
Canstar’s 5-Star Rating
for Outstanding Value
Home & Contents in
2023
39
%
87.5
K
5
Countries
8
Years in operation
and counting
154
Staff volunteer hours in
our communities
390
5ANNUAL REPORT 2023 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityOur strategyWeather events2023 in review

In what has proved to be an extremely tough year for
the global insurance industry, Tower withstood the
immediate challenges of 2023 and remains resilient.
In the year to 30 September 2023, Tower’s underlying
profit including large events was $7.6m, down 72% from
$27.3m for the full-year 2022. Loss after taxation was
-$1.2m, versus $18.9m profit at the end of FY22.
On the basis of these results, the Board has decided
against payment of a full year dividend in accordance with
its focus on prudent fiscal management. Consideration
will be given to restarting dividends in FY24.
Unprecedented weather events worldwide have
sheeted home the impact of climate change and
signalled that the risk environment in which insurance
businesses operate has irrevocably changed. Inevitably,
the reinsurance market moved quickly to price
accordingly for what now is likely the new normal.
Risk-based pricing has been Tower’s best protection
to address these issues.
Tower was New Zealand’s first insurer to implement
risk-based pricing for inland flooding in November 2021.
Hazard modelling continues to be expanded to other
climate-related risks, with ratings for landslide and
coastal risks shortly due to be introduced to customers.
Our view remains that risk and pricing transparency
not only supports and encourages informed decision-
making but is fairer to customers and in the best
interests of our shareholders.
Importantly, Tower’s ability to proactively manage risks
throughout its portfolio via risk-based pricing has been
a key factor in securing a comprehensive reinsurance
programme for FY24 at competitive rates. This is crucial
as reinsurance provides protection from volatility caused
by large events, maintains flexibility to enable Tower’s
growth and supports strong solvency.
However, while risk-based pricing successfully
underpins Tower’s competitive pricing, robust
underwriting, continued growth, and response to issues
arising from climate change, it is not a cure-all or silver
bullet for all challenges.
High inflation and the resultant cost of living crisis is a
New Zealand-wide problem, not just a Tower problem,
but the upshot is that insurance is increasingly expensive.
And, while everyone would like to see insurance
affordable and accessible for all, the twin challenges
of an inflationary environment and increasing risks from
climate change make this unrealistic.
The unpalatable truth is that not everyone is – or will be –
able to afford to insure their home in the way they do now.
For Tower to remain a sustainable, resilient business,
we must not only be more selective about the risks we
take on, but also develop cost-effective alternatives to
traditional, comprehensive insurance cover.
In the year ahead, our biggest challenge will be to
continue to innovate at pace to meet the market. Over
time, a range of options are likely to be offered including
parametric cover which has already been successfully
trialled in the Pacific. Customers are also likely to be
offered the opportunity to choose the risks they want –
and can afford – to cover. For example, offering fire only
policies in flood-prone areas.
This approach is already common in many other parts of
the world and, while it will take some getting used to, it
will likely replace comprehensive cover for at least some
New Zealanders.
The New Zealand market enjoys strong insurance
penetration and people will be loath to give up all
protection. So, while affordability is currently presenting
challenges, the desire and need for insurance will not
dissipate. Fortune will favour those insurers who can
pivot and adapt, something that Tower has the digital
capability and proven ability to do.
From Tower’s perspective it is about developing
responsible alternatives to ensure insurance remains
accessible. Quite simply, if New Zealand Inc is unable
or unwilling to reduce risks by improving infrastructure
to protect at-risk land and assets, then these insurance
options become an absolute necessity.
The good news is that Tower is well-placed to tackle
these issues given its digital expertise and experience
in Pacific markets where affordability and low insurance
penetration are significant challenges. Tower has the
technical capability, expertise, and agility to price for
risk on a granular level and quickly get new options to
market as the insurance landscape changes.
Update from the Chair
ANNUAL REPORT 20236Our strategyWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents2023 in review

In an ideal world, Tower would continue offering
affordable, comprehensive cover to all, but in today’s
complex environment, that approach will not support
a sustainable, resilient business. Tower’s continued
resilience will be fostered through innovation and
meeting the market where it is at, not where we would
like it to be.
In closing, the Board acknowledges and thanks
management and the Tower team for the resilience
and determination they have shown in supporting our
business, customers and communities in what has
been a tough year.
Michael Stiassny
Chair
ANNUAL REPORT 20237Our strategyWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents2023 in review

Update from the CEO
At Tower, our purpose is to inspire, shape and
protect the future for the good of our customers and
communities. After a challenging year navigating
the impacts of catastrophic weather events in
New Zealand and across the Pacific, widespread
inflation and increasing crime, our purpose is more
important than ever.
While the business has rightly had a strong focus on
responding rapidly to the weather events and resolving
customers’ claims; we have continued to deliver on our
strategy - to be the best direct insurer in our chosen
markets, enabled through our investments in people,
technology and data. This has positioned Tower well to
grow and deliver sustainable value.
We remain resolutely focused on providing leading
customer experiences, increasing efficiencies across the
business, enhancing our culture and ensuring we remain
financially resilient.
Some key highlights include expanding our leading risk-
based pricing model, developing our parametric solution
in partnership with the United Nations, and reducing our
management expense ratio (MER) while growing our
customer numbers and premiums.
Tower is a resilient business with a strong purpose and
robust strategy, and we are pleased to report on the
progress we have made in FY23.
Business performance
For the year to 30 September 2023, our underlying
profit including large events was $7.6m, down 72% from
$27.3m for the full-year 2022. Loss after taxation was
-$1.2m, versus $18.9m at the end of FY22. The difference
between FY22 and FY23 is largely a result of the
catastrophic events and inflation pressures resulting in
higher claims costs.
Our focus on simple and rewarding customer
experiences combined with consistent rating actions
has contributed to strong growth in both customers and
premium. Underlying gross written premiums (GWP)
increased 17%* year on year, up to $527m.
During the financial year we have grown customer
numbers to 321,000, up 4% on FY22. Our 17% growth
in premium reflects a mix of rating and organic growth,
with 80% of our New Zealand premium growth driven by
decisive rating actions.
Improving efficiencies as our investments in digitisation
continue to drive down Tower’s costs to acquire and
serve customers along with continued focus on cost
control, has seen our overall MER improve again to 32.2%
versus 36% in FY22.
Tower’s solvency margin was reduced during the year,
primarily due to the catastrophic weather events. The
solvency margin is improving as event claims are settled.
As at 30 September 2023, Tower’s New Zealand parent
solvency ratio was 159% and the company was holding
$53.8m above the minimum solvency capital required
by RBNZ.
Navigating catastrophic events
In the financial year to 30 September 2023, three
catastrophic weather events took place in the space of
three months across Aotearoa and the Pacific: significant
weather events in Auckland and the upper North
Island, Cyclone Gabrielle, and Cyclones Judy and Kevin
in Vanuatu.
For 154 years, Tower has been helping people protect
the things they love, and we are committed to helping
our customers and communities get back on their feet,
as quickly as possible.
As at 20 November 2023 we had completed
approximately 84% of claims for the New Zealand
weather events and 88% of claims for the Vanuatu
cyclones. We are working hard to close the remainder.
We continue to work closely with the Government’s
Recovery Taskforce, Auckland Council’s Recovery
Programme, and the wider insurance industry to
support both a cohesive response to these events and
New Zealand’s resilience for the future.
Continuing to enhance risk-based pricing
Tower has long urged New Zealand to stop building in
risky areas. In November 2021 we were New Zealand’s
first insurer to launch a leading inland flooding risk-
based tool in conjunction with RMS, a global leader in
risk modelling. The flood tool leverages five million data
points and 50,000 years of continuous simulation of
the entire precipitation cycle. We share earthquake and
flood risk profiles with customers through My Tower.
We also shared data insights with central and local
government with an aim to better inform and protect and
customers and communities today, and in the future.
*
Adjusted to exclude Papua New Guinea.
ANNUAL REPORT 20238Our strategyWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents2023 in review

Risk-based pricing supports competitive pricing and
robust underwriting, and can inform action on issues
arising from our changing climate. Earlier this year, we
expanded our risk tool to include landslide and coastal
risks. In FY24 we will launch customer-facing ratings
for these risks, and we will continue to develop fair,
transparent and competitive products that meet the
needs of our customers today and in the future.
Customer experience
Tower continues to innovate and invest significantly in
digital and data capabilities to deliver our direct customer
experience, driving deeper customer engagement and
growth. In FY23, we completed the rollout of our flagship,
digital self-service platform, My Tower, across our
Pacific operations. We are now bringing the same digital
customer experience to all markets where we operate.
We’re also proud to have launched our parametric Cyclone
Response Cover pilot in Tonga, following a successful trial
in Fiji during the 2022/2023 cyclone season.
Streamlining our operations
We made positive progress in streamlining our business
in FY23, with the sale of our Papua New Guinea
subsidiary and the announcement of the sale of our
Solomon Islands business.
We also continued to develop our Suva hub this year.
With our core platform live across all territories we
operate in, we can now seamlessly flex resource up
and down across Fiji and New Zealand – our two
biggest markets.
Sustainability is at the heart of our business
FY23 marks the second year of our sustainability
reporting, with the aim of being more transparent about
the impacts of our business activities. We have continued
important initiatives to manage our most material
sustainability impacts and we’ve remained focused on
reducing our operational emissions. Our efforts this year
have helped reduce emissions by 23% compared to
FY22. We are on track to meet our five-year emissions
reduction target of 21% in 2025.
We continue to work towards B Corp accreditation and
are aiming to achieve this in the coming year. We look
forward to making our first Climate-related Financial
Disclosure in 2024.
Our people
I would like to thank our people who have worked
incredibly hard to support our customers and
communities – particularly those who were impacted
by the weather events.
We’re grateful to everyone, including those who pivoted
in their roles to rapidly respond and help support those
who needed it most when the catastrophic weather
events were unfolding. We’re extremely proud of the
empathy, selflessness and strong commitment to
helping others that our people have shown.
Our ability to scale up our support to the most impacted
areas is not only a reflection of our people’s willingness,
but further reinforces our ‘one team’ culture that
operates across New Zealand and our Pacific markets.
In keeping with our strategy, we’re pleased to have
announced some significant initiatives this year aimed at
empowering our people to give our customers their best.
Summary
We acknowledge how incredibly challenging this year
has been for our customers, our communities, our
industry and our business.
Our Tower strategy is very clear; we want to be the best
direct insurer in our selected markets. We are ruthlessly
driven to achieve this through a simple and rewarding
customer experience, enabled through digital, data and
our culture.
We are focused on delivering solid underlying operating
performance through robust risk management and
continued rating actions to mitigate inflation, the effects
of motor crime and weather events.
We also continue to focus on targeted customer and
premium growth while enhancing our margins through
efficiency and organisational improvements.
Tower is committed to mitigating the volatility caused by
large events through risk-based pricing and our robust
reinsurance arrangements. And while we manage the
effects of the changing climate now, we will continue to
invest in future business resilience and sustainability.
Ultimately, this leads to attractive and sustainable
earnings and dividends for shareholders over the
medium to longer term.
Blair Turnbull,
CEO
ANNUAL REPORT 20239Our strategyWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents2023 in review

A community hub in Auckland, following January 27 weather event
10ANNUAL REPORT 2023 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityOur strategy2023 in reviewWeather events

LOOKING AFTER
OUR CUSTOMERS
AND COMMUNITIES
ANNUAL REPORT 202311 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityOur strategy2023 in reviewWeather events

A year of unprecedented large events
JAN 23
Auckland and upper
North Island weather event
5,688 claims
$174m
MAR 23
Vanuatu cyclones
295 claims
$11m
FEB 23
Cyclone Gabrielle
3,636 claims
$52m
MAY 23
Auckland rain event
438 claims
$4m
Event costs are gross estimates as at 30 September 2023.
Net large event claims
expense for Tower in
FY23, after reinsurance
$
38
M
ANNUAL REPORT 202312ANNUAL REPORT 2023Our strategy2023 in reviewSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsWeather events

Events snapshot
*
As at 20 November 2023.
Auckland and upper North Island weather event and Cyclone Gabrielle
Years’ worth of large
loss house claims in
just over a fortnight
5
Motor claims
1,045
Texts sent within two
hours of January 27
weather event beginning
317
K
Event claims settled*
84
%
Emails with claims, safety
and cleanup advice sent
to customers in the month
following events
975
K
Families supported
with temporary
accommodation costs
367
House claims
5,711
Contents claims
2,330
Attended all six community
hubs immediately after
events in Hawke’s Bay
and Auckland
6
In food spoilage claims
paid to customers in the
aftermath of both events
$
200
K
ANNUAL REPORT 202313 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityOur strategy2023 in reviewWeather events

Supporting New Zealand’s recovery
This financial year Aotearoa
faced two catastrophic events,
the Auckland and the upper
North Island weather event and
Cyclone Gabrielle.
The scale of these weather events
was unprecedented for both our
country and industry. Tower is
committed to helping our customers
and communities get back on their
feet, as quickly as possible.
Tower’s rapid response
The speed of our initial response on January 27 meant
customers in impacted areas were sent texts within
hours of the event beginning, with advice on how to
claim. Our Chief Claims Officer activated Tower’s event
response team that night and by morning, additional
resource was on the way to help with the high volume
of claims. This included flying assessors into Auckland
from around New Zealand.
Our large event motor claims process was triggered
immediately, and two hours after the event began our
towing network was transporting customers’ vehicles
to a central assessment yard. This meant we were able
to start settling motor claims for our customers within
one business day.
A couple of weeks later, we followed this model
for customers impacted by Cyclone Gabrielle too.
Our teams were on the ground within a day of each
event, assisting customers at community hubs in
Auckland and Hawke’s Bay. We scaled up, using our
suppliers, hiring additional staff and redeploying our
people in Fiji and Rotorua to our phone lines and
online claims lodgement.
Flooding in Auckland during the January 27 weather event
ANNUAL REPORT 202314Our strategy2023 in reviewSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsWeather events

There for our customers
The volume of claims and the range of external parties
required to resolve claims related to these events
presented challenges for everyone. We know the time
it has taken to resolve some claims and contact Tower
at times has been frustrating for people.
With every event, we take the opportunity to learn
and improve so we can provide a better service for our
customers. This year we have made improvements to
our claims processes, to ensure that our customers
receive timely communications and action from us,
throughout the entire claims journey.
By 20 November, Tower had settled 84% of claims
from the Auckland and Upper North Island event and
Cyclone Gabrielle.
A few weeks after Cyclone Gabrielle, Cyclones Judy
and Kevin made landfall in Vanuatu. These events were
devastating for the people of Vanuatu and we are proud
of the support we provided our Vanuatu customers.
As at 20 November, Tower had settled 88% of claims for
these events.
These events are a reminder of the role insurance
plays in our economic resilience. We continue to look
for ways to improve how we help our customers and
communities recover after large events.
* As at 20 November 2023.
Tower’s central motor assessment yard following
January 27 weather event
Tower staff at an Auckland community hub following January 27 weather event
Auckland & upper
North Island event
claims settled*
83
%
Cyclone Gabrielle event
claims settled*
84
%
ANNUAL REPORT 202315Our strategy2023 in reviewSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsWeather events

ANNUAL REPORT 2023162023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

DELIVERING ON
OUR STRATEGY
ANNUAL REPORT 202317 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityWeather events2023 in reviewOur strategy

Our strategy
Our strategic pillars
To be the best direct insurer in our selected markets
differentiated through digital and data, fairness and
transparency, and by caring for our customers in
everything we do.
LEADING
CUSTOMER
EXPERIENCE
Simple and
rewarding
customer
experiences
across the life
cycle.
HIGH
PERFORMING
CULTURE
An inclusive,
diverse and risk
aware culture.
Empower
our people to
achieve great
things.
OPERATIONALLY
EFFICIENT &
EFFECTIVE
Digitise and
automate core
processes
and leverage
geographical
footprint.
RESILIENT
Manage volatility
and deliver
sustainable
outcomes for all
stakeholders.
Our values
WE DO WHAT’S RIGHT
OUR PEOPLE COME FIRST
OUR CUSTOMERS ARE OUR COMPASS
PROGRESS BOLDLY
18ANNUAL REPORT 2023 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityWeather events2023 in reviewOur strategy

Our purpose
To inspire, shape and protect the future for the
good of our customers and communities.
Our vision
Ta tātou kaupapa
To deliver beautifully simple
and rewarding experiences
that our people and our
customers rave about.
ANNUAL REPORT 202319 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityWeather events2023 in reviewOur strategy

Leading
customer
experience
ANNUAL REPORT 2023202023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Innovating for our customers
In line with our strategy to create
leading customer experiences, Tower
continued to develop our innovative
products and digital offerings over
the financial year. These efforts have
contributed to record growth in GWP.
My Tower
In FY23, our flagship, digital self-service platform,
My Tower continued to enhance the insurance
experience for our customers, allowing them to
purchase insurance, update and keep track of policies
and view their property’s risk profile for flooding and
earthquakes. All this, via one simple online platform.
In New Zealand, My Tower assisted our customers to
lodge and check the progress of their claims online.
This financial year, we completed the rollout of My
Tower across our Pacific operations - the first platform
in the Pacific that allows people to get a quote and
purchase insurance online. It’s a remarkable step-
forward in our plan to increase insurance accessibility
in the Pacific, where roughly 10% of homes have
insurance, compared to 90% in New Zealand.
1
Legacy partnership portfolios have been transferred from the Partnerships business unit to Tower Direct after purchase.
2
Excluding Papua New Guinea which was sold in FY23.
Customers now
registered for
My Tower
264
K
Tower Direct GWP
1

up 22% from FY22
$
391
M
Pacific GWP
2
up 4% from FY22
$
53
M
Partnerships GWP
up 26% from FY22
$
82
M
ANNUAL REPORT 2023212023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Forward thinking products for modern
customers
Our focus on innovation and investment in large-
scale digital transformation over the last four years
continues to enable Tower to evolve rapidly, in
line with the latest in technology and customer
expectations. The result is customer-focused,
digital-first insurance solutions that allow us to
create products to suit the modern lifestyles of
our customers.
In FY23, we celebrated the one-year anniversary of
Contract Works – Renovation Cover, ensuring we are
there to support our customers as they renovate their
homes. It’s the newest addition to our personal lines
offering, which includes products for motor, contents,
boat, travel, pet and landlords, as well as insurance for
renters, lifestyle block, EVs, e-scooters and e-bikes.
NZ direct sales
online vs. 66%
in FY22
77
%
Increase in Tower
Direct online
quotes vs. FY22
18
%
Customers hold
multiple policies
with us
50
%
ANNUAL REPORT 2023222023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Partnering for success
Our partners continued to drive more customers to
Tower in FY23, with an uptick in referrals and subsequent
growth through the New Zealand Financial Services
Group, Kiwi Adviser Network, Allianz Partners, Ray White,
Coastguard, TSB, Aon Fiji and the Fiji Development Bank,
among others.
New partnerships with New Zealand Home Loans, MTF
Finance and Squirrel Mortgages, also helped to support
our customers and business growth.
Wherever possible we also partner to deliver products
in better ways and to do existing tasks more efficiently.
In the year, work continued with the likes of Risk
Management Solutions, Redbook, FRISS and Sentro to
enhance our different business processes.
Active advisers
up 67% from FY22
2,500
Increase in new risks
sold from referral
partners vs. FY22
35
%
GOLD AWARD:
Outbound Business to
Business Calling
SILVER AWARD:
Outbound Business to
Consumer – Sales
ANNUAL REPORT 202323 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityWeather events2023 in reviewOur strategy

Sustainable and innovative growth
Parametric insurance
now available in two
countries, Fiji and Tonga
2
Parametric policies
in place for the FY24
cyclone season
600
Growth is key to our strategy
but in order to be there for our
customers and deliver good returns
for shareholders long-term, this
growth must be sustainable. We are
focused on growth in the right areas,
with the right risks.
Parametric insurance for the Pacific
In August 2023, Tower launched its parametric Cyclone
Response Cover pilot in Tonga. Cyclone Response
Cover was first trialled in Fiji for the 2022/2023 cyclone
season in collaboration with the United Nations Capital
Development Fund, under its flagship Pacific Insurance
and Climate Adaptation Programme. Following the pilot’s
success, Cyclone Response Cover is now available to
all Fijians.
Under Tonga’s Cyclone Response Cover trial, the product
is available to Tonga Development Bank customers and
Pacific Disability Forum members for the 2023/2024
cyclone season. Following this, our goal is to launch the
product to the wider Tongan market.
Cyclone Response Cover provides a rapid cash pay-out
to customers based on proximity to a high wind speed
cyclone event, regardless of damage and without the
need for an insurance assessor’s signoff. Parametric
insurance products are a lower-cost alternative that
provide a level of cover for communities that may not
benefit from traditional insurance.
Cyclone Response Cover will help increase insurance
accessibility, particularly as climate change impacts
increase over time. In the coming years Tower plans
to expand parametric insurance into more of our
Pacific territories.
ANNUAL REPORT 2023242023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Risk-based pricing, a fair way to price insurance
With our award-winning and market-leading approach
to earthquake and flood risk-based pricing, we’re
proud to share information with customers about their
properties, empowering them to better understand their
insurance needs and premiums.
We believe risk-based pricing is a fairer way to price
insurance as customers only pay for the risks that apply
to their properties. Launched in 2021, the response to
our risk tool has been positive. Since then, we’ve tested
our model against the impacts of actual flood events and
these have matched closely every time. This continues
to give us confidence in the accuracy of our pricing
and underwriting.
Following accurate modelling of this year’s large events,
we used our risk-based pricing model to implement
three key changes to ensure we price fairly, grow
sustainably and further protect the business from the
volatility of weather events:
1. Increased the weighting of the flood-risk portion of
our premiums to better reflect changing risk profiles.
2. Implemented new risk selection criteria for
landslide risks, immediately following the January
2023 weather event.
3. Added automated risk-selection for sea surge
for new business and underwriting risk reviews for
existing customers.
In FY24, Tower will fully automate underwriting for
landslide and sea surge risks, and these will be added to
the customer view in My Tower alongside a transparent
premium breakdown.
*
Independent research conducted by the Octopus Group in April 2023, with a sample size of 1,000 representative of New Zealand’s population.
Kiwis think risk-based
pricing is a fair way to
price insurance*
87
%
Kiwis agree that landslip risk
should be factored in when
assessing a property’s risks*
79
%
Kiwis agree that storm surge
risk should be factored in when
assessing a property’s risks*
72
%
ANNUAL REPORT 2023252023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Fair and transparent insurance
At Tower, fairness and transparency
are a core part of our customer
experience. We aim to make insurance
simple and easy so that our customers
understand their insurance and have
the right cover in place to suit their
needs. Most importantly and in line
with our values, we do what’s right.
Committed to supporting our customers
A new Financial Advice Provider (FAP) regime was
introduced to the industry in FY23. Tower is committed
to understanding and supporting the needs of our
customers so we applied for and were issued a full FAP
Licence. Tower supports the intent of the regime – which
is to make good financial advice accessible to Kiwis.
Tower team members
trained to provide
financial advice to Kiwis
194
Inbound calls answered by
our trained representatives
since the regime went live
in March 2023
175
K
26ANNUAL REPORT 2023 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityWeather events2023 in reviewOur strategy

Putting things right for our customers
Tower is focused on putting things right for customers
who have received incorrect discounts or benefits.
We sincerely apologise to those who have been
affected by these errors.
The most significant part of our remediation
programme in FY23 has been refunding customers
who have not received correct multi policy
discounts. We have made substantial progress
with $6.2m excluding GST paid to these customers
as of 31 October 2023. Tower has provisioned
$11.2m for this customer remediation which allows
for amounts to be paid to around 65,000 customers
and potential regulatory action. After we identified
the issue, we proactively advised the Financial
Markets Authority (FMA) and we have been assisting
FMA with its investigation in relation to the overcharge.
Other remediations we have in progress are for
premium overcharges in connection with the
application of promotions and policy discounts.
We have provisioned around $500K for these.
We are working to identify all impacted customers
so we can refund any overpayments.
As well as reviewing our processes, we are also
redesigning and simplifying our multi-policy offering
and expect to share more about this change in FY24.
ANNUAL REPORT 2023272023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Operationally
efficient and
effective
ANNUAL REPORT 2023282023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Our digital and data capabilities
As a forward thinking insurer, the
customer and efficiency benefits
from our digital platform continue
to be realised.
Our digital platform is driving down the costs to
acquire new business and serve as Kiwi and Pacific
communities increasingly adopt our online sales
and service channels.
Customers are also seeing the benefits as
evidenced by our New Zealand online net promoter
score. For our business, our core platform agility has
enabled rapid deployment of technology releases,
which take us just 25 minutes a day.
Service tasks and transactions
completed digitally in NZ vs.
50% in FY22
55
%
Combined NZ net
promoter score for
online experiences
55
%
ANNUAL REPORT 2023292023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Our vision for the future of claims
Tower’s vision for the future is of a digitised end-to-
end customer experience, where our customers can
manage every aspect of their claim via My Tower,
supported by automated internal systems and supplier
networks. We’re on a journey to achieve this by FY26
with the goal of improving transparency for customers,
reducing operating costs, increasing efficiency and
productivity, and continuing to deliver good, simple
customer experiences.
In FY23, thanks to our new Repair Partner Network’s
straight-through-repair model for simple repairs,
we removed the need for 40% of our customers to
wait for an insurance assessment. Similarly, 40% of
our My Tower motor claims are now lodged through
claims automation.
Claims from the Auckland and
upper North Island weather
event and Cyclone Gabrielle
were lodged online
69
%
Claims now lodged online
in NZ vs. 49% in FY22
59
%
ANNUAL REPORT 2023302023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Simplifying our business to deliver
sustainable growth and efficiencies
Over the last four years Tower
has invested heavily in digitisation
to increase scale and simplify our
business. In FY23, this investment
led to a further reduction in our
management expense ratio (MER)
and improvements in our customer
experience.
One core platform
With our core personal lines platform now live across
all countries, we have simplified our organisational
alignment around our three customer journeys: new
business, service and claims – rather than across
geographical locations. This is aimed at delivering
consistent and repeatable processes across our
business, simultaneously reducing complexity,
duplication and risk.
Streamlining our operations
In FY23, Tower completed the sale of our Papua New
Guinea subsidiary and announced the sale of our
Solomon Islands business, which we expect to complete
in the first half of FY24. These sales allow Tower to focus
on developing and delivering our personal lines and
small-medium enterprise customer experience in the
Pacific. Growth in our Pacific business will be enabled
through Tower’s digital and data offering, while we
streamline our operations and tighten our risk appetite.
MER down from 36%
in FY22
32.2
%
New Pacific business
purchased via new platform
up from 45% in FY22
81
%
ANNUAL REPORT 202331 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityWeather events2023 in reviewOur strategy

The cornerstone of our Pacific operation
With our core platform and
My Tower now live across the entire
Tower Group, our Suva Hub began to
realise its full potential this financial
year, delivering significant value and
organisational efficiencies.
Supporting our large event response
Following the Auckland and upper North Island weather
event and Cyclone Gabrielle escalating claims volumes
impacted our customer wait times. Our Suva team was
able to support via our phonelines, email communications
and online claims lodgment processes. Online support
for our New Zealand customers via Suva was a milestone
moment for Tower - with our core platform, we’re not
only operating as one team we’re operating on the same,
innovative, digital system too, regardless of location.
Our strategic advantage
Tower has operated in the Pacific Islands for almost
150 years. As the cornerstone of our Pacific operation,
Fiji represents a differentiator and strategic advantage
for Tower.
Our two biggest markets, New Zealand and Fiji, sit
in the same time zone, or within an hour’s difference
during daylight saving months. Because we’ve
expanded our operations in Fiji to include all core
business functions our BAU operations can now
operate seamlessly across both countries, as well
as the wider Tower group.
Instead of outsourcing, we are investing in local
economies which offers great strategic value to
Tower. This value goes hand-in-hand with the
expansion of our Suva team, which has grown from
62 FTE in FY21 to 88 in FY22 and now 233 in FY23.
Staff attrition in the Pacific is lower than in
New Zealand, where the labour market is tight
compared to Fiji. Fiji’s cultural similarities means
our access to talent in-country presents a unique
opportunity to provide a better experience for all
Tower customers, while bolstering resilience and
reducing MER.
ANNUAL REPORT 2023322023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Future growth enabled
To support this growth, at the beginning of FY24, our
Suva team will move into a new, larger office, marking
the next chapter in our Suva Hub journey.
New Zealand Fiji Business Council breakfast with Fiji
Prime Minister Sitiveni Rabuka
ANNUAL REPORT 2023332023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

High
performing
culture
ANNUAL REPORT 2023342023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Our culture
Our people are at the heart of
everything we do. We know that
by looking after our teams, we
empower them to show up in the
best way possible for our customers.
Employee engagement
score*
7.8
Emerging Talent programme
employees progressed in their
careers at Tower in FY23
81
%
Employees are non-European,
based on the 96% of staff
who chose to disclose their
ethnicity in FY23
59
%
Diverse and inclusive
At Tower, our values are; ‘we do what’s right’, ‘our
customers are our compass’, ‘progress, boldy’ and ‘our
people come first’. We truly live by these values and our
staff engagement surveys, run in March and September
each year, reflect this.
We’re particularly proud of our diversity and inclusion
score and contributors, which are consistently high. In our
latest survey, our overall ‘diversity and inclusion’ score was
8.6, with contributors like ‘freedom of opinion’ and ‘feeling
valued’ scoring at 8.1. This is important to us because for
our people to feel comfortable to express their opinions
at work, there needs to be a high level of trust across
the entire Tower group. When people feel valued and
respect each other’s individual differences, this creates an
environment for people to thrive and collaborate freely.
We know that this is crucial for a business to flourish, stay
competitive and remain ahead of the curve.
*
As at 22 September 2023, based on Tower’s latest staff engagement survey.
Employees earn a living
wage in NZ or a living wage
equivalent in the Pacific
100
%
ANNUAL REPORT 2023352023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Committed to our people
36ANNUAL REPORT 2023 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityWeather events2023 in reviewOur strategy

Employees rated Tower’s
commitment to health and
wellbeing at 8.3, in the top 25%
of the global finance sector*
8.3
Putting our people first
New benefits launched this year include gender
affirmation leave and increased paid parental leave.
These are in addition to our existing benefits such as
our refreshed volunteer leave framework, birthday leave,
domestic violence leave, the ability to purchase up to
eight extra days leave, flexible working, free financial
wellbeing seminars, discounts for group insurances
and with a range of suppliers across New Zealand and
the Pacific.
To make it easier to access these benefits in FY23, we
launched the Tower Beam app, which consolidates all
our staff discounts into one easy platform for our people
to take advantage of, no matter where they are.
Enhanced wellbeing
Our people’s wellbeing was top of mind during our
response to weather events this year. In addition to hiring
more people to handle the sharp increase in workloads
we delivered 15 sessions on managing stress through
compassion, connection and mindfulness to more than
200 staff. This included a tailored session for our event
response team.
Changing sick leave to wellbeing leave in FY22 has
also helped enhance our teams’ wellbeing in FY23,
while opening up broader conversations about mental
health and managing stress. Wellbeing leave replaces
sick leave and can also be used for rest or activities that
proactively manage personal wellbeing.
As an insurer, our work environment is unique. Spread
across eight countries, from offices to assessing
damages out in our communities - we’re proud that
in FY23, we reported zero workplace injuries and
zero harm.
*
As at 22 September 2023, based on Tower’s latest staff engagement survey.
ANNUAL REPORT 2023372023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Tower leaders named on Insurance Business
New Zealand’s Elite Women List; Head of
Pricing, Amy You; Head of Corporate Affairs and
Sustainability, Emily Davies; and Head of Platform
Delivery, Johannah Benton
3
Leadership gender pay gap
Comparing our senior leadership population and
the average pay gap between men and women, our
leadership pay gap is 2.7% (men are paid 2.7% more
than women).
2.7
%
Gender pay equity gap
When we compare like-for-like roles for women and
men at Tower in New Zealand, our pay equity gap is
–0.2% (women are paid 0.2% more than men for the
same role).
-0.2
%
Gender pay gap, improved by 5.7% vs. FY22
When we take the total salary for all women and
divide that by the number of women, and the total
salary of all men and divide that by the number of
men, we have a gap of 20.2%.
For the most part, this is because we have a larger
proportion of women in some of our New Zealand
frontline roles, and a greater proportion of men in
senior roles.
20.2
%
ANNUAL REPORT 2023382023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Looking after our people
at work and at home
In FY23 Tower increased parental
leave entitlements from 12 to 16
weeks paid leave for primary carers
and, two to four paid weeks leave
for partners.
An especially exciting development was the rollout of
these same benefits across our Pacific operations. This
was part of a wider project to align staff benefits across
the Tower group. Parental leave legislation varies greatly
in the Pacific compared to New Zealand, options are
limited and in some countries even unpaid leave for
partners is not required by law.
Now, our teams in the Cook Islands, Solomon Islands,
Vanuatu, Tonga, Fiji, Samoa and American Samoa
enjoy the same updated benefits as our teams in
New Zealand, including parental leave – typically above
and beyond what is available in each country.
ANNUAL REPORT 2023392023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Resilient
ANNUAL REPORT 2023402023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Here to do good, for good
2023 was challenging for the
local and global insurance industry.
Our ability to stay agile, driven by
digital and data capabilities, backed
by robust reinsurance, allows us to
remain financially resilient and adapt
to market challenges.
ANNUAL REPORT 2023412023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Protecting Tower and our customers with
real-time, automated underwriting
In FY23, we continued automating our underwriting
processes underpinned by our risk-based pricing model
and digital agility. In New Zealand, for the second year
running, nearly 100% of our existing house customers’
sums insured were updated automatically, mainly using
data from the Cordell calculator. This helps customers
choose a suitable level of cover.
This financial year, Tower proactively managed
inflationary pressures through targeted rating and
underwriting actions. Monthly rating changes allowed
us to mitigate reinsurance and weather-related cost
increases as well as keep pace with inflation. Similarly,
with increased motor crime, Tower identified vehicles
subject to higher rates of theft and made appropriate
changes to rates and excess charges.
Our ability to take swift and decisive action to address
emerging issues on a granular level is at the heart of
the digital transformation Tower has undergone in
recent years. It’s this flexibility and agility that helps us
to successfully mitigate external challenges beyond
our control and remain resilient.
NZ risks are now sold
without requiring a manual
underwriting review and
pricing adjustments
94
%
Pricing and underwriting
adjustments made
across FY23
100
+
ANNUAL REPORT 2023422023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Robust reinsurance
In May, following large weather events and aligned
with our comprehensive approach to reinsurance,
Tower placed additional reinsurance reinstatement
cover for the remainder of FY23. The purchase of
additional cover ensured protection remained in place
for additional events up to a limit of $889m.
Reinsurers are attracted to our robust underwriting
and risk-based pricing approach and Tower is pleased
to receive ongoing support from some of the world’s
largest reinsurers as well as backing from reinsurers
looking to start new relationships with us.
In a challenging reinsurance market following significant
global weather events, Tower was pleased to secure
a comprehensive FY24 reinsurance programme, at
competitive rates for home, motor, boat and commercial
portfolio cover, across New Zealand and the Pacific.
Last year’s Toka Tū Ake EQC cap increase from
$150,000 to $300,000 reduced the amount of
catastrophe coverage needed.
To support our prudent risk appetite, Tower purchased
cover for two catastrophe losses up to $750m. Cover
is inclusive of an automatic reinstatement. Tower also
purchased cover for a third catastrophe event up
to $75m.
This cover, combined with Tower’s existing multi-year
placements, results in a reinsurance excess increase to
$16.9m for the first two events in FY24, up from $11.9m
in FY23. An excess of $20m applies for a third event.
The market experienced significant increases in
reinsurance prices and excesses throughout FY23 so
we were very pleased to achieve moderate pricing and
excess increases for FY24.
Cover in place for first
two catastrophe losses
in FY24
$
750
M
Cover in place for a third
event in FY24
$
75
M
ANNUAL REPORT 2023432023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

Protecting the everyday
As an insurer it’s our job to be there
when the worst happens. Large
events in New Zealand and the
Pacific this year have brought this
role to the fore for our communities.
But we’re also here to help when
everyday things go wrong, reporting
76,597 everyday claims in FY23.
From holidays to vehicles and
homes, we helped protect more of
the things our customers love this
year too.
4
K
Rugby ball related claims in
NZ, mostly for kids kicking
rugby balls into TVs
14
Increase in travel
policies sold
67
%
Claims for wedding and
engagement rings in NZ
405
Claims for Pacific homes
319
Boat claims happened out on
the water in NZ
31
%
Pacific motor claims
1,600
Boat claims caused by
mishaps at boat ramps
around NZ
63
Travel insurance policies
for trips to Australia, our
most popular destination
44ANNUAL REPORT 2023 ContentsGRI content index Corporate governanceConsolidated financial statementsSustainabilityWeather events2023 in reviewOur strategy

Claims for Kiwi homes
12.7
K
Claims for hot water
cylinders
530
Increase in NZ motor
theft claims
26
%
Growth in electric
vehicles (EVs) covered
60
%
ANNUAL REPORT 2023452023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index ContentsOur strategy

46ANNUAL REPORT 2023 ContentsGRI content index Corporate governanceConsolidated financial statementsOur strategyWeather events2023 in reviewSustainability

ENVIRONMENTAL,
SOCIAL AND
GOVERNANCE
PERFORMANCE
ANNUAL REPORT 202347 ContentsGRI content index Corporate governanceConsolidated financial statementsOur strategyWeather events2023 in reviewSustainability

Sustainability at
the heart of what
we do
Our sustainability strategy
guides how we manage relevant
environmental, social and
governance issues and provides a
framework for managing our most
material impacts. It was developed
to enable us to deliver on our
company purpose:
“To inspire, shape
and protect the future
for our customers
and communities.”
Providing no-
surprises, easy
to understand
insurance that is
accessible and
affordable.
Championing informed
dialogue about climate
change and pursuing win-
win outcomes that tackle
sustainability issues.
Moving all aspects of our
business towards zero-
carbon and zero waste,
and ensuring we have
a positive impact on
Aotearoa and the Pacific,
now and in the future.
A diverse and
inclusive workplace
that builds
people’s physical
and emotional
wellbeing.
ANNUAL REPORT 202348Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

ESG Governance
Tower’s Board provides the highest level of ESG
governance at Tower. The Board approves and
monitors our ESG governance and reporting, with
performance monitored through periodic updates
from management. ESG governance is formalised
through an executive level steering committee which
has responsibility for overseeing progress on our
initiatives and monitors environmental and social risks.
Our ESG performance is coordinated by the Head of
Corporate Affairs and Sustainability, reporting to the
CEO. As we progress our response to Climate-related
Financial Disclosures and our B Corp aspirations, the
Board and management will continue their focus on
ESG governance and climate risks and opportunities,
by developing new policies and continuing to enhance
our governance framework in FY24.
This annual report is Tower’s second step into
sustainability reporting with the aim of being more
transparent about our broader business activities.
This report has been prepared in accordance with
the Global Reporting Initiative (GRI) 2021 standards.
ANNUAL REPORT 202349 ContentsGRI content index Corporate governanceConsolidated financial statementsOur strategyWeather events2023 in reviewSustainability

Reducing our emissions
Tower has set a science-based reduction target
of 21% over five years from our 2020 base year
(551 tCo
2
e). Our carbon footprint is calculated in
accordance with the requirements of the Greenhouse
Gas Protocol and ISO 14064-1:2018.
Our actions to curb emissions in FY23 following
a post-Covid spike in FY22 has resulted in a 23%
reduction over the year to 477 TCo
2
e. This year’s
progress sees us on track to achieving our current
FY25 target with calculated emissions now 13% below
our FY20 baseline year.
Emissions reductions in the year have largely
been achieved through progressively replacing our
New Zealand and Pacific fleet with hybrid vehicles
and changing driving behaviours in both regions. All
our New Zealand fleet vehicles are now hybrids and
we will continue to transition the remainder of our
Pacific vehicle fleet in FY24.
Virtual meetings technology has now been fully
embraced in our Pacific operations and we are
increasingly conducting claims assessments virtually
in New Zealand, reducing the need to travel.
Emissions from powering our premises are now 25%
below our baseline year, largely due to the move
to our Six Green Star Rated premises in Auckland.
An increase in stationery energy emissions of 18% in
FY23 is predominantly due to the inclusion of additional
data sources. This was partially offset by emissions
reductions from New Zealand’s continued transition
to renewable energy and the sale of our Papua
New Guinea subsidiary.
Our preparation for Climate-related Financial
Disclosures includes expanding our measurement
and reporting of Scope 3 emissions. As more data is
captured over time, we expect the inclusion of previously
unreported Scope 3 emissions including from our
underwriting portfolios and supply chain to increase
Tower’s total carbon emissions profile. As part of this
work we will review our emissions targets in FY24.
Tower has elected not to offset our FY23 emissions
as our preferred approach is to invest in initiatives that
reduce gross emissions as much as possible such as
transitioning our fleet and investigating renewable
energy sources for our Pacific premises.
SCOPEFY20 (TCO
2
E)FY21 (TCO
2
E)FY22 (TCO
2
E)FY23 (TCO
2
E)
SCOPE 1169115300165
SCOPE 2180165126135
SCOPE 320298191177
ANNUAL REPORT 202350Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

Identifying material impacts
In 2021, we identified a range of topics and impacts
through research and engagement, which included
interviewing a range of stakeholder representatives
and relevant experts. We spoke to our Board,
shareholders and partners, representatives from the
wider insurance industry and financial markets, as well
as experts in sustainable finance and climate change.
We undertook employee workshops involving senior
management and a diverse range of people and
roles from across the business. In 2022, we assessed
and prioritised the full range of Tower’s sustainability
impacts using the GRI 3: 2021 methodology.
Members of our executive steering committee
reviewed our material impacts in 2023 and validated
that our 12 material topics largely remain consistent
with the FY22 assessment. Increases in significance
were identified for three topics: climate change
increased, due to the increasing frequency and
severity of extreme weather; affordable and accessible
insurance was rated higher, reflecting the current cost
of living challenges in New Zealand and the Pacific; and
product development also increased in importance due
to the potential for product innovations like parametric
insurance to bring positive benefits to Pacific people.
Our impacts are detailed in the table on pages 52-57
along with relevant impacts identified and addressed
both in the table and throughout this report. The
impacts reflect Tower’s business operations in both
New Zealand and the Pacific Islands and have been
reviewed and approved by our leadership.
Climate-related Financial Disclosures
In FY23 Tower made positive progress towards
addressing our climate change risks and opportunities
with our first mandatory Climate-related Financial
Disclosure required for the FY24 reporting year. Due
to internal resources being diverted to managing
this year’s catastrophic events, we have elected not
to make an early voluntary disclosure for FY23 as
originally intended.
In the year, Tower adapted the New Zealand insurance
industry climate change scenarios for Tower’s strategy
and business model in New Zealand and the Pacific
Islands. Tower’s climate change scenarios explore three
possible and plausible futures over a timeframe out to
2050. These scenarios have allowed us to develop a
comprehensive set of climate change risks (including
both physical and transition risks) and opportunities
which will ultimately enable us to model the potential
future financial impacts of climate change and further
develop our strategic responses.
B Corp
As we’ve indicated previously, Tower would like to
achieve B Corp accreditation in the coming year.
B Corp measures a company’s entire social and
environmental impact. Attaining this certification would
confirm that Tower is demonstrating high verified
standards of social and environmental performance,
public transparency, and accountability as we progress
towards our sustainability goals.
ANNUAL REPORT 202351Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

STRATEGY
ALIGNMENT
MATERIAL TOPIC
OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS
SDG
ALIGNMENTMANAGING OUR IMPACTSDELIVERED IN FY23
FY24 TARGETS
AND INITIATIVES
TARGET FOR FY25
AND BEYOND
Diverse and
Inclusive to
the core
Diversity and inclusion
We recognise that a lack of diversity excludes
minority groups which limits diverse thinking
and impacts mental health and emotional
wellbeing.
Diversity is also an important part of customer
innovation. We are committed to having a
diverse and inclusive workplace that builds
people’s physical and emotional wellbeing.
Investing in a positive business culture that
prioritises the personal growth of our people
impacts our attractiveness as an employer
and retention of talented employees.
• We have policies and processes in
place to ensure equal opportunities
for roles at Tower
• Our recruitment policy incorporates
cultural considerations for conducting
interviews and outlines a process
to ensure all interview panels are
balanced culturally and by gender
• We offer unconscious bias training
to all staff
• Our emerging talent programme has
a focus on identifying diverse future
leaders.
FY23 targets
Drive practices and outcomes that will result in
Tower’s leadership reflecting the diversity (gender
and ethnicity) of our customers and communities:
• 100% of hiring panels, candidate shortlists
and succession plans consist of one woman
candidate and one ethnically diverse candidate
• Attrition of diverse talent is kept below the level
of gender and ethnic representation.
Delivered in FY23
• Target not met largely due to challenges with
collecting ethnicity data from candidates during
the recruitment process. However, gender diversity
was achieved for candidate shortlists in 100% of
roles and hiring panels for bands 7 and above.
75% of succession plans included gender diverse
candidates.
• Attrition of diverse talent was less than total attrition
• Increased Parental Leave Benefit
• Introduced Gender Affirmation Leave
• Added more options for our people to choose
from or select for their personal gender, ethnicity,
and national origin, to better reflect our workforce.
This resulted in an increase in gender and ethnicity
disclosure rates to 96% in FY23 compared to 85%
in FY22
• 239 staff completed unconscious bias training
• In FY23 our gender pay gap improved to 20.2%
from 25.9% in FY22. Our gender pay equity gap
in FY23 was -0.2% and our leadership pay gap
was 2.7%.
See pages 34-39 and 114-115 for more information.
• Target to be
developed.
• Target to be
developed.
Material impactsMaterial impacts
ANNUAL REPORT 202352Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

STRATEGY
ALIGNMENT
MATERIAL TOPIC
OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS
SDG
ALIGNMENTMANAGING OUR IMPACTSDELIVERED IN FY23
FY24 TARGETS
AND INITIATIVES
TARGET FOR FY25
AND BEYOND
Diverse and
Inclusive
to the core
(continued)
Employee wellbeing
We believe that caring for our people’s
wellbeing is fundamental to a healthy culture.
Reduced wellbeing can lead to physical
or emotional harm and right now financial
wellbeing is a key concern for many Kiwis and
Pacific people.
We can make a difference by having
opportunities and initiatives in place to
support our people’s physical, mental and
emotional wellbeing and build their capability
for the future.
Supporting our people’s wellbeing
• Tower is committed to creating a
culture where incidents, near misses,
hazards and discomfort are reported
• We offer a range of contemporary
benefits plus, flexible working,
wellbeing leave for proactively
managing personal or family wellness,
the ability to purchase extra annual
leave, and an additional paid day off
for our people on their birthday
• We provide training and development
opportunities for our people that
includes training for their role,
personal goals and leadership
capability
• We have 15 Mental Health First Aiders,
trained by St John to support our
people through challenging times.
FY23 target
• Zero harm
Delivered in FY23
• Zero harm achieved
• Improved employee leave benefits
• Delivered 15 managing stress sessions to more
than 200 staff
• Delivered eight financial wellbeing seminars
• Provided domestic violence responder
training to 12 employees, bringing our
responders up to 20 across Tower
• Launched the Tower Beam benefits app
• Achieved Living Wage accreditation
• Renewal of DV Free Tick accreditation
• Launched new recognition programme.
See pages 34-39 for more information.
• Zero harm• Zero harm
Go-to trusted
insurance
partner
Affordable and accessible insurance
Low rates of insurance in the Pacific are due
to a range of issues, including the insurability
of many Pacific homes, the unique ownership
structures of properties within families,
affordability and a lack of insurance products
to suit their needs, or a lack of available
internet or transportation to access insurance
products.
We know that not having the right cover
makes people, communities, and economies
reliant on aid, which creates unnecessary
uncertainty and can mean it takes more time
to recover when the worst happens.
We have a responsibility to ensure insurance
remains accessible and affordable. This is
a challenge given the current inflationary
environment and increasing risks from large
events and climate change.
• We continuously monitor our pricing
and benefits to ensure we are
competitive and offer value for money
• Our affordability focus group ensures
our team has the necessary skills to
assist customers with affordability
issues.
• Our parametric insurance product,
Cyclone Response Cover offers a
lower-cost alternative level of cover
for customers in Fiji and Tonga.
FY23 targets
• Consistent digital offerings are in place across
New Zealand and our Pacific markets
• 1,000 parametric policies in place in the
Pacific by the end of FY23.
Delivered in FY23
• Achieved consistent digital offerings
• Launched parametric insurance pilot in Fiji and
Tonga
• Did not achieve our target of 1,000 parametric
policies in place due to the timing of the Fiji pilot
launch and subsequent roadshow, which took
place in the December 2022, half-way through
cyclone season. In FY23, 600 parametric policies
have been purchased for the FY24 cyclone
season. With the product now live across all
of Fiji and a pilot programme live in Tonga, we
expect to reach this target in FY24.
See pages 21, 22 and 24 for more information.
• 20% of
transactions in
the Pacific are
completed via
digital platform
• 1,000 parametric
policies in place
across three
countries by the
end of FY24.
• 40% of
transactions
in the
Pacific are
completed
via digital
platform
• 10,000
parametric
policies in
place across
five countries
by the end of
FY25.
Material impacts (continued)
ANNUAL REPORT 202353Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

STRATEGY
ALIGNMENT
MATERIAL TOPIC
OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS
SDG
ALIGNMENTMANAGING OUR IMPACTSDELIVERED IN FY23
FY24 TARGETS
AND INITIATIVES
TARGET FOR FY25
AND BEYOND
Go-to trusted
insurance
partner
(continued)
Transparent and fair insurance
We know that customers don’t always
understand their insurance and, transparency
of information is one of the most important
factors they take into account when deciding
on an insurance provider.
We recognise the need for clearly worded
and simple descriptions of insurance
products that help customers understand
what they’re covered for.
• We are working to ensure our policies
achieve the WriteMark plain English
standard
• Continually simplifying and improving
our customer self-service offering
through digitisation
• Digital platform provides transparency
of customers’ risks and pricing
• Tower is focused on putting things
right for customers who have received
incorrect discounts or benefits.
FY23 target
80% of all products are WriteMark certified by
end of FY23.
Delivered in FY23
• WriteMark target was achieved in New Zealand.
Work continues in the Pacific with 70% of products
now WriteMark certified in Fiji
• Embedded ways to save built into My Tower.
This gives customers practical and immediate
options to save on their premiums
• $6.2m excluding GST has been paid to customers
affected by multi-policy discount errors as at
31 October 2023.
See page 27 for more information.
• Continue to align
Pacific policy
documents with
the WriteMark
standard
• Embed sea-surge
and landslip risk
profiles in quote-
to-buy journey
and in My Tower.
• Target to be
developed.
Product development and innovation
Tower is committed to helping New Zealand
and the Pacific’s transition to a more
sustainable future.
Our greatest opportunity to support this aim
is by positively influencing and supporting our
customers through the services and products
we provide. We are working to ensure
our product development and innovation
supports climate change resilience and action.
We know traditional insurance products fail
to adequately support many Pacific people
who either do not have insurance or are
underinsured.
Innovating our products:
• Our parametric insurance product,
Cyclone Response Cover offers a level
of cover for those in the Pacific who
are excluded from traditional insurance
products
• Offering cover for electric and hybrid
vehicles, e-bikes and e-scooters
helps support the transition to more
sustainable forms of transport.
• Cyclone response cover product launched to
wider Fiji market and pilot launched in Tonga
• Launched new personal lines house, motor
and contents products in all Pacific countries
in which we operate
• 60% growth in electric vehicles (EVs) covered
• 34% growth in hybrid electric vehicles covered
See pages 21-25 for more information.
• Target to be
developed.
• Target to be
developed.
Data protection
The collection and use of personal and
non-personal data enables us to offer more
tailored insurance products and services,
including more personalised risk assessments.
We know that any misuse or loss of customer
data is likely to erode trust in the insurance
industry. Tower is committed to protecting our
customers’ and people’s data by having safe
data governance and practices in place.
• Our data governance framework
ensures we are able to take advantage
of opportunities to use data when they
arise, and this data is used appropriately
and effectively
• We have robust policies, processes and
technology in place to ensure data is
protected
• Tower is continuing to decommission
legacy systems which will reduce the
number of systems where customer
data is stored.
• Updated data risk governance framework
• Updated data retention policy and retention
schedules
• Updated third party data access register.
• Update
Information
Management
Policy
• Target to be
developed.
Material impacts (continued)
ANNUAL REPORT 202354Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

STRATEGY
ALIGNMENT
MATERIAL TOPIC
OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS
SDG
ALIGNMENTMANAGING OUR IMPACTSDELIVERED IN FY23
FY24 TARGETS
AND INITIATIVES
TARGET FOR FY25
AND BEYOND
Helping
communities
manage
climate
change
Managing the impacts of climate change
Tower is focused on managing the impacts
of climate change, both within our business
and for the communities we serve.
We can make a positive contribution to
mitigating climate change risks both through
our own operations, and by helping others
to manage their risks through our influence
as a Kiwi and Pacific business.
• We are continuing to expand our risk-
based pricing strategy to include more
climate-related hazards
• We manage financial impacts by
budgeting for increasing large events
in our planning and via our robust
reinsurance programme. See page 43
for more information.
• Participating in public dialogue on
climate change impacts and responses
• Sharing useful data about hazards and
risks
• Supporting climate change education
via our Waikato University Bachelor of
Climate Change Studies scholarship.
• Further expanded risk-based pricing by
implementing heightened risk selection
criteria for landslide risks
• Awarded two scholarships.
See page 25 for more information on
risk-based pricing.
Expand our hazard
model to include
landslide and
coastal hazards,
automated pricing
and underwriting
implemented
for these risks,
including
transparency
around risk ratings
for customers.
• Target to be
developed.
Corporate community citizenship
Our approach to employee wellbeing
extends to our people’s connection with
communities and the environment. By
encouraging our people to support projects
that align with their values and help the
community we can help foster a community
mindset within the organisation.
• We provide every employee with a
day of volunteering leave every year,
to contribute to initiatives that restore
the environment or have positive social
outcomes
• With current staff levels Tower has
7,200 volunteer hours available across
New Zealand and the Pacific per year
to make an impact.
• In late FY23 we refreshed and relaunched our
volunteering programme. While early days we
were pleased to have delivered 390 hours of
volunteering by Tower staff.
See page 37 for more information.
1,000 hours of
volunteering by
Tower staff.
• Target to be
developed.
Material impacts (continued)
ANNUAL REPORT 202355Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

STRATEGY
ALIGNMENT
MATERIAL TOPIC
OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS
SDG
ALIGNMENTMANAGING OUR IMPACTSDELIVERED IN FY23
FY24 TARGETS
AND INITIATIVES
TARGET FOR FY25
AND BEYOND
Thinking
ahead for
our planet
Carbon emissions
We take measuring and reducing our
emissions seriously as we recognise that
every effort to reduce emissions helps to
mitigate global warming. Our carbon impacts
reach well beyond the boundaries of our
own operational activities and include the
activities of our whole value chain, including
the suppliers we work with.
• Tower has set a science-based
reduction target of 21% over five years
from our 2020 base year.
• We are transitioning our fleet to electric
and hybrid vehicles
• We are exploring renewable energy
options for our Pacific premises
• Our Auckland head office is a six Green
Star rated building with advanced
carbon reduction technology in place
including solar
• We are encouraging different driving
patterns and behaviours in the Pacific
that reduce emissions
• We have incorporated the remote
working lessons from Covid and
reduced air travel substantially from
pre-Covid.
• Changes to vehicle fleet, driving habits
and an updated travel policy have
seen a reduction in fuel usage across
all locations despite the increased
headcount.
• 23% reduction in overall emissions.
See page 50 for more information.
• Establish a
process to
measure
emissions from
our underwriting
activities
• Establish a
process to
measure
emissions from
our supply chain
• Establish a
process and
measure
employee
commuting
emissions
• Review and
improve process
for measuring
working from
home emissions
• Review emissions
targets.
• 21% reduction
in emissions
from our
2020 base
year.
Corporate governance
We know that the decisions we make
have wide reaching implications for the
financial stability of New Zealand and
Pacific economies in terms of the risks we
cover and the suppliers we work with. That’s
why Tower is committed to achieving the
highest standards of corporate governance,
ethical behaviour, and accountability. We
are working to ensure the right culture is in
place to embed sustainability throughout our
business so we can have a positive influence
more broadly.
Tower is committed to achieving
the highest standards of corporate
governance, ethical behaviour and
accountability. Where developments
arise in corporate governance, the
Board reviews Tower’s practices and
incorporates changes where appropriate.
Tower’s relevant governance documents
and policies can be found on this
webpage: Policies and Documentation |
Tower Insurance NZ
• Developed climate change scenarios for Tower.
• Developed an understanding of our climate
change risks and opportunities.
See page 51 for more information.
Sustainability
education to be
rolled out for all
staff.
• Achieve
B Corp
certification.
Material impacts (continued)
ANNUAL REPORT 202356Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

STRATEGY
ALIGNMENT
MATERIAL TOPIC
OVERVIEW OF POTENTIAL AND ACTUAL IMPACTS
SDG
ALIGNMENTMANAGING OUR IMPACTSDELIVERED IN FY23
FY24 TARGETS
AND INITIATIVES
TARGET FOR FY25
AND BEYOND
Thinking
ahead for
our planet
Environmental footprint
We recognise that our business operations
contribute to waste, pollution and biodiversity
loss in addition to carbon emissions. We are
committed to understanding and managing
our broader environmental impacts.
• Our Auckland head office is a six Green
Star rated building with waste and water
reduction processes and technology,
including recycling composting, low
water toilets.
• Tower took a ‘reuse’ first approach to the
decommission of our existing Suva office with
almost all of the chattels and furniture either
re-used in the new site or where feasible
donated to the local community. We are also
replacing the existing fluorescent lighting with
LED100 laptops and other peripheral hardware
repurposed, reducing total hardware asset
volumes.
• Measure waste
across all Tower
sites, set reduction
target
• Measure water
use across
all sites, set
reduction target.
• Preparation
for Taskforce
for Nature
Based
Financial
Disclosures
(TNFD)
• Work to
understand
our role in
measuring
and mitigating
biodiversity
loss through-
out our value
chain.
Responsible investment
As an institutional investor Tower can
help support the market for responsible
investment products. Our ability to invest in
products such as green tech is limited due
to Tower’s conservative investment policy
which is focused on high liquidity bonds,
and a short duration to ensure availability
of funds for paying claims.
We are currently building our
understanding of the ESG impacts
of our investments. This includes
determining the proportion of issuers
who have ESG initiatives in place
such as: ESG strategies, climate and
nature-based reporting, commitments
to eliminate modern slavery, science-
based emissions targets and Net Zero
commitments.
The investment community is in the early
stages of this data capture and reporting,
and we will continue to work with our
partners as this capability matures.
Began working with investment partners
to understand our ESG impacts.
Measure and
baseline carbon
emissions from our
investment portfolio.
• Develop a
strategy for
managing
investment
portfolio
emissions
• Establish
reporting for
other ESG
impacts.
Material impacts (continued)
ANNUAL REPORT 202357Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

Board of Directors
Michael Stiassny
LLB, BCom, CFInstD
Chairman
Non-Executive Director
Independent
Director from: 12 October 2012
Michael holds both a Commerce and Law degree
from the University of Auckland and is a Chartered
Fellow and past President of the Institute of Directors.
Michael has enjoyed a high-profile governance career
and is currently Chairman of 2 Cheap Cars Group
Limited, and director of Momentum Life Insurance
Limited, Tegel Group Holdings Limited, and New
Talisman Gold Mines Limited.
With a keen interest in fostering successful next
generation New Zealand businesses, Michael
also dedicates significant time to start ups and
championing entrepreneurship through his
involvement in Founders Advisory.
Michael resides in Auckland — New Zealand.
Graham Stuart
BCom (Hons), MS, FCA
Non-Executive Director
Independent
Director from: 24 May 2012
Graham is an experienced Director, with over 30 years’
experience in governance roles in New Zealand and
internationally. He is currently the Chair of NorthWest
Healthcare Property Management Limited and Comhla
Vet Limited and, a Director of VinPro Limited. Previous
executive roles include Sealord Group CEO, Fonterra
Co-operative Group CFO and Director of Strategy and,
Lion Nathan International Managing Director.
Graham has a Bachelor of Commerce (First Class Hons)
from the University of Otago, a Master of Science from
Massachusetts Institute of Technology and is a Fellow
of Chartered Accountants Australia and New Zealand.
He has served on multiple Government bodies including
the Food & Beverage Taskforce, Māori Economic
Development Panel and as Chair of the Lincoln Hub
Establishment Board.
Graham resides in Auckland — New Zealand.
Geraldine McBride
BSc
Non-Executive Director
Independent
Director from: 1 October 2022
Geraldine has extensive governance and technology
industry experience, having performed Board and senior
leadership roles both in New Zealand and internationally,
with Sky Network Television Limited, SAP, Dell, IBM,
National Australia Bank and Fisher & Paykel Healthcare.
Geraldine is the founder and CEO of MyWave. Geraldine
holds a Bachelor of Science from Victoria University and
is a Chartered Member of the NZIOD.
Geraldine resides in Christchurch — New Zealand.
ANNUAL REPORT 202358Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

Marcus Nagel
MBA (International Management),
MBA (Banking and Finance)
Non-Executive Director
Non-independent
Director from: 14 January 2019
Marcus has significant insurance industry experience.
For a decade he has performed senior leadership roles
for Zurich in Europe and globally. In his last role at
Zurich, he served as the Chief Executive Officer of Zurich
Germany managing both life insurance and general
insurance businesses. Marcus holds a Master’s Degree in
Banking and Finance from Goethe University in Frankfurt,
Germany and Master of International Management
from the Arizona State University Thunderbird School of
Global Management in Arizona, United States of America.
Marcus was nominated by Bain Capital Credit LP
(Bain Capital) to represent Bain Capital’s stake in Tower
(Bain Capital hold 20.00% of Tower’s ordinary shares)
and his appointment was supported by the Tower Board.
Marcus resides in Schindellegi — Switzerland.
Blair Turnbull
BCom, PGDipCom
Executive Director
Non-independent
Director from: 29 March 2023
Blair Turnbull joined Tower Insurance as CEO in 2020,
bringing with him 25 years of insurance and financial
services experience from across NZ & Australia, Asia,
UK, and Europe. He joined the Board in March 2023
pending the appointment of a new Independent Director.
Prior to joining Tower, Blair was Managing Director,
Digital & Retail, UK & International at Aviva, Britain’s
largest general insurer. Prior to this, he was Executive
General Manager, Wealth and Insurance at ASB Bank.
Blair’s focus is on continuing to accelerate Tower’s
modernisation. He has extensive international
experience, with a proven global track record in using
data to deliver disruptive customer-focussed models
in a proactive way. Blair retired from the Board on
17 November 2023 following the appointment of
Mike Cutter as an Independent Director.
Blair resides in Auckland — New Zealand.
Mike Cutter
BSc (Hons) GAICD
Non Executive Director
Independent
Director from: 17 November 2023
Mike has significant experience in a range of financial
services businesses in Australia, New Zealand,
Asia and Europe. He is the Chair of Arteva Funding,
and a Non-Executive Director of both Sezzle and Pepper
Money. He is the co-founder of Kadre, a credit risk
management consultancy.
Mike has recently served as interim Managing Director
for Bambora Aus and was previously the Group Managing
Director for Equifax ANZ. Before this he held various
senior roles with GE, ANZ, Wesfarmers/OAMPS Insurance
Brokers, Halifax/BankOne and NAB.
Mike is a Senior Fellow of Financial Services Institute of
Australia. He has served on the Boards of the Women’s
Cancer Foundation, Ovarian Cancer Institute, the Australian
Finance Congress, the National Insurance Brokers
Association and the Australian Retail Credit Association.
Mike resides in Melbourne – Australia.
ANNUAL REPORT 202359Our strategy2023 in reviewWeather eventsConsolidated financial statementsCorporate governanceGRI content index ContentsSustainability

ANNUAL REPORT 202360Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

CONSOLIDATED
FINANCIAL
STATEMENTS
61ANNUAL REPORT 2023Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

Financial Statements
Consolidated statement of comprehensive income
63
Consolidated balance sheet
64
Consolidated statement of changes in equity65
Consolidated statement of cash flows66
Notes to the consolidated financial statements
1Overview67
1.1About this report67
1.2Consolidation67
1.3Critical accounting judgements and estimates69
1.4Segmental reporting69
2Underwriting activities70
2.1Underwriting revenue70
2.2Net claims expense71
2.3Underwriting expense71
2.4Net outstanding claims72
2.5Unearned premium liability77
2.6Deferred insurance costs78
2.7Receivables79
2.8Payables80
2.9Provisions80
2.10Assets backing insurance liabilities80
3Investments and other income81
3.1Investment income81
3.2Investments81
3.3Other income82
4Risk management82
4.1Risk management overview82
4.2Strategic risk83
4.3Insurance risk83
4.4Credit risk84
4.5Market risk85
4.6Liquidity risk87
4.7Capital management risk87
4.8Operational risk88
4.9Regulatory and compliance risk88
4.10Conduct risk88
4.11Cyber risk88
4.12Climate change risk89
5Capital structure89
5.1Contributed equity89
5.2Reserves90
5.3Net tangible assets per share90
5.4Earnings per share90
5.5Dividends90
6Other balance sheet items91
6.1Property, plant and equipment91
6.2Intangible assets92
6.3Leases94
7Tax 96
7.1Tax expense96
7.2Current tax97
7.3Deferred tax97
7.4Imputation credits99
8Other information99
8.1Notes to the consolidated statement of cash flows99
8.2Related party disclosures100
8.3Auditor's remuneration101
8.4Assets and liabilities held for sale101
8.5Tower Long-Term Incentive Plan103
8.6Contingent liabilities104
8.7Subsequent events104
8.8Capital commitments104
8.9Impact of new accounting standards and changes in interpretation of current standards104
Independent Auditor's report, and Appointed Actuary's report
Independent Auditor's report106
Appointed Actuary's report111
ANNUAL REPORT 202362Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

Consolidated statement of comprehensive income
FOR THE YEAR ENDED 30 SEPTEMBER 2023
NOTE
2023
$000
RE-PRESENTED
2022
$000
Gross written premium 511,484 436,593
Unearned premium movement(40,671)(26,992)
Gross earned premium 2.1 470,813 409,601
Outward reinsurance premium(82,030)(62,128)
Movement in deferred reinsurance premium(368)(151)
Outward reinsurance premium expense(82,398)(62,279)
Net earned premium 388,415 347,322
Claims expense(492,197)(238,293)
Less: Reinsurance and other recoveries revenue2.1205,187 15,109
Net claims expense2.2(287,010)(223,184)
Gross commission expense(12,342)(13,528)
Commission revenue2.1 4,636 4,725
Net commission expense(7,706)(8,803)
Underwriting expense2.3(105,354)(91,852)
Underwriting (loss)/profit(11,655) 23,483
Investment income3.1 14,627 1,480
Investment expenses(298)(338)
Other income3.35,727 1,304
Other expenses(44)(63)
Financing and other costs(920)(890)
Profit before taxation from continuing operations7,437 24,976
Tax expense7.1(5,085)(7,483)
Profit after taxation from continuing operations2,352 17,493
(Loss)/profit after taxation from discontinued operations8.4(3,580)1,362
(Loss)/profit after taxation for the year (1,228)18,855
NOTE
2023
$000
RE-PRESENTED
2022
$000
Items that may be reclassified to profit or loss
Currency translation differences(1,487)3,948
Reclassification of the foreign currency translation reserve8.4544 –
Other comprehensive (loss)/profit net of tax(943)3,948
Total comprehensive (loss)/profit for the year(2,171)22,803
Earnings per share:
Basic and diluted earnings per share (cents) for continuing
operations
5.40.6 4.4
Basic and diluted earnings per share (cents)5.4(0.3)4.7
(Loss)/profit after taxation attributed to:
Shareholders(1,228)18,803
Non-controlling interests – 52
(1,228)18,855
Total comprehensive (loss)/profit attributed to:
Shareholders (2,171)22,737
Non-controlling interests – 66
(2,171)22,803
The above statement should be read in conjunction with the accompanying notes.
ANNUAL REPORT 202363Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

Consolidated balance sheet
AS AT 30 SEPTEMBER 2023
NOTE
2023
$000
2022
$000
Assets
Cash and cash equivalents8.164,009 84,502
Investments3.2258,798 258,634
Receivables 2.7413,826 242,089
Current tax asset7.2a12,917 13,069
Assets classified as held for sale8.413,697 20,811
Deferred tax asset7.3a14,971 23,893
Deferred insurance costs2.639,951 37,819
Right-of-use assets6.3a(i)23,204 23,326
Property, plant and equipment 6.16,280 5,417
Intangible assets6.298,524 94,653
Total assets946,177 804,213
Liabilities
Payables2.877,032 58,911
Unearned premiums2.5272,834 238,116
Outstanding claims2.4240,597 124,531
Current tax liabilities7.2b198 136
Liabilities classified as held for sale8.49,765 9,258
Provisions2.912,823 11,873
Lease liabilities6.3a(ii)32,615 35,054
Deferred tax liabilities7.3b48 8,806
Total liabilities645,912 486,685
Net assets300,265 317,528
NOTE
2023
$000
2022
$000
Equity
Contributed equity5.1460,315 460,191
Accumulated losses(55,949)(41,212)
Reserves5.2(104,101)(101,451)
Total equity300,265 317,528
The above statement should be read in conjunction with the accompanying notes.
The financial statements were approved for issue by the Board on 23 November 2023.
Michael P Stiassny Graham R Stuart
Chairman Director
ANNUAL REPORT 202364Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

Consolidated statement of changes in equity
YEAR ENDED 30 SEPTEMBER 2023
ATTRIBUTED TO SHAREHOLDERS
NOTE
CONTRIBUTED
EQUITY
$000
ACCUMULATED
LOSSES
$000
RESERVES
$000
NON-CONTROLLING
INTEREST
$000
TOTAL EQUITY
$000
Year Ended 30 September 2023
Balance as at 30 September 2022460,191 (41,212)(101,451) – 317,528
Comprehensive loss
Loss for the year – (1,228) – – (1,228)
Currency translation differences – – (1,487) – (1,487)
Reclassification of foreign currency translation reserve to profit and loss8.4 – – 544 – 544
Revaluation surplus transferred to retained earnings5.2 – 1,707 (1,707) – –
Total comprehensive loss – 479(2,650) – (2,171)
Transactions with shareholders
Dividend payment5.5 – (15,216) – – (15,216)
Share rights issued under Tower Long-Term Incentive Plan8.5124 – – – 124
Total transactions with shareholders124 (15,216) – – (15,092)
At the end of the year460,315 (55,949)(104,101)–300,265
Year Ended 30 September 2022
Balance as at 30 September 2021 492,424 (39,995)(105,385) 2,676 349,720
Comprehensive income
Profit for the year – 18,803 – 52 18,855
Currency translation differences – – 3,934 14 3,948
Total comprehensive income – 18,803 3,934 66 22,803
Transactions with shareholders
Capital return to shareholders5.1(30,634) – – – (30,634)
Purchase of non-controlling interests5.1(1,599) – – (2,742)(4,341)
Dividend payment5.5 – (20,028) – – (20,028)
Other – 8 – – 8
Total transactions with shareholders(32,233)(20,020) – (2,742)(54,995)
At the end of the year460,191 (41,212)(101,451)–317,528
The above statement should be read in conjunction with the accompanying notes.
ANNUAL REPORT 202365Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

Consolidated statement of cash flows
FOR THE YEAR ENDED 30 SEPTEMBER 2023
NOTE
2023
$000
RE–PRESENTED
2022
$000
Cash flows from operating activities
Premiums received 471,171 416,245
Interest received 11,612 6,520
Fee and other income received6,322 3,588
Reinsurance and other recoveries received74,563 11,968
Reinsurance paid(61,595)(51,940)
Claims paid(380,732)(236,492)
Employee and supplier payments(94,432)(83,906)
Income tax paid(1,802)(1,783)
Operating activities cashflow from discontinued operations(15,144)(4,416)
Net cash inflow from operating activities8.1 9,963 59,784
Cash flows from investing activities
Proceeds from sale of interest bearing investments256,573 182,145
Payments for purchase of interest bearing investments(254,814)(181,578)
Payments for purchase of intangible assets (15,298)(14,695)
Payments for purchase of customer relationships6.2(5,900)(6,089)
Payments for purchase of property, plant & equipment (2,419)(2,100)
Proceeds from sale of property, plant & equipment8.4 5,746 –
Proceeds from sale of discontinued operation (net of
cash disposed)
8.4 2,618 –
Investing activities cashflow from discontinued operations1,216 (1,353)
Net cash outflow from investing activities(12,278)(23,670)
NOTE
2023
$000
RE–PRESENTED
2022
$000
Cash flows from financing activities
Payments for capital return to shareholders – (30,634)
Purchase of non-controlling interests – (4,341)
Dividends paid(15,216)(20,028)
Facility fees and interest paid(928)(909)
Payments relating to lease liabilities6.3 (6,845)(5,852)
Financing activities cashflow from discontinued operations(190)(1,946)
Net cash outflow from financing activities(23,179)(63,710)
Net decrease in cash and cash equivalents(25,494)(27,596)
Effect of foreign exchange rate changes(1,493)3,765
Cash and cash equivalents at the beginning of the year 92,298 116,129
Cash and cash equivalents at the end of the year 65,311 92,298
Cash from discontinued operations 8.4 (1,302)(7,796)
Cash and cash equivalents at the end of the year
from continuing operations64,009 84,502
The above statement should be read in conjunction with the accompanying notes.
ANNUAL REPORT 202366Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

1 Overview
This section provides information that is helpful to an overall understanding of the financial statements
and the areas of critical accounting judgements and estimates included in the financial statements. It also
includes a summary of Tower’s operating segments.
1.1 About this Report
a. Entities reporting
The financial statements presented are those of Tower Limited (the Company) and its subsidiaries.
The Company and its subsidiaries together are referred to in this financial report as Tower or the Group.
The address of the Company’s registered office is 136 Fanshawe Street, Auckland, New Zealand.
During the periods presented, the principal activity of the Group was the provision of general insurance. The
Group predominantly operates in New Zealand with some of its operations based in the Pacific Islands region.
The financial statements were authorised for issue by the Board of Directors on 23 November 2023. The entity’s
owners or others do not have the power to amend the financial statements after issue.
b. Statutory base
Tower Limited is a company incorporated in New Zealand under the Companies Act 1993 and listed on the
NZX Main Board and the Australian Securities Exchange. The Company is a reporting entity under Part 7 of the
Financial Markets Conduct Act 2013.
c. Basis of preparation
The Company is a for-profit entity and the financial statements have been prepared in accordance with
New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply with International Financial
Reporting Standards (IFRS), New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS)
and other applicable financial reporting standards, as appropriate for Tier 1 for-profit entities.
The financial statements of the Group have been prepared in accordance with the requirements of Part 7 of
the Financial Markets Conduct Act 2013 and the NZX Main Board Listing Rules.
The Group financial statements are presented in New Zealand dollars and rounded to the nearest thousand
dollars. They have been prepared in accordance with the historical cost basis except for certain financial
instruments that are stated at their fair value.
Notes to the consolidated financial statements
d. Re-presentation of comparatives
The Group’s Papua New Guinea Operations (disposal group) constitutes a discontinued operation which was
disposed in the year ended 30 September 2023.
Select operations in Pacific (disposal groups) where Tower has begun the process to divest its operations also
constitute discontinued operations and are classified as held for sale as at 30 September 2023.
All disposal groups together form the “discontinued operations”. Profit or loss information for the current period
is prepared on a continuing basis with net results from discontinued operations presented separately. Profit or
loss information for 2022 has been re-presented for comparability. Refer to note 8.4 for further details.
Where necessary, comparative information has been reclassified for consistency with the current year presentation.
1.2 Consolidation
a. Principles of consolidation
The Group financial statements incorporate the assets and liabilities of all subsidiaries of the Company at
balance date and the results of all subsidiaries for the year.
Subsidiaries are those entities over which the consolidated entity has control, being power over the investee;
exposure, or rights to variable returns from its involvement with the investee; and the ability to use its power
over the investee to affect the amount of the investor’s returns.
The results of any subsidiaries acquired during the year are consolidated from the date on which control
was transferred to the consolidated entity and the results of any subsidiaries disposed of during the year are
consolidated up to the date control ceased.
The acquisition of controlled entities from external parties is accounted for using the acquisition method
of accounting. Non-controlling interests in the results and equity of subsidiaries are shown separately in
the statement of comprehensive income, statement of changes in equity and balance sheet respectively.
Acquisition related costs are expensed as incurred.
When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the
date when control is lost, with the change in carrying amount recognised in profit or loss.
Intercompany transactions and balances between Group entities are eliminated on consolidation.
ANNUAL REPORT 202367Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

b. Foreign currency
(i) Functional and presentation currencies
The financial statements of each Group entity are presented in the currency of the primary economic
environment in which the entity operates. The Group financial statements are presented in New Zealand
dollars and rounded to the nearest thousand dollars unless stated otherwise.
(ii) Transactions and balances
In preparing the financial statements of the individual entities, transactions denominated in foreign currencies
are translated into the entities’ functional and reporting currency using the exchange rates in effect at the
transaction dates. Monetary items receivable or payable in a foreign currency are translated at reporting
date at the closing exchange rate.
Translation differences on non-monetary items such as financial assets held at fair value through profit or
loss are reported as part of their fair value gain or loss.
Exchange differences arising on the settlement or retranslation of monetary items at year end exchange
rates impact profit after tax in the consolidated statement of comprehensive income unless the items
form part of a net investment in a foreign operation. In this case, exchange differences are taken to the
foreign currency translation reserve and recognised (as part of comprehensive profit) in the statement
of comprehensive income and the statement of changes in equity.
(iii) Consolidation
For the purpose of preparing consolidated financial statements the assets and liabilities of subsidiaries
with a functional currency different to the Company are translated at the closing rate at the balance date.
Income and expense items for each subsidiary are translated at a weighted average of exchange rates over
the period, as a surrogate for the spot rates at transaction dates. Foreign currency translation differences
are taken to the foreign currency translation reserve and recognised in the statement of comprehensive
income and the statement of changes in equity.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets
and liabilities of the foreign operation and are translated at the closing rate with movements recorded
through the foreign currency translation reserve in the statement of changes in equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that
particular foreign operation is recognised in the statement of comprehensive income.
c. Subsidiaries
The table below lists Tower Limited’s principal subsidiary companies and controlled entities. All entities have a
balance date of 30 September.
HOLDINGS
NAME OF COMPANYINCORPORATION20232022
Parent Company
New Zealand general insurance operations
Tower LimitedNZParentParent
Subsidiaries
Overseas general insurance operations
Tower Insurance (Cook Islands) LimitedCook Islands100%100%
Tower Insurance (Fiji) LimitedFiji100%100%
Tower Insurance (PNG) Limited (refer note 8.4)PNG0%100%
National Pacific Insurance Limited (NPI)Samoa100%100%
National Pacific Insurance (Tonga) LimitedTonga100%100%
National Pacific Insurance (American Samoa)
Limited
American Samoa100%100%
Tower Insurance (Vanuatu) LimitedVanuatu100%100%
Management service operations
Tower Services LimitedNZ100%100%
Tower Group Services (Fiji) Pte Limited*Fiji100%100%
* National Insurance Company (Holdings) Pte Limited has had its name changed to Tower Group Services (Fiji) Pte Limited
on 26 May 2023.
1.2 Consolidation (continued)
ANNUAL REPORT 202368
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

1.3 Critical accounting judgements and estimates
In preparing these financial statements management is required to make estimates and related assumptions
about the future. The estimates and related assumptions are based on experience and other factors that are
considered to be reasonable, and are reviewed on an ongoing basis. Revisions to the estimates are recognised
in the period in which they are revised, or future periods if relevant. The key areas in which estimates and
related assumptions are applied are as follows:
—Net outstanding claims note 2.4
—Liability adequacy test note 2.5
—Intangible assets note 6.2
—Lease liabilities (incremental borrowing rate) note 6.3a(ii)
—Deferred tax note 7.3
—Customer remediation provision note 2.9
1.4 Segmental reporting
a. Operating segments
Tower operates in two geographical segments, New Zealand and the Pacific region. New Zealand comprises
the general insurance business underwritten in New Zealand. Pacific Islands comprises the general insurance
business underwritten in the Pacific by Tower subsidiaries and branch operations. Other contains balances
relating to Tower Services Limited and group diversification benefits.
The Group does not derive revenue from any individual or entity that represents 10% or more of the Group’s
total revenue.
The financial performance for Pacific Islands operating segment excludes the disposal groups. The prior year
comparatives have been re-presented accordingly. Intercompany transactions with the disposal group are
eliminated within continuing operations, refer note 8.4.
b. Financial performance of continuing operations
NEW ZEALAND
$000
PACIFIC ISLANDS
$000
OTHER
$000
TOTAL
$000
Year Ended 30 September 2023
Gross written premium468,788 42,696 – 511,484
Gross earned premium427,907 42,906 – 470,813
Outward reinsurance premium expense(70,199)(12,199) – (82,398)
Net earned premium357,708 30,707 – 388,415
Net claims expense(274,538)(12,123)(349)(287,010)
Net commission expense(6,844)(862) – (7,706)
Underwriting expense(96,431)(8,923) – (105,354)
Underwriting (loss)/profit(20,105)8,799 (349)(11,655)
Net investment income13,622 707 – 14,329
Other income and expenses4,204 (70)629 4,763
(Loss)/profit before taxation from
continuing operations(2,279)9,436 280 7,437
(Loss)/profit after taxation from
continuing operations(4,709)6,781 280 2,352
Year Ended 30 September 2022 (Re-presented)
Gross written premium395,490 41,103 – 436,593
Gross earned premium369,871 39,730 – 409,601
Outward reinsurance premium expense(51,026)(11,253) – (62,279)
Net earned premium318,845 28,477 – 347,322
Net claims expense(207,184)(16,346)346 (223,184)
Net commission expense(8,048)(755) – (8,803)
Underwriting expense(82,744)(9,108) – (91,852)
Underwriting profit20,869 2,268 346 23,483
Net investment income1,023 119 – 1,142
Other income and expenses192 159 – 351
Profit before taxation from
continuing operations22,084 2,546 346 24,976
Profit after taxation from
continuing operations14,989 2,158 346 17,493
ANNUAL REPORT 202369
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

2 Underwriting activities
This section provides information on Tower’s underwriting activities.
Tower collects premiums from customers in exchange for providing insurance coverage. These
premiums are recognised as revenue when they are earned by Tower, with a liability for unearned
premiums recognised on the balance sheet.
When customers suffer a loss that is covered by their policy, Tower will make payments to customers
or suppliers, which it recognises as claims expenses. To ensure Tower’s obligations to customers are
properly recorded within the financial statements, Tower recognises provisions for outstanding claims.
To manage Tower’s risk and optimise its returns, Tower reinsures some of its exposure with reinsurance
companies. The premiums paid to reinsurers are recognised as an expense, while recoveries from
reinsurers are recognised as revenue.
2.1 Underwriting Revenue
Composition
2023
$000
2022
$000
Gross written premium 511,484 436,593
Movement in unearned premium liability(40,671)(26,992)
Gross earned premium 470,813 409,601
Reinsurance and other recoveries revenue 205,187 15,109
Reinsurance commission 2,853 3,590
Insurance administration services commission 1,783 1,135
Commission revenue 4,636 4,725
Underwriting revenue 680,636 429,435
c. Financial position of continuing operations
NEW ZEALAND
$000
PACIFIC ISLANDS
$000
OTHER
$000
TOTAL
$000
Additions to non-current assets
30 September 2023
24,081 6,319 –30,400
Additions to non-current assets
30 September 2022
29,547 883 (4,327)26,103
Total assets 30 September 2023892,003 65,484 (25,007)932,480
Total assets 30 September 2022723,805 74,539 (14,942)783,402
Total liabilities 30 September 2023605,797 41,657 (11,307)636,147
Total liabilities 30 September 2022
426,930 51,462 (965)477,427
Additions to non-current assets include additions to property, plant and equipment, right-of-use assets,
intangible assets and investments in subsidiaries.
Total assets and liabilities exclude assets and liabilities held for sale.
Definition
An operating segment is a group of assets and operations engaged in providing products or services
that are subject to risks and returns that are different to those of other operating segments. Operating
segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker (the Chief Executive Officer) who reviews the operating results on a regular basis and
makes decisions on resource allocation and assessing performance.
1.4 Segmental reporting (continued)
ANNUAL REPORT 202370
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

Recognition and measurement
Gross earned premium is recognised in the period in which the premiums are earned during the term
of the contract, excluding taxes and levies collected on behalf of third parties. It includes a provision for
expected future premium cancellations (which is offset against gross premium receivables, see note 2.7),
and customer remediation (see note 2.9). The proportion of premiums not earned in the consolidated
statement of comprehensive income at reporting date is recognised in the consolidated balance sheet
as unearned premiums.
Reinsurance and other recoveries on paid claims, reported claims not yet paid, claims incurred but
not reported and claims incurred but not enough reported are recognised as revenue. Recoveries are
measured as the expected future receipts and recognised when the claim is incurred.
Reinsurance commission revenue includes reimbursements by reinsurers to cover part of Tower’s
management and sales expense over the term of the reinsurance agreements. Reinsurance commission
income can also include a proportion of expected profitability of business ceded to the reinsurer.
The final value of the variable commission is based on the achievement of a hurdle rate over time.
This revenue is recognised over the term of the reinsurance agreements dependent on the profitability
of proportional arrangement which is reassessed at each reporting date.
Insurance administration services commission includes a percentage of levies collected on behalf
of third parties and is recognised at the point the levy is collected.
2.2 Net claims expense
Composition
EXC. CANTERBURY
EARTHQUAKE
CANTERBURY
EARTHQUAKETOTAL
2023
$000
2022
$000
2023
$000
2022
$000
2023
$000
2022
$000
Gross claims expense491,636 229,180 561 9,113 492,197 238,293
Reinsurance and other
recoveries revenue
(206,348)(13,479)1,161 (1,630)(205,187)(15,109)
Net claims expense285,288 215,701 1,722 7,483 287,010 223,184
2.1 Underwriting Revenue (continued)
Net claims expense includes the impact of several large events that occurred during the year ended 30 September
2023: January’s Auckland and upper North Island weather event, Cyclone Gabrielle in February, Cyclones Judy
and Kevin in Vanuatu in March (included within discontinued operations), and the Auckland floods on 9 May.
The net claims expense for large events totals $38m (excluding costs of reinstating reinsurance cover). The cost
of reinstating reinsurance coverage after these events is recorded within outward reinsurance premiums.
Recognition and measurement
Net claims expense is measured as the difference between net outstanding claims liability at the
beginning and end of the financial year plus any claims payments made, net of reinsurance and
other recoveries received during the financial year. Please refer to note 2.4 for more information.
Additional disclosures related to the Canterbury earthquake events in 2010 and 2011 are provided in note 2.4.
2.3 Underwriting expense
Composition
2023
$000
2022
$000
People costs85,429 83,615
People costs capitalised during the year(9,562)(7,557)
Technology 16,372 14,549
Amortisation 17,327 14,723
Depreciation*5,836 4,762
External fees11,766 10,502
Marketing13,128 11,745
Communications3,361 2,894
Miscellaneous3,814 3,066
Movement in deferred acquisition costs(4,167)(6,310)
Claims related management expenses reclassified to claims expense(36,208)(36,842)
Service fees charged to discontinued operations**(1,742)(3,295)
Underwriting expenses105,354 91,852
* Includes $4.0m (2022: $2.7m) of depreciation on right-of-use assets. See note 6.3b for further information.
** Refer note 8.4 for further detail.
ANNUAL REPORT 202371
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

2.4 Net outstanding claims
a. Composition
EXC. CANTERBURY EARTHQUAKECANTERBURY EARTHQUAKETOTAL
2023
$000
2022
$000
2023
$000
2022
$000
2023
$000
2022
$000
Central estimate of future cash flows204,552 89,404 13,822 18,056 218,374 107,460
Claims handling expense11,727 5,564 699 772 12,426 6,336
Risk margin5,170 5,051 4,627 5,684 9,797 10,735
Gross outstanding claims221,449 100,019 19,148 24,512 240,597 124,531
Reinsurance recoveries(116,827)(10,293)(2,329)(3,787)(119,156)(14,080)
Net outstanding claims104,622 89,726 16,819 20,725 121,441 110,451
Net claim payments within 12 months89,168 76,422 6,896 8,497 96,064 84,919
Net claim payments after 12 months15,454 13,304 9,923 12,228 25,377 25,532
Net outstanding claims104,622 89,726 16,819 20,725 121,441 110,451
Recognition and measurement
Gross outstanding claims liability comprises a central estimate of future cash outflows and a risk margin
for uncertainty.
The outstanding claims liability is measured at the central estimate of future cash outflows relating to
claims incurred prior to the reporting date including direct and indirect claims handling costs. The liability
is measured based on the advice of the Appointed Actuary or on valuations which have been peer
reviewed by the Appointed Actuary. It is intended to include no deliberate or unconscious bias toward
over or under-estimation. Given the uncertainty in establishing the liability, it is likely the final outcome
will differ from the original liability established. Changes in the claim estimates are recognised in profit
or loss in the reporting period in which the estimates are changed.
The gross outstanding claim liabilities also include a risk margin that relates to the inherent uncertainty
in the central estimate of the future payments. The risk margin represents the amount by which the
liability recognised in the financial statements is greater than the actuarial estimate. Tower currently
applies a 75% probability of adequacy to the outstanding claims liability which means there is a 1-in-4
chance all future claim payments will exceed the overall reserve held.
In the current and prior years, discounting has been applied to the provision for outstanding claims
relating to the Canterbury earthquakes, using spot rates derived from government-issued bonds.
In the current year, discounting has also been applied to the provision for other outstanding claims,
whereas in the prior year the net impact of discounting on other outstanding claims was considered
to be immaterial.
Uncertainties surrounding the liability estimation process include those relating to the available data,
actuarial models and assumptions, the statistical uncertainty associated with the general insurance run-
off process and external risks.
Net outstanding claims liability is calculated by deducting reinsurance and other recoveries from gross
outstanding claims. Reinsurance and other recoveries on outstanding claims are recognised as income
with the corresponding asset being recognised on the balance sheet.
ANNUAL REPORT 202372
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

b. Reconciliation of movements in net outstanding claims liability
2023
$000
2022
$000
GROSSREINSURANCENETGROSSREINSURANCENET
Balance brought forward124,531 (14,080)110,451 122,338 (22,850)99,488
Claims expense - current year505,493 (218,959)286,534 248,024 (20,429)227,595
Claims expense - prior year7,807 2,19810,005 (5,970)4,491 (1,479)
Incurred claims recognised in profit or loss from continuing operations492,197 (205,187)287,010 240,147 (15,243)224,904
Incurred claims recognised in profit or loss from discontinued operations **21,103 (11,574)9,529 1,907 (695)1,212
Claims paid and reinsurance and other recoveries raised from continuing and discontinued operations(393,968)108,442 (285,526)(239,706)24,604 (215,102)
Foreign exchange759 (53)706 1,826 (347)1,479
Liabilities reclassified as held for sale*(4,025)3,296 (729)(1,981)451 (1,530)
Outstanding claims240,597 (119,156)121,441 124,531 (14,080)110,451
* Refer note 8.4
** The prior year comparatives have not been represented.
2.4 Net outstanding claims (continued)
ANNUAL REPORT 202373
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

c. Development of claims
The following table shows the development of net outstanding claims relative to the current estimate of ultimate claims costs for the five most recent years.
ULTIMATE CLAIMS COST ESTIMATE
PRIOR
$000
2019
$000
2020
$000
2021
$000
2022
$000
2023
$000
TOTAL
$000
At end of incident year146,166 155,989 182,118 198,315 263,519
One year later143,154 152,577 180,651 204,941 –
Two years later142,405 151,261 182,203 – –
Three years later142,429 151,115 – – –
Four years later142,464 – – – –
Ultimate claims cost142,464 151,115 182,203 204,941 263,519
Cumulative payments(142,393)(149,692)(178,881)(198,103)(182,495)
Undiscounted net central estimate13,898 71 1,423 3,322 6,838 81,024 106,576
Claims handling expense12,426
Risk margin9,797
Discount to present value(7,358)
Net outstanding claim liabilities121,441
Reinsurance recoveries119,156
Gross outstanding claim liabilities240,597
All amounts in this note exclude discontinued operations, consistent with other profit or loss disclosures.
Prior year numbers have been restated at current year exchange rates to reflect the underlying development of claims.
2.4 Net outstanding claims (continued)
ANNUAL REPORT 202374
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

d. Actuarial information
The estimation of outstanding claims as at 30 September 2023 has been carried out by:
(i) Geoff Atkins, BA (ActuarDc), FIAA, FIAL, FANZIIF, Appointed Actuary - Canterbury earthquake claims; and
(ii) John Feyter, B.Sc., FNZSA - all other outstanding claims
The New Zealand actuarial assessments are undertaken in accordance with the standards of the New Zealand
Society of Actuaries, in particular Professional Standard No. 30 “Valuations of General Insurance Claims”.
The Actuaries were satisfied as to the nature, sufficiency and accuracy of the data used to determine the
outstanding claims liability. The outstanding claims liability is set by the Actuaries at a level that is appropriate
and sustainable to cover the Group’s claims obligations after having regard to the prevailing market
environment and prudent industry practice.
e. Canterbury earthquakes
Cumulative impact of Canterbury earthquakes
As at 30 September 2023, Tower has 23 claims remaining to settle (2022: 36) as a result of the earthquakes
impacting the Canterbury region during 2010 and 2011. The following table presents the cumulative impact
of the four main Canterbury earthquake events on the consolidated statement of comprehensive income.
2023
$000
2022
$000
Earthquake claims estimate net of EQC payments954,175 953,531
Reinsurance recoveries(732,643)(733,720)
Claim expense net of reinsurance recoveries221,532 219,811
Reinsurance expense25,045 25,045
Cumulative impact of Canterbury earthquakes before tax246,577 244,856
Income tax(69,042)(68,560)
Cumulative impact of Canterbury earthquakes after tax177,535 176,296
Canterbury earthquake impact on profit or loss before tax
2023
$000
2022
$000
Net claims expense 1,722 7,483
f. Critical accounting estimates and judgements
Outstanding claims liability (excluding Canterbury Earthquakes)
The estimation of the outstanding claims liability involves a number of key assumptions. Tower’s estimation
uses Company-specific data, relevant industry data and general economic data for each major class of
business. The estimation process factors in a number of considerations including the risks to which the
business is exposed to at a point in time, claim frequency and severity, historical trends in the development
of claims as well as legal, social and economic factors that may affect each class of business.
Assumption (before impact of reinsurance)20232022
Expected future claims development proportion36.1%20.3%
Claims handling expense ratio5.9%6.6%
Risk margin5.2%6.0%
Discount rate*5.7%N/A
* Discounting has been allowed on all outstanding claims (2022: only on outstanding claims relating to the Canterbury
earthquakes). Refer note 2.4a for further details.
Expected future claims development proportion
This is the proportion of additional claims cost that is expected to be recognised in the future for claims that
have already been reported. The assumption is expressed as a proportion of current case estimates for open
claims and the resulting amount is recognised in the balance sheet as an outstanding claims liability.
Claims handling expense ratio
This reflects the expected cost to administer current open and future claims. The ratio is calculated based on
historical experience of claims handling costs.
Risk margin
Risk margins are calculated for outstanding claims in each country separately and a diversification benefit is
calculated taking into account the uncorrelated effect of random risk. The total risk margin percentage shown
is calculated on a weighted average basis.
2.4 Net outstanding claims (continued)
ANNUAL REPORT 202375
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

Canterbury Earthquake outstanding claims liability
Assumptions are made for the estimation of outstanding claims related to the Canterbury earthquakes. The
key assumptions are estimated ultimate costs (including building costs) for settling open claims, and the
numbers of new overcap claims, litigated claims, re-opened claims and their associated costs. Other elements
of judgement include the apportionment of claim costs between the four main earthquake events, future claim
management expenses and assessment of the risk margin.
Assumption
20232022
Number of future new overcap and new litigated claims 41 46
Average cost of new overcap or new litigated claim 94,000 114,000
Provision for re-opened claims 790,000 1,070,000
Additional portfolio-level provision for incurred but not enough reported 1,499,000 2,355,000
New overcap and new litigated claims
New overcap claims are typically for properties that have previously been managed by EQC but where damage
is now assessed as being more extensive than previously thought and there is now an insurance claim payable.
New litigated claims are existing or future new claims that are referred to either the Insurance Tribunal or the
High Court for resolution. Costs for new litigated claims are assumed to be substantially higher than costs for
other overcap claims. Only a small number of new litigated claims are now expected.
Provision for re-opened claims
Re-opened claims arise where additional liability arises for additional scope not previously identified or where
a repair has failed or where another expense is payable for a claim that is currently closed.
g. Sensitivity Analysis
The impact on profit or loss of changes in key assumptions used in the calculation of the outstanding claims
liabilities is summarised below. Each change has been calculated in isolation from the other variables and is
stated before income tax.
Outstanding claims excluding Canterbury earthquake
IMPACT ON PROFIT OR (LOSS)
MOVEMENT IN
ASSUMPTION
2023
$000
2022
$000
Expected future claims development + 10%(2,037)(1,419)
- 10%2,037 1,419
Claims handling expense ratio + 10%(607)(556)
- 10%607 556
Risk margin + 10%(517)(505)
- 10%517 505
Discount rate + 1.75%609 –
- 1.75%(631)–
Canterbury earthquake outstanding claims
IMPACT ON PROFIT OR (LOSS)
MOVEMENT IN
ASSUMPTION
2023
$000
2022
$000
Number of new overcap or new litigated claims + 35%(1,351)(1,817)
- 35%1,351 1,817
Change in average cost of a new overcap or new
litigated claim
+ 20%(772)(1,038)
- 20%772 1,038
Number of reopened claims + 35%(277)(375)
- 35%277 375
Change in average cost of a reopened claim + 20%(158)(214)
- 20%158 214
2.4 Net outstanding claims (continued)
f. Critical accounting estimates and judgements (continued)
ANNUAL REPORT 202376
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

Adequacy of unearned premium liability
Tower undertakes a liability adequacy test (LAT) to determine whether the unearned premium liability is
sufficient to pay future claims net of reinsurance recoveries.
If the present value of expected future net cash flows relating to current insurance contracts, plus a risk margin,
exceeds the unearned premium liabilities less related deferred acquisition costs and intangible assets, then
the unearned premium liability is deemed deficient. This deficiency is immediately recognised in profit or loss.
In recognising the deficiency, Tower will first write down any related deferred acquisition costs or intangible
assets before recognising an unexpired risk liability.
The unearned premium liability as at 30 September 2023 was sufficient for the New Zealand business
(2022: sufficient). The unearned premium liabilities as at 30 September 2023 for each Pacific entity was
also sufficient (2022: sufficient).
20232022
Central estimate net claims as a % of unearned premium liability52.8%45.5%
Risk margin as a % of net claims13.3%11.2%
Critical accounting estimates and judgements
The LAT is conducted using a central estimate of premium liability adjusted for risk margin and it is
carried out on an individual country basis. The test is based on prospective information and so is heavily
dependent on assumptions and judgements.
2.5 Unearned premium liability
Reconciliation
2023
$000
2022
$000
Opening balance 238,116 212,275
Premiums written during the year from continuing operations 511,484 436,593
Premiums earned during the year from continuing operations(470,813)(409,601)
Unearned premium movement from continuing operations40,67126,992
Premiums written during the year from discontinued operations10,31317,042
Premiums earned during the year from discontinued operations(9,969)(17,405)
Unearned premium movement from discontinued operations344(363)
Foreign exchange movements(990)3,957
Liabilities reclassified as held for sale(5,307)(4,745)
Unearned premium liability from continuing operations 272,834 238,116
All unearned premiums will be earned in the 12 months after 30 September 2023 and therefore are current
liabilities. The unearned premium liability is presented net of cancellation provisions.
Recognition and measurement
Unearned premium liability is the portion of premiums written that are yet to be earned in the
consolidated statement of comprehensive income. It is calculated based on the term of the risk and in
accordance with the expected pattern of the incidence of risk underwritten using an appropriate pro-
rated method.
ANNUAL REPORT 202377
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

2.6 Deferred insurance costs
DEFERRED ACQUISITION COSTS
DEFERRED OUTWARDS
REINSURANCE EXPENSEDEFERRED INSURANCE COSTS
Reconciliation
2023
$000
2022
$000
2023
$000
2022
$000
2023
$000
2022
$000
Balance brought forward26,54221,11611,27710,85137,81931,967
Costs deferred59,04848,19215,18317,28374,23165,475
Amortisation expense(54,617)(42,765)(14,790)(17,073)(69,407)(59,838)
Foreign exchange movements(105)247(316)1,303(421)1,550
Asset reclassified as held for sale(819)(248)(1,452)(1,087)(2,271)(1,335)
Closing balance30,04926,5429,90211,27739,95137,819
Deferred insurance costs are expected to be amortised within 12 months from reporting date.
Recognition and measurement
Acquisition costs comprises costs incurred in obtaining and recording general insurance contracts
such as advertising expenses, sales expenses and other underwriting expenses. These costs are
initially capitalised and then expensed in line with the earning pattern of the related premium. Deferred
acquisition costs at the reporting date represent the acquisition costs related to unearned premium.
Outwards reinsurance expense reflects premiums ceded to reinsurers and is recognised as an expense
in accordance with the pattern of reinsurance service received. Deferred outwards reinsurance expense
at the reporting date represents outwards reinsurance expenses related to unearned premium.
ANNUAL REPORT 202378
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

2.7 Receivables
Composition
2023
$000
2022
$000
Gross premium receivables243,791 200,715
Provision for expected future premium cancellations(516)(651)
Premium receivable243,275 200,064
Reinsurance recoveries*142,961 15,847
Canterbury earthquake reinsurance recoveries2,329 3,787
Other recoveries17,865 11,378
Reinsurance and other recoveries163,155 31,012
Finance lease receivables344 2,375
Prepayments5,416 4,411
Other receivables1,636 2,401
Receivable from discontinued operations** – 1,826
Receivables413,826 242,089
Receivable within 12 months413,826 241,742
Receivable in greater than 12 months–347
Receivables413,826 242,089
* Refer note 2.2 for further detail.
** Refer note 8.4 for further detail.
Recognition and measurement
Receivables (inclusive of GST) are recognised at fair value and are subsequently measured at cost less
any impairment.
Tower’s premium receivables and reinsurance and other recoveries arise from insurance contracts. These
receivables are impaired if there is objective evidence that Tower will not be able to collect all amounts
due according to the original terms of the receivable.
The remainder of Tower’s receivables are assessed for impairment based on expected credit losses.
Finance lease receivables
Tower entered into a sub-lease for its previous Auckland premises. The sub-lease is for the remaining non-
cancellable term of the head lease and therefore is classified as a finance lease. The profile of the net receipts
is illustrated in the table below:
2023
$000
2022
$000
Less than one year 345 2,074
Between one and five years–347
Total undiscounted finance lease receivable 345 2,421
Unearned finance income(1)(46)
Net investment in the finance lease 344 2,375
ANNUAL REPORT 202379
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

2.8 Payables
Composition
2023
$000
2022
$000
Trade payables 11,102 14,672
GST payable 27,923 25,951
EQC & Fire and Emergency New Zealand levies payable 16,782 11,583
Reinsurance premium payable 12,746 3,696
Other 5,252 3,009
Payable to discontinued operations* 3,227 –
Payables 77,032 58,911
Payable within 12 months 77,032 58,911
Payable in greater than 12 months – –
Payables 77,032 58,911
* Refer note 8.4 for further detail.
Recognition and measurement
Payables are recognised where goods or services that have been received or supplied and have been
invoiced or formally agreed with the supplier. Payables are stated at the fair value of the consideration to
be paid in the future inclusive of GST. GST payable represents the net amount payable to the respective
tax authorities.
2.9 Provisions
Composition
2023
$000
2022
$000
Annual leave and other employee benefits 5,737 8,219
Customer remediation* 7,086 3,654
Provisions 12,823 11,873
Payable within 12 months 11,762 10,716
Payable in greater than 12 months 1,061 1,157
Provisions 12,823 11,873
* A customer remediation provision of $3.7m was first recognised at 30 September 2022. During the current year, the estimated
cost of remediation was re-assessed. A range of possible outcomes was considered, and a mid-point of the re-assessment has
resulted in an additional $8.1m being recognised in the current period, which has been offset by payments made during the
period. The resulting provision allows for amounts to be repaid to customers and costs associated with any potential regulatory
action. The remediation activities are likely to be completed during FY24.
Recognition and measurement
Tower recognises a provision when it has a present obligation as a result of a past event and it is more
likely than not that an outflow of resources will be required to settle the obligation. Tower’s provision
represents the best estimate of the expenditure required to settle the present obligation at the end of
the reporting period.
2.10 Assets backing insurance liabilities
Tower has determined that all assets within its insurance companies are held to back insurance liabilities,
with the exception of: (i) property, plant and equipment; (ii) right-of-use assets, (iii) intangible assets,
(iv) deferred tax; and (v) investments in operating subsidiaries. Assets backing insurance liabilities are
managed in accordance with approved investment mandate agreements on a fair value basis and are
reported to the Board on that basis.
ANNUAL REPORT 202380
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

3.2 Investments
Tower designates its investments at fair value through profit or loss in accordance with its Treasury policy.
It categorises its investments into three levels based on the inputs available to measure fair value:
Level 1 Fair value is calculated using quoted prices in active markets. Tower currently does not have any
Level 1 investments.
Level 2 Investment valuations are based on direct or indirect observable data other than quoted
prices included in Level 1. Level 2 inputs include: (1) quoted prices for similar assets or liabilities;
(2) quoted prices for assets or liabilities that are not traded in an active market; or (3) other
observable market data that can be used for valuation purposes. Tower investments included
in this category include government and corporate debt, where the market is considered to
be lacking sufficient depth to be considered active, and part ownership of a property that is
rented out to staff.
Level 3 Investment valuation is based on unobservable market data. Tower currently does not have any
Level 3 investments.
LEVEL 1
$000
LEVEL 2
$000
LEVEL 3
$000
TOTAL
$000
As at 30 September 2023
Fixed interest investments – 258,764 – 258,764
Property investment – 34 – 34
Investments – 258,798 – 258,798
As at 30 September 2022
Fixed interest investments – 258,600 – 258,600
Property investment – 34 – 34
Investments – 258,634 – 258,634
There have been no transfers between levels of the fair value hierarchy during the current financial period
(2022: nil).
3 Investments and other income
Tower invests funds collected as premiums and provided by shareholders to ensure it can meet its
obligations to pay claims and expenses and to generate a return to support its profitability. Tower has
a low risk tolerance and therefore the majority of its investments are in investment grade supranational
and government bonds, and term deposits.
3.1 Investment income
2023
$000
2022
$000
Interest income12,871 6,815
Net realised gain/(loss)1,173 (2,026)
Net unrealised gain/(loss)583 (3,309)
Investment income 14,627 1,480
Recognition and measurement
Tower’s investment income is primarily made up of realised and unrealised interest income on fixed
interest investments and fair value gains or losses on its investment assets. Both are recognised in the
period that they are earned through profit or loss.
ANNUAL REPORT 202381
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

Recognition and measurement
Tower’s investment assets are designated at fair value through profit or loss. Investment assets are
initially recognised at fair value and are remeasured to fair value through profit or loss at each reporting
date. Tower’s approach to measuring the fair value of these assets is covered above.
Purchases and sales of investments are recognised at the date which Tower commits to buy or sell
the assets (i.e. trade date). Investments are derecognised when the rights to receive future cash flows
from the assets have expired, or have been transferred, and substantially all the risks and rewards of
ownership have transferred.
3.3 Other income
2023
$000
2022
$000
Agency fees*3,574 715
Gain on disposal of property, plant and equipment1,243 16
Other910 573
Other income 5,727 1,304
* Agency fees include fees received for managing claims on behalf of EQC.
3.2 Investments (continued)
4 Risk Management
Tower is exposed to multiple risks as it works to set things right for its customers and their communities
whilst maximising returns for its shareholders. Everyone across the organisation is responsible for
ensuring that Tower’s risks are managed and controlled on a day-to-day basis.
4.1 Risk management overview
Tower’s approach to achieving effective risk management is to embed a risk-aware culture where everyone
across the organisation (including contractors and third parties) is responsible for managing risk.
Tower’s Board expresses its appetite for risk in a Risk Appetite Statement, which:
(i) Gives clear concise guidance to management of parameters for risk taking.
(ii) Embeds risk management into strategic and decision-making processes.
(iii) Facilitates risk to be managed at all levels of the organisation through a structured process to identify
risk, and the allocation of clear, personal responsibility for management of identified risks by assigned risk
owners.
The Board then approves and adopts: (i) the Risk Management Framework (RMF) which is the central document
that explains how Tower effectively manages risk within the business; and (ii) the Reinsurance Management
Strategy (ReMS) which describes the systems, structures, and processes which collectively ensures Tower’s
reinsurance arrangements and operations are prudently managed. These documents are reviewed and
approved at least annually by the Board.
The Board has delegated its responsibility to the Risk Committee to provide oversight of risk management
practices and provide advice to the Board and management when required. In addition, the Risk Committee
also monitors the effectiveness of Tower’s risk management function which is overseen by the Chief Risk Officer
(CRO). The CRO provides regular reports to the Risk Committee on the operation of the RMF.
Tower has embedded the RMF with clear accountabilities and risk ownership to ensure that Tower identifies,
manages, mitigates and reports on all key risks and controls through the three lines of defence model.
(i) First line: Operational management has ownership, responsibility and accountability for directly identifying,
assessing, controlling and mitigating key risks which prevent them from achieving business objectives.
(ii) Second Line: Tower’s Risk, Compliance and Conduct Function is responsible for developing and
implementing effective risk, compliance and conduct management processes; providing advisory support
to the first line of defence and constructively challenging operational management and risk and obligation
owners to ensure positive assurance.
ANNUAL REPORT 202382
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

(iii) Third line: Internal Audit is responsible and accountable for providing an independent and objective view
of the adequacy and effectiveness of the Group’s risk management, governance and internal control
framework. Internal audit, along with other groups such as external audit, report independently to the
Board and/or the Audit Committee.
The RMF is supported by a suite of policies that address the risks and compliance obligations covered in
this section.
4.2 Strategic risk
Strategic risk is the risk that internal or external factors compromise Tower’s ability to execute its strategy or
achieve its strategic objectives. Strategic risk is managed through:
(i) Monitoring and managing performance against Board-approved plan and targets.
(ii) Board leading an annual strategy and planning process which considers our performance, competitor
positioning and strategic opportunities.
(iii) Identifying and managing emerging risks using established governance processes and forums.
4.3 Insurance risk
Insurance risk is the risk that for any class of risk insured, the present value of actual claims payable will exceed
the present value of actual premium revenues generated (net of reinsurance). This risk is inherent in Tower’s
operations and arises and manifests through underwriting, insurance concentration and reserving risk.
a. Underwriting risk
Underwriting risk refers to the risk that claims arising are higher (or lower) than assumed in pricing due to bad
experience including catastrophes, weakness in controls over underwriting or portfolio management, or claims
management issues. Tower has established the following key controls to mitigate this risk:
(i) Use of comprehensive management information systems and actuarial models to price products based
on historical claims frequencies and claims severity averages, adjusted for inflation and modelled
catastrophes, trended forward to recognise anticipated changes in claims patterns after making allowance
for other costs incurred by the Group.
(ii) Passing elements of insurance risk to reinsurers. Tower’s Board determines a maximum level of risk to be
retained by the Group as a whole.
Tower’s reinsurance programme is structured to adequately protect the solvency and capital positions of
the insurance business. The adequacy of reinsurance cover is modelled by assessing Tower’s exposure
under a range of scenarios. The plausible scenario that has the most financial significance for Tower
is a major Wellington earthquake. Each year, as part of setting the coming year’s reinsurance cover,
comprehensive modelling of the event probability and amount of the Group’s exposure is undertaken.
4.1 Risk management overview (continued)
(iii) Underwriting limits are in place to enforce appropriate risk selection criteria and pricing with specific
underwriting authorities that set clear parameters for the business acceptance.
b. Concentration risk
Concentration risk refers to the risk of underwriting a number of like risks, where the same or similar loss events
have the potential to produce claims from many of Tower’s customers at the same time. Tower is particularly
subject to concentration risks in the following variety of forms:
(i) Geographic concentration risk - Tower purchases a catastrophe reinsurance programme to protect against
a modelled 1-in-1000 years whole of portfolio catastrophe loss.
(ii) Product concentration risk - Tower’s business is weighted towards the NZ general insurance market where its
risks are concentrated in house insurance (Home & Contents) and motor insurance. Tower limits its exposure
through proportional reinsurance arrangements, where Tower transfers its exposure on any single insured
asset (for example, a house) above a set amount, in exchange for ceding portion of the premium to reinsurers.
The table below illustrates the diversity of Tower’s operations.
Gross written premium 20232022
NZPACIFIC*TOTALNZPACIFIC*TOTAL
Home & Contents51%3%54%52%3%55%
Motor38%3%41%35%3%38%
Commercial1%3%4%1%4%5%
Liability0%0%0%1%0%1%
Workers compensation0%0%0%0%0%0%
Other1%0%1%1%0%1%
Total91%9%100%90%10%100%
* The Pacific operating segment excludes the disposal groups and the prior year comparatives have been re-presented
accordingly.
Tower has limited exposure to long-tail classes (which comprises part of “liability” and “workers compensation”).
Long-tail classes have increased uncertainty of the ultimate cost of claims due to the additional period of time
to settlement.
c. Reserving risk
Reserving risk is managed through the actuarial valuation of insurance liabilities and monitoring of the
probability of adequacy booked reserves. The valuation of the net central estimate is performed by qualified
and experienced actuaries. The central estimate is subject to a comprehensive review at least annually.
ANNUAL REPORT 202383
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

4.4 Credit risk
Credit risk is the risk of loss that arises when a counterparty fails to meet their financial obligations to Tower
in accordance with the agreed terms. Tower’s exposure to credit risk primarily results from transactions with
security issuers, reinsurers and policyholders and is set out below.
a. Investment and treasury
Tower manages its investment and treasury credit risks in line with limits set by the Board:
(i) New Zealand cash deposits that are internally managed are limited to banks with a minimum Standard &
Poor’s (S&P) AA- credit rating.
(ii) Cash deposits and investments that are managed by external investment managers are limited to
counterparties with a minimum credit rating equivalent to S&P A- credit rating.
(iii) Tower holds deposits and invests in Pacific regional investment markets through its Pacific Island
operations to comply with local statutory requirements and in accordance with Tower investment policies.
These deposits and investments generally have low credit ratings representing the majority of the value
included in the ‘Below BBB’ and ‘not rated’ categories in the table below. This includes deposits and
investments with Australian bank subsidiaries that comprise 45% (2022: 55%) of the ‘not rated’ category.
CASH AND CASH EQUIVALENTSFIXED INTEREST INVESTMENTSTOTAL
2023
$000
2022
$000
2023
$000
2022
$000
2023
$000
2022
$000
AAA – – 104,646 119,198 104,646 119,198
AA 47,992 66,228 113,971 110,957 161,963 177,185
A – – 38,137 24,399 38,137 24,399
BBB – – – – – –
Below BBB 11,917 1,614 1,322 2,009 13,239 3,623
Not rated 4,100 16,660 722 2,071 4,822 18,731
Total 64,009 84,502 258,798 258,634 322,807 343,136
b. Reinsurance
Tower manages its reinsurance programme in line with the ReMS. Tower seeks to manage the quantum and
volatility of insurance risk in order to reduce exposure and overall cost.
Tower’s policy is to only deal with reinsurers with a credit rating of S&P A- or better unless local statutory
requirements dictate otherwise. Additional requirements of the policy are for no individual reinsurer to have
more than 25% share of the overall programme and Tower is prohibited from offering inwards reinsurance to
external entities. The following table provides details on Tower’s exposure to reinsurance recoveries:
REINSURANCE ON:
OUTSTANDING CLAIMSPAID CLAIMSTOTAL
2023
$000
2022
$000
2023
$000
2022
$000
2023
$000
2022
$000
AAA – – – – – –
AA 61,759 5,830 15,474 2,929 77,233 8,759
A 57,295 8,319 10,677 2,220 67,972 10,539
BBB 9 9 (1) – 8 9
Below BBB 75 102 2 3 77 105
Not rated18 220 4 2 22 222
Total 119,156 14,480 26,156 5,154 145,312 19,634
ANNUAL REPORT 202384
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

The following table provides further information regarding the ageing of reinsurance recoveries on paid claims
at the balance date.
PAST DUE
NOT DUE
$000
1 MONTH
$000
1 TO 2
MONTHS
$000
2 TO 3
MONTHS
$000
OVER 3
MONTHS
$000
TOTAL
$000
As at 30 September 2023
Reinsurance recoveries on
paid claims 26,156 – – – – 26,156
As at 30 September 2022
Reinsurance recoveries on
paid claims 5,154 – – – – 5,154
c. Premium receivable
Tower’s premium receivable balance primarily relates to policies which are paid on either a fortnightly or
monthly basis. Payment default or policy cancellation - subject to the terms of the policyholder’s contract -
will result in the termination of the insurance contract eliminating both the credit risk and the insurance risk.
PAST DUE
NOT DUE*
$000
1 MONTH
$000
1 TO 2
MONTHS
$000
2 TO 3
MONTHS
$000
OVER 3
MONTHS
$000
TOTAL
$000
As at 30 September 2023
Net premium receivable 237,736 4,375 270 844 50 243,275
As at 30 September 2022
Net premium receivable 192,464 5,933 1,188 384 95 200,064
* This includes premiums that are less than 30 days outstanding (which are owed but not past due) of $4.3m (2022: $4.0m).
4.5 Market risk
Market risk is the risk of adverse impacts on investment earnings resulting from changes in market factors.
Tower’s market risk is predominately as a result of changes in the value of the New Zealand dollar (currency
risk) and interest rate movements. Tower’s approach to managing market risk is underpinned by its Treasury
Policy as approved by the Board.
a. Currency risk
Tower’s currency exposure arises from the translation of foreign operations into Tower’s functional currency
(currency translation risk) or due to transactions denominated in a currency other than the functional currency
of a controlled entity (operational currency risk). The currencies giving rise to this risk are primarily the US dollar,
Fijian dollar and Papua New Guinea (PNG) kina.
Tower’s principal currency risk is currency translation (where currency movements impact equity). Tower
generally elects not to hedge this risk as it is difficult given the size and nature of the currency markets in the
Pacific. Tower seeks to minimise its net exposure to foreign operational risk by actively seeking to return surplus
cash and capital to the parent company.
Operational currency risk impacts profit and generally arises from:
(i) Procurement of goods and services denominated in foreign currencies. Tower may enter into hedges for
future transactions, using authorised instruments, provided that the timing and amount of those future
transactions can be estimated with a reasonable degree of certainty.
(ii) Investment assets managed by the external investment manager that are denominated in foreign
currencies. Tower’s Board set limits for the management of currency risk based on prudent asset
management practice. Regular reviews are conducted to ensure that these limits are adhered to.
The following table demonstrates the impact of the New Zealand dollar weakening or strengthening
against the most significant currencies for which Tower has foreign exchange exposure holding all other
variables constant.
4.4 Credit risk (continued)
b. Reinsurance (continued)
ANNUAL REPORT 202385
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

DIRECT IMPACT ON
EQUITY THROUGH CURRENCY
TRANSLATION RESERVEIMPACT ON PROFIT OR (LOSS)
2023
$000
2022
$000
2023
$000
2022
$000
New Zealand Dollar - USD
Currency strengthens by 10%(1,025)(793)42113
Currency weakens by 10%1,253969(51)(138)
New Zealand Dollar - Fijian Dollar
Currency strengthens by 10%(887)(854)(74)(74)
Currency weakens by 10%1,0841,0449190
New Zealand Dollar - PNG Kina
Currency strengthens by 10% – (629)(805)44
Currency weakens by 10% – 769984(54)
4.5 Market risk (continued)
a. Currency risk (continued)
b. Interest rate risk
Tower is exposed to interest rate risk through its holdings in interest-bearing assets. Interest-bearing assets
with a floating interest rate expose Tower to cash flow interest rate risk, whereas fixed interest investments
expose Tower to fair value interest rate risk.
Tower’s interest rate risk primarily arises from fluctuations in the valuation of fixed-interest investments
recognised at fair value and from the underwriting of general insurance contracts, which have interest rate
exposure due to the use of discount rates in calculating the value of insurance liabilities.
Fixed-interest investments are measured at fair value through profit or loss. Movements in interest rates impact
the fair value of interest-bearing financial assets and therefore impact profit or loss (there is no direct impact on
equity). The impact of a 1% increase or decrease in interest rates on fixed interest investments is shown below
(holding everything else constant).
IMPACT ON PROFIT OR (LOSS)
2023
$000
2022
$000
Interest rates increase by 1% (1,652)(1,617)
Interest rates decrease by 1%1,7261,690
Tower manages its interest rate risk through Board-approved investment management guidelines that give regard
to policyholder expectations and risks, and to target surplus for solvency as advised by the Appointed Actuary.
ANNUAL REPORT 202386
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

4.6 Liquidity risk
Liquidity risk arises where liabilities cannot be met as they fall due as a result of insufficient funds and/or
illiquid asset portfolios. Tower mitigates this risk through maintaining sufficient liquid assets to ensure that
it can meet all obligations on a timely basis.
Tower is primarily exposed to liquidity risk through its obligations to make payment for claims of unknown
amounts on unknown dates. Fixed-interest investments can generally be readily sold or exchanged for cash
to settle claims and are managed in accordance with the policy of broadly matching the overall maturity profile
to the estimated pattern of claim payments. This is illustrated in the table below:
NET OUTSTANDING CLAIMS LIABILITYCASH AND INVESTMENTS
2023
$000
2022
$000
2023
$000
2022
$000
Floating interest rate (at call) – – 89,909 84,649
Within 3 months 53,220 45,224 28,682 28,181
3 to 6 months 22,629 20,726 30,231 44,940
6 to 12 months 20,214 18,969 61,661 55,407
After 12 months 25,378 25,532 112,324 129,959
Total 121,441 110,451 322,807 343,136
4.7 Capital management risk
Capital risk is the risk that capital is insufficient or not of the best form to provide a buffer against losses arising
from unanticipated events, while also maximising the efficient use of capital with a view to enhancing growth
and returns, and adding long-term value to Tower’s shareholders.
Tower has a documented description of its capital management process which sets out Tower’s principles,
approaches, and processes in relation to capital management that enables it to operate at an appropriate level
of target solvency capital which is within the bounds of Tower’s risk appetite.
The capital management process allows the Board, management, rating agencies and the regulator to
understand Tower’s approach to capital management, including requirements for formulating capital targets,
and monitoring, reporting and remediating capital as required.
The operation of the capital management process is reported annually to the Board together with a forward-
looking estimate of expected capital utilisation and capital resilience. In addition, Tower carries out stress,
reverse stress and scenario testing to ensure the level of capital is appropriate given its risk appetite.
a. Regulatory solvency capital
The Reserve Bank of New Zealand (RBNZ) is the prudential regulator and supervisor of all insurers carrying on
insurance business in New Zealand, and is responsible for administering the Insurance (Prudential Supervision)
Act 2010. Tower measures the adequacy of capital against the Solvency Standards for Non-life Insurance
Business published by the RBNZ alongside additional capital held to meet RBNZ minimum requirements and
any further capital as determined by the Board.
Foreign operations are subject to regulatory oversight in the relevant jurisdiction. It is Tower’s policy to ensure
that each of the licenced insurers in the Group maintain an adequate capital position within the requirements of
the relevant regulator.
During the year ended 30 September 2023 the Group complied with all externally imposed capital
requirements (2022: complied).
Tower Limited’s Group and Parent solvency margin are illustrated in the table below.
2023
$000
2022
$000
PARENTGROUPPARENTGROUP
Actual solvency capital 145,421 174,734 136,423 171,647
Minimum solvency capital 91,634 99,729 66,530 79,018
Solvency margin* 53,787 75,005 69,893 92,629
Solvency ratio159%175%205%217%
* Tower is required to maintain a solvency margin of at least $15m (2022: $15m), due to a license condition issued by the RBNZ. .
In October 2020, the RBNZ commenced consultation on a review of the Insurance (Prudential Supervision) Act
2010. As part of the overall process, the RBNZ issued an exposure draft on an interim solvency standard (ISS) in
July 2021 which anticipated the introduction of NZ IFRS 17 Insurance Contracts (IFRS 17). The ISS was issued in
October 2022, amended in June 2023 and RBNZ has been consulting on further changes to the ISS between
September and November 2023.
Tower will apply the RBNZ’s new ISS from 1 October 2023.  The ISS will impose some changes that will impact
solvency margins. Due to the ongoing RBNZ consultation, Tower cannot yet determine the final impacts of the
ISS on solvency margins.
ANNUAL REPORT 202387
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

b. Capital composition
The balance sheet capital mix at reporting date is shown in the table below:
2023
$000
2022
$000
Total equity attributed to shareholders 300,265 317,528
c. Financial strength rating
Tower Limited has an insurer financial strength rating of “A- (Excellent)” and a long-term issuer credit rating of
“a-” as affirmed by international rating agency AM Best Company Inc. in April 2023.
4.8 Operational risk
Operational risk is the risk of loss due to inadequate or failed internal processes or systems, human error or
from external events.
Tower’s approach is to proactively manage our operational risks to mitigate potential customer detriment,
regulatory or legal censure, financial and reputational impacts.
Tower has in place appropriate operational processes and systems, including prevention and detection
measures. These include processes which seek to ensure Tower can absorb and/or adapt to internal or
external occurrences that could disrupt business operations.
Management and staff are responsible for identifying, assessing, recording and managing operational risks
in accordance with their roles and responsibilities. Associated controls for identified risks are recorded and
then actively monitored and managed through our enterprise risk management system (ERMS). Incidents are
managed by the first line of defence and overseen by the second line of defence, with ongoing reporting to
management and the Board Risk Committee.
Tower also maintains and regularly updates its Crisis Management, Business Continuity and Disaster Recovery
Plans to minimise the impact of material incidents or crisis events and to support continuity of critical systems
and processes.
4.9 Regulatory and compliance risk
Regulatory and compliance risk is defined as the risk of legal, regulatory or reputational impacts arising
from failure to manage compliance obligations, or failure to anticipate and prepare for changes in the
regulatory environment.
Tower, via its ERMS, has in place an obligations management framework. The framework provides operational
and managerial oversight of applicable and relevant regulatory compliance obligations to Tower and supports
Tower in discharging its obligations under legislation across NZ & the Pacific.
Tower engages with regulators and regularly monitors developments in regulatory requirements to support
ongoing compliance.
4.10 Conduct risk
Conduct risk is defined as the risk that conduct may contribute to poor outcomes for customers.
Tower manages Conduct risk through a number of measures including undertaking ongoing product reviews
to ensure products are delivering good customer outcomes, reviewing customer feedback to identify conduct
trends or issues, completing quality assurance reviews, managing vulnerable customers, holding workshops
with frontline staff to identify potential conduct issues and embedding and monitoring controls across the
business to deliver fair customer outcomes.
Tower’s approach to managing conduct risk is set out in its Conduct Governance Framework. The framework
is a collation of policies, frameworks and processes and ensures there’s robust governance in place to oversee
Tower’s conduct risk profile including reporting to the Management and Board Committees.
4.11 Cyber risk
Cyber risk is any risk associated with financial loss, disruption or damage to the reputation of Tower resulting
from either the failure, or unauthorised or erroneous use of its information systems.
Tower’s approach to Cyber risk is to proactively protect against, monitor for and respond to those cyber threats
seen to be targeting the organisation. Tower continues to monitor evolving key cyber risks, which are discussed
and reviewed on a monthly basis through our Management Risk and Conduct Committee and on a quarterly
basis with the Risk Committee. Risk mitigation is achieved through ongoing investment in Tower’s security
programme and Tower’s dedicated security function.
4.7 Capital management risk (continued)
ANNUAL REPORT 202388
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents

4.12 Climate change risk
Climate change risk is the risk associated with the unpredictable nature and impacts of weather events which
may increase in frequency and severity over time due to changes in climate.
Tower’s RMF considers environmental and emerging risks, which are regularly reported to the Board. Tower’s
approach to managing climate change risk includes leading the insurance market by continuing to expand
our risk-based pricing strategy for climate-related hazards, maintaining a robust reinsurance programme
to provide protection from volatility in weather events, planning for increasing large events over time in our
budget process to limit financial impacts, and supporting communities through climate change via product
development.
We note that in the financial year Tower experienced several catastrophe events which may be linked to
climate change. January’s Auckland and upper North Island weather event, Cyclone Gabrielle in February,
Cyclones Judy and Kevin in Vanuatu in March, and the Auckland floods on 9 May had a net impact to Tower of
$38m, excluding reinsurance reinstatement. Tower’s liabilities include provision for outstanding claims arising
from these events.
Other than the impact on outstanding claims liabilities, Tower considers that climate change risk does not
materially impact the valuation of Tower’s assets and liabilities, where these assets or liabilities are expected to
be realised in one year or less. For non-current assets, Tower has looked to its short-medium term forecasting,
which implicitly includes allowances for the risk of climate change in forecasts of the severity and frequency
of future claims, including large events. These forecasts show continued profitability for Tower, which supports
the carrying value of non-current assets. Accordingly, Tower does not consider that climate change risk has a
material impact on the assets and liabilities recorded in these financial statements, as at 30 September 2023.
5 Capital Structure
This section provides information about how Tower finances its operations through equity. Tower’s capital
position provides financial security to its customers, employees and other stakeholders whilst operating
within the capital requirements set by regulators.
5.1 Contributed equity
2023
$000
2022
$000
Opening balance460,191 492,424
Return of share capital to shareholders* – (30,634)
Purchase of non-controlling interests** – (1,599)
Share rights issued under Tower Long-Term Incentive Plan ***124 –
Total contributed equity460,315 460,191
Represented by:
Opening balance379,483,987 421,647,258
Cancellation of shares on return of capital – (42,163,271)
Total shares on issue379,483,987 379,483,987
* On 9 March 2022 the Group completed its ordinary share buy-back for a consideration of $30.6m (including transaction costs).
This resulted in 42.2m shares being cancelled during the year ended 30 September 2022.
** On 14 October 2021 Tower Limited reached an agreement to increase its shareholding in National Pacific Insurance Limited from
71.39% to 93.88% for a consideration of $3.4m. Tower Limited subsequently carried out a process to acquire the remaining 6.12%
shareholding which completed on 17 December 2021 for a consideration of $0.9m.
*** Refer note 8.5 for further detail.
Ordinary shares issued by the Company are classified as equity and are recognised at fair value less direct issue
costs. All shares rank equally with one vote attached to each share. There is no par value for each share.
ANNUAL REPORT 202389
Notes to the consolidated financial statements (continued)
Our strategy2023 in reviewWeather eventsSustainabilityConsolidated financial statementsCorporate governanceGRI content index Contents