Tower stock: FY26 underlying profit guidance lifted to NZD 69m-79m

Tower Limited raised its preliminary underlying profit outlook for the financial year ended September 30, 2026, after large-event claims used less of the allowance set aside for them. In its NZX announcement dated October 6, the New Zealand insurer lifted its underlying net profit after tax guidance to NZD 69 million to NZD 79 million from NZD 55 million to NZD 65 million.

Lower claims support profit outlook

Tower said large-event claim costs for FY26 were around NZD 25 million, compared with a NZD 45 million allowance. The unused portion of roughly NZD 20 million is expected to increase underlying NPAT by NZD 14 million after tax.

The company described the expected result as a return to a more typical earnings profile after unusually favourable weather and claims experience made FY25 exceptionally strong. The guidance remains preliminary and unaudited, while reported profit will continue to reflect further customer remediation costs incurred in the second half.

Customer growth remains positive

Tower said customer numbers rose 8 percent during the year to 345,000, driven mainly by growth in New Zealand home insurance policies and by new and existing partnerships. Gross written premium increased 3 percent, in line with the company's low-single-digit growth guidance.

For investors, the upgraded underlying outlook is closely tied to claims experience rather than a broad acceleration in premium growth. The company also said competitive pricing supports customer affordability and growth, while expanded risk-based pricing is intended to strengthen portfolio quality and reduce exposure to weather-related impacts.

Tower's insurance business

Tower is a New Zealand insurance company focused on providing insurance products, with home insurance identified as a key area of customer growth. Its distribution model includes direct customer activity and partnerships, according to the company's investor centre. The disclosed customer and premium trends position Tower as a focused New Zealand insurer whose near-term earnings remain sensitive to claims and remediation costs.