The absence of major storms, earthquakes, or other natural disasters has led New Zealand insurer Kiwi Insurer Tower (ASX: WR) to drop a significant hint that its underlying net profit after tax for 2023-24 will be one of the best reported, at around NZ$83 million.
This figure marks an increase from NZ$7.6 million in 2022-23 (before accounting for massive extraordinary losses) and is nearly double the previous guidance of NZ$45 million.
Reported profit is expected to be around NZ$74 million, compared to a loss of NZ$1.3 million in 2022-23.
Tower stated that the turnaround is “due to no large events being recorded in the financial year and stronger-than-expected business performance, particularly in claims.”
“Tower’s previous market guidance assumed full utilization of the FY24 large events allowance, which was conservatively set at NZ$45 million. As no large events were recorded in the financial year, the unused allowance has increased expected underlying NPAT by NZ$32 million (NZ$45 million less tax).”
“Reported profit is expected to be around NZ$74 million after accounting for an increase in payments related to customer remediations and associated costs, including those related to regulatory action.”
In the previous year, Tower and the insurance industry in Australia (such as AAMI and IAG) were impacted by two massive storms and flooding in the North Island in January and February of 2023.
These two events were the result of Cyclone Gabrielle in February and the Auckland floods three weeks prior, costing Tower NZ$55 million.