Tower Australia lifts full-year profit by 45 per cent

Jim Minto

Tower Australia has posted a full-year profit figure for the year ended September 30, 2006, of NZ$48.7 million, which represents an increase of 45 per cent on the 2005 result.

Tower group managing director Jim Minto said: “We maintained focus this year on the same three key levers that we’ve been pulling now for three years. That’s looking to grow our sales above market rates, improving our retention rates and tightly managing costs.

“That together with the merger with Prefsure has seen this business acquire significant scale and become the third largest life insurer,” he added.

During the year, individual lump sum sales rose by 38 per cent and group sales also climbed by 14 per cent. Tower’s in-force life insurance premiums now stand at $612 million.

Overall, the Tower group reported a financial year-end profit after tax of NZ$63.5 million, up from NZ$40.9 million achieved in the previous 12 months. This represented an increase of 55 per cent.

In line with the strong group result, Tower New Zealand also grew its profit for 2006 from NZ$24.8 million in 2005 to NZ$33.8 million, a jump of 36 per cent.

Moving ahead, Minto said the company wanted to grow by at least 50 per cent stronger than the market.

“We want to grow our position through the adviser channels, a traditional strength of Tower, really strong service, and business to business partnering,” he explained.

In terms of its funds management arm, Tower was looking to achieve an improved streamlining of its operations.

“There’s real work to do around collapsing old legacy IT systems that support our investment business, getting rid of those costs and simplifying it. There’s a little bit of pain to do that but there is value at the end if we can deliver that properly,” Minto said.