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Tower Limited shares rose after the New Zealand insurer raised its forecast for underlying profit in the year ended September 30, 2026, citing large-event claims that were lower than the allowance built into its previous outlook. In a market announcement on October 6, Tower said it now expects underlying net profit after tax (NPAT) of NZ$69 million to NZ$79 million, up from NZ$55 million to NZ$65 million.
Investing.com reported that the stock gained as much as 2% to NZ$2.08 after the update. The company’s announcement did not discuss the share-price move. Tower said the figures are preliminary and unaudited; it plans to release its full FY26 results on November 26.
Claims below allowance account for the upgrade
Tower had included a NZ$45 million allowance for large-event claims in its FY26 guidance, which assumed the allowance would be fully used. Instead, the insurer recorded about NZ$25 million in such claims during the year. The resulting roughly NZ$20 million difference is expected to add NZ$14 million to underlying NPAT after tax, the company said.
The NZ$14 million uplift is therefore linked to a better-than-budgeted claims outcome, rather than a newly announced increase in premiums or a change to the company’s full-year sales target. The final earnings figure remains uncertain until the accounts are completed and reported.
FY25 provides an unusually strong comparison
Tower described FY26 as a return to a more typical earnings profile after FY25, when weather and claims experience were unusually favourable. The distinction matters when assessing the new range: it is a preliminary estimate for a particular financial year, not a forecast that the higher earnings level will continue unchanged.
Tower reported underlying NPAT of NZ$107.2 million for FY25, a record result at the time, compared with NZ$83.5 million in FY24. The company’s November release is expected to provide the audited FY26 figures and fuller detail on how this year’s performance compares with that exceptional prior period.
Customer growth outpaced premium growth
Alongside the profit update, Tower reported that its customer base expanded 8% over FY26 to 345,000. It attributed the increase primarily to growth in New Zealand home insurance policies and the contribution of new and existing partnerships.
Gross written premiums rose 3%, which Tower said was consistent with its low-single-digit growth guidance. The company said competitive pricing supported affordability and customer growth, while broader use of risk-based pricing was intended to strengthen portfolio quality and reduce exposure to weather-related impacts.
Those figures show different movements in customer numbers and premiums, but the announcement does not provide enough detail to determine how much was due to product mix, policy size, pricing or other factors. Tower’s full results may provide further breakdowns.
Reinsurance costs and reported-profit caveat
Separate reporting by Insurance Business said Tower’s reinsurance spending declined to 10.7% of gross written premium in FY26, from 13.3% in FY25, following the renewal of its reinsurance programme. That cost movement offers further context for the insurer’s financial performance, although Tower’s October 6 guidance announcement identified the unused large-event allowance as the reason for the profit upgrade.
The company also cautioned that reported profit will be affected by non-underlying items, including additional customer-remediation programme costs incurred in the second half. It did not quantify those further costs in the guidance update, so the preliminary underlying NPAT range should not be read as the expected reported net profit.
Full results due November 26
Tower said it will publish full details of FY26 performance on November 26. That release will replace the preliminary, unaudited estimate with the company’s reported results and clarify the effect of remediation costs and other items on reported earnings.
Until then, the company has not provided a new FY27 profit outlook in the October 6 announcement. Investors also await the complete financial statements and any additional discussion of claims, pricing, customer trends and reinsurance. The verified near-term development is the higher FY26 underlying-profit range, driven primarily by event claims coming in below the amount Tower had budgeted.
