Tower Limited Half Year Report 2018

Tower Limited
2018
half year
report

01
Tower Management Review
Tower Limited Interim Financial Statements
Independent Review Report
Tower Directory
Tower Limited
report
For the half year ended
31 March 2018
2
11
34
36

02
‰oƶer Ximited half year report 2018
Features of half year 2018
• Transformation of core business well
underway, with the core New Zealand
book achieving strong annual Gross
Written Premium (GWP) growth of 15.6%
and almost doubling policy growth with
9,634 policies added in the first half
1
• Business as Usual (BAU) claims costs
controlled, and expenses contained
against a backdrop of severe and
unprecedented weather
• Continued positive progress closing
Canterbury earthquake claims, with a 46%
reduction in open claims in the 12 months
since 31 March 2017, and 253 open claims
remaining
• Reported half year loss after tax of $11.6
million impacted by:
·$16.2 million after-tax resolution
of Peak Re dispute
·Slight adjustment of $2.3 million
in after-tax provisions for Canterbury
• Severe and unprecedented weather
events which reduced underlying profit
after-tax by $5 million to $7.3 million
• Decision made to invest in a new IT
platform to accelerate transformation and
momentum and deliver improved results
Half year summary
Tower has strong underlying New Zealand
and Pacific businesses with its transformation
driving solid business results.
The potential of the Tower business is now
visible, with strong growth in GWP and
customer numbers, controlled BAU claims
costs, and contained expenses, all achieved
against the backdrop of an unprecedented
number of large and severe weather events
which have affected the underlying result.
Tower reported a loss after tax of $11.6 million
for the six months ended 31 March 2018
(HY18), compared to a loss of $8.2 million for
the six months ended 31 March 2017 (HY17).
Tower’s HY18 result was impacted by the
settlement of the Peak Re dispute and severe
and unprecedented weather.
Tower delivered an underlying profit after tax
of $7.3 million for HY18, a slight decline from
$8.1 million in HY17.
The growth and positive momentum in
the underlying business shows Tower’s
transformation is well underway. Thanks to
the implementation of risk based pricing and
improvements in digital, Tower added 9,634
policies to its core New Zealand portfolio,
seeing GWP for the half grow 15.6% to
$111.3 million.
Tower’s claims costs were controlled at
$74.4 million despite experiencing one of the
worst years for weather events in the past 25
years. A continued focus on non-personnel
costs saw the management expense ratio
maintained, while still allowing further
investment in the business.
Tower’s Pacific premium remains stable and
in line with the same period in the prior year,
however, underlying profit of $0.2 million has
been impacted by large commercial claims
and Cyclone Gita.
Tower Management Review
Half year to 31 March 2018
1. Core refers to the NZ business, excluding the ANZ
legacy portfolio.

03
Tower continues to make solid progress
settling claims in Canterbury, reducing open
claims by 70. In September 2017, Tower
had 323 property claims remaining. In the
intervening 6 months, the number of open
Canterbury earthquake claims was reduced
by 159. However, 66 new claims from the
Earthquake Commission (EQC) were received
and 23 closed claims were reopened.
Financial performance
The strong growth and positive trends seen
in HY18 have been offset by the resolution of
the Peak Re dispute and a number of severe
and unprecedented weather events.
Tower’s reported loss of $11.6 million reflects
a $16.2 million impact from the Peak Re
settlement and a further $2.3 million after-tax
impact due to movements in Canterbury
provisions.
Severe and unprecedented storm activity
resulted in a $5 million after tax impact to
Tower’s underlying profit, seeing it decline
slightly to $7.3 million, from $8.1 million in the
same period last year.
Despite this, a focus on improving the
underlying business enabled Tower
to deliver an underlying result where
GWP increased to $161 million, a $15.2
million improvement compared to HY17.
Management and sales expenses were
maintained at $52.1 million and total claims
costs were contained at $74.4 million, despite
the storm events experienced in the half.
Group profit summary
NZ$mHY 18HY 17
Gross written premium161.0145.8
Gross earned premium159.6150.5
Reinsurance costs(25.5)23.8
Net earned premium134.1126.8
Net claims expense(67.9)(59.6)
Large events(6.5)(5.1)
Management and sales
expenses
(52.1)(51.8)
Underwriting profit7.610.4
Investment revenue and
other revenue
3.82.4
Financing costs(0.4)(0.2)
Underlying profit before tax11.012.6
Income tax expense(3.7)(4.5)
Underlying profit after tax
1
7.38.1
PeakRe settlement(16.2)0.0
Christchurch impact(2.3)(9.8)
Kaikoura impact0.5(7.2)
Corporate transaction costs(0.2)(1.0)
Revaluation of PacificRe(0.7)0.0
Business in runoff0.01.7
Reported loss after tax(11.6)(8.2)
Key ratios
Loss ratio55.5%51.0%
Expense ratio38.9%40.8%
Combined ratio94.3%91.8%
1. Underlying profit does not have a standardised meaning prescribed by Generally Accepted Accounting Practice
(GAAP) and may not be comparable to similar measures presented by other entities. While Tower has applied a
consistent approach to measuring underlying profit in the current and comparative periods, it is not subject to audit or
independent review. Tower uses underlying profit as an internal reporting measure as management believes it provides
a better measure of Tower’s underlying performance than reported profit, as it excludes large or non-recurring items
that may obscure trends in the underlying performance of the Tower group. Tower considers that underlying profit is
useful to investors as it makes it easier to compare the underlying financial performance of Tower between periods.

61
-30
50
38
39
1
39
47
50
50
60
59
25
As at
30 Sep-17
As at
31 Mar-18
Post
capital
raise
as at
31 Dec-17
100%
180%
200%
300%
39
04
‰oƶer Ximited half year report 2018
Solvency position
Tower holds significant capital over and
above the minimum regulatory requirement.
As at 31 March 2018, following the
Peak Re settlement and the weather
events earlier this year, Tower Insurance
Limited held approximately $75 million of
solvency margin, $25 million above RBNZ
requirements, with an additional $39 million
cash held in Tower Limited. As at 31 March,
the combination of Tower Insurance Limited’s
solvency margin and corporate cash were
$64 million above RBNZ requirements
and $114 million above Tower Insurance
Limited’s minimum solvency capital (MSC)
requirements, equivalent to 294% of MSC.
Tower’s Board and management team
remain strongly committed to paying
dividends and the Board intends to
recommence dividends at the 2018 Full Year,
subject to financial performance.
Solvency position plus corporate cash
Tower Insurance Limited NZ $ Millions
Net cash held in corporate
TIL’s solvency margin above RBNZ minimum
TIL’s RBNZ minimum solvency margin
TIL’s MSC
BNZ facility (drawn May 2017, repaid December 2017)
Transformation is
accelerating momentum
Tower holds a unique position in the New
Zealand insurance market, with a solid
existing customer base, yet plenty of room to
grow. With a clear strategic plan to continue
transforming and growing the business, the
achievements seen to date show that there
is a powerful platform for future growth.
Tower has seen solid improvements in
crucial areas:
• Focus on customers has delivered strong
policy and GWP growth
• Tight management of claims processes
and supplier networks resulted in
contained claims costs, despite
experiencing one of the worst years for
weather in 25 years
• Management expenses ratio has reduced,
while continuing to invest

05
Focus on customers
delivers growth
Achievements
• Strong GWP growth of 15.6% in core book,
due to a combination of pricing (10.0%) and
volume growth (5.6%)
• Policy growth almost doubled on HY17 in
core New Zealand book
• 39% of new business sales online in March
2018, compared to 24% in March 2017
• New approach to pricing combined
with simple and easy products driving
impressive customer growth and improved
mix
• Tower Direct retention levels remain steady
Tower’s focus on customers has seen
continued growth in its core New Zealand
portfolio in HY18, with 9,634 policies added
to the core book and GWP increasing 15.6%.
With Tower’s new product suite fully
available online, and continued refinement
and optimisation of the digital sales
channels, more customers are quoting and
buying insurance from Tower through their
mobile, tablet or computer, delivering a
significant uplift in new business sales.
Encouraging existing customers to stay with
Tower through targeted retention initiatives
and offerings has seen retention rates solidify
at high levels.
This positive result is being achieved through
a combination of:
• building and refining Tower’s digital offering
and online sales process
• working harder to attract new customers to
Tower, particularly in attractive segments
which are actively targeted
• new products making it easier for Tower’s
team to convert sales leads
• tailored, targeted insurance offers available
for customers using digital channels
Claims and underwriting update
Achievements
• Implemented risk based pricing
• Numerous product updates, pricing
reviews and targeted rate changes across
all New Zealand portfolios
• Supply chain and preferred supplier
initiatives minimising expenses
• Introduced a new data store, enabling
more accurate monitoring of portfolios
Tower introduced risk-based pricing for
earthquakes in April 2018, which will provide
significant competitive opportunity in lower
risk areas, and deliver fairer, more equitable
pricing across all of New Zealand.
Along with this, Tower is actively managing
its portfolio and delivering simple and easy
insurance, which is helping attract the
right customers to Tower. This focus on
underwriting excellence has helped control
claims costs despite an unprecedented
number of weather events.

06
‰oƶer Ximited half year report 2018
Recent storms have resulted in large event
claims increasing from $2.4 million in the
second half of 2017 to $6.5 million in HY18,
after releases from large events in the prior
year. Storms have offset all positive impacts
claims initiatives are having, with claims costs
contained at $74.4 million.
Claims costs are being closely managed
through:
• better risk selection and underwriting
processes
• tighter management of end-to-end claims
supply chain
• simpler policy wordings enabling
customers and claims teams to easily
understand exactly what customers are
entitled to
• regular review and improvements to policy
wordings, including the capping of meth
benefits and removal of excess refund
• continued focus on claims leakage and
recoveries
Severe and unprecedented
storm events
Weather events
• FY17 was the worst year for weather
impacts in 25 years
• Seven months into the full 2018 financial
year, weather and storm impacts are
already higher than the full prior year
• Initial estimates of losses for April 2018
events is $9.0 million, with the after
reinsurance impact expected to be around
$3.8 million before tax
• Tower expects its non-catastrophe
aggregate reinsurance programme to be
fully utilised this financial year
• Tower has been pricing further aggregate
reinsurance cover for the remaining 4
months of the year, to manage further
volatility driven by multiple weather events
While Tower’s aggregate reinsurance cover
is helping to absorb some of the costs of the
recent storm volatility, the financial impact of
the four weather events in HY18 is $7 million
before tax.
Tower’s initial estimates indicate that the cost
of the April storms will be $9 million, with
the before tax, and after reinsurance impact,
estimated to be around $3.8 million.
The impact of all storms in 2018 already
exceeds those of the prior full year, with the
total cost estimated to be $24 million, with
reinsurance absorbing $13.2 million.
The unprecedented number and severity
of weather events will have implications for
insurance premiums. Increased claims will
see reinsurance costs rise, and as a result,
will mean premium increases for customers.
Tower is putting in considerable effort and
taking all appropriate steps to preserve
capital and reduce any volatility from these
short-term weather abnormalities.

07
Focus on costs
Achievements
• Maintained focus on efficiency and
productivity
• Investment made to deliver ongoing and
sustainable cost management
• Continued review of existing supplier
contracts and close management of all
contract negotiations
Tower has maintained its focus on non-
personnel related costs, reducing the
management expense ratio to 38.9% in HY18,
compared to 40.8% HY17.
Tower’s efforts have been driven by:
• implementing new performance,
development and achievement
frameworks that drive performance,
resulting in greater efficiency and
productivity
• identifying and reducing expenditure for
business and technology support services
and building capability internally
Tower expects expenses will continue
to stabilise as simplification programme
initiatives are embedded.
Opportunity to drive growth
and quality in the Pacific
The underlying Pacific business remains
strong and Tower continues to believe that
there is unrealised potential here.
Pacific GWP for HY18 was $27.8 million,
reflecting a slight drop on HY17. This slight
decrease is partly due to strengthening of
the NZ dollar relative to Pacific currencies.
In core Pacific markets of Fiji, Vanuatu,
Samoa and American Samoa, solid growth
has been seen. However, this growth has
been offset with GWP in PNG reducing
significantly over the past two years,
reflecting a very soft commercial lines
market and a desire to reduce Tower’s risk
profile appropriately in the country.
Underlying Net Profit After Tax (NPAT) of $0.2
million for the first half reflects the impact of
Cyclone Gita, a number of large claims and
investment in a new Pacific hub.
Tower’s plan for the Pacific is to leverage the
underwriting excellence, data and pricing
capability of the New Zealand business and
combine it with the local knowledge and
expertise of the teams in the region.
The Pacific hub will deliver quality and
consistency across all Pacific teams with
local underwriting and claims management
expertise ensuring that the right controls are
in place when pricing and writing risk, and
accepting claims. This will ultimately enable
better quality growth across the region by
allowing local branches to do what they do
best, service and sell to their customers.

08
‰oƶer Ximited half year report 2018
IT simplification
The key to accelerating Tower’s
transformation is a new IT platform that
enables the simplification of products and
processes. This will remove complexity for
frontline teams and enable the delivery
of a unique and revolutionary customer
experience.
Combined with Tower’s push to move 50% of
all transactions online, removing complexity
from the business will deliver significant cost
savings and productivity gains.
With Tower’s Board having approved
investment in a new IT platform, work is
now underway to deliver on a programme
of work that will accelerate momentum and
enable Tower to rapidly respond in today’s
constantly changing digital landscape.
Tower will be able to combine existing data
with that of partners to increase market
share by actively targeting niche customer
segments with compelling and appropriately
priced propositions.
Other key benefits to be seen from Tower’s
new IT platform include the ability to:
• create and deliver a unique customer
experience
• quickly deliver simple, customer focussed
products
• target specific, profitable customer
segments through granular, and
automated pricing and underwriting
• charge fairer and more accurate premiums
through improved access to, and use of,
internal and external data
• easily experiment with products and
pricing
• rationalise products and reduce claims
costs by improving the customer claims
journey and overall claims management
• significantly reduce our cost base and
realise large productivity gains by moving
low value transactions online
• add value through improved employee
engagement
Tower’s approach to implementing this new
IT platform is designed to deliver on a dual
purpose – accelerate transformation and
protect and realise shareholder value.
A significant amount of work has already
been completed to ensure that this
programme of work will deliver benefits,
create no future legacy issues and avoid the
pitfalls that many other organisations face
when replacing their core IT platform.
A robust governance approach and clear
roadmap forward will enable Tower to
commence selling new business on the new
platform in the first half of the 2019 calendar
year. Once new business is live, migration of
the existing book can start.

09
Canterbury update
As has been regularly reiterated by Tower
and other industry players, the ongoing
legacy of the Canterbury earthquakes has
resulted in significant issues for customers
and insurers, with the receipt of EQC over-
cap claims continuing in 2018.
Tower continues to make solid progress
settling claims in Canterbury, reducing open
claims by 70. In September 2017, Tower
had 323 property claims remaining. In the
intervening 6 months, the number of open
Canterbury earthquake claims was reduced
by 159. However, 66 new claims from the
EQC were received and 23 closed claims
were reopened.
Reserving update
NZ$mMar-18
% of case
estimates
2
Sep-17
% of case
estimates
2
Mar-17
% of case
estimates
2
Sep-16
% of case
estimates
2
Case estimates48.058.973.993.2
IBNR/IBNER
1
22.034.447.444.0
Risk margin10.813.918.211.9
Additional risk margin10.010.0--
Combined
IBNR/IBNER/risk margin
42.889%58.399%65.689%55.960%
Gross outstanding claims90.8117.2139.5149.1
1. IBNR/IBNER includes claims handling expenses.
2. Ratio of IBNR/IBNER plus risk margin to case estimates.
Tower’s outstanding case estimates have
almost halved since September 2016. This
demonstrates that solid progress is being
made. In addition, the amount of IBNR/
IBNER
1
and risk margin has increased from
60% to 89% of case estimates.
While Tower is making significant progress
closing claims, the need for a permanent
fix grows ever more pressing and Tower
welcomes the recent government
announcement of an enquiry into EQC as an
important first step.
EQC Act reform will assist in ensuring past
experience is not repeated and that the
pitfalls and problems associated with the
EQC set up and the 2010 model can be
avoided. Tower strongly believes that the
Kaikoura model is successful and that any
reform of the EQC must include these
changes.

10
‰oƶer Ximited half year report 2018
EQC receivables
As previously advised, Tower has
commenced recovery action against EQC
and remains confident in its position.
It is important to note the differences
between the Peak Re outcome and EQC
receivables. The Peak Re dispute was
subject to a single issue meaning that, if it
had gone to arbitration, there would either
be a 100% recovery or nothing.
The EQC receivables have multiple
dimensions, each with alternative courses
of action. Tower estimates total potential
recoveries to be significantly higher than
the $66.9 million recorded in its financial
statements. The recorded number reflects
the discounted actuarial reviewed value.
While Tower has commenced recovery
action in regards to one subset of the land
dispute with EQC, resolution of the entire
receivable is expected to occur in stages,
over a number of years.
In respect to the building component, Tower
has commenced discussions with EQC
through an alternative dispute resolution
process and continues to apply significant
resources to the EQC recovery programme.
Based on legal advice to date, Tower
remains confident in its position.
Outlook
Tower is transforming, and the continued
improvements seen in the underlying
business will deliver long-term shareholder
value. With investment in a new IT platform
being made, momentum will now accelerate.
Tower remains focussed on progressing
initiatives that will drive results:
• Delivering what customers want and
constantly refining the customer
experience offering to ensure growth
continues
• Risk based pricing will enable targeting of
profitable customers in low-risk regions
• Continued use of data and customer
feedback to improve conversion rates
through our digital channels
• A continued focus on the efficient
management of claims and improved
business processes will see the
stabilisation of BAU claims costs and
management expenses.
This focus will support the achievement of
Tower’s medium term targets:
• drive GWP growth of 4 – 6%
• reduce expense ratio to below 35%
• deliver return on equity of 12 – 14% through
the cycle
Tower is being transformed and the work
underway will deliver significant long-term
value.

11
Tower Limited
Interim Financial
Statements and
Independent
Review Report
For the half year ended
31 March 2018
Consolidated Income Statement 12
Consolidated Statement of Comprehensive Income 13
Consolidated Balance Sheet 14
Consolidated Statement of Changes in Equity 15
Consolidated Statement of Cash Flows 16
Notes to the Interim Financial Statements 17-32
Independent Review Report 34-35

12
‰oƶer Ximited half year report 2018
The above statement should be read in conjunction with the accompanying notes.
Tower Limited
Consolidated Income Statement
For the half year ended 31 March 2018
FOR THE HALF YEAR ENDED
NOTE
31 MARCH
2018
UNAUDITED
$000
31 MARCH
2017
UNAUDITED
$000
Revenue
Premium revenue4159,615 150,540
Less: Outwards reinsurance expense(25,476)(23,763)
Net premium revenue 134,139 126,777
Investment revenue52,939 3,553
Fee and other revenue1,418 1,441
Net operating revenue138,496 131,771
Expenses
Claims expense129,248 133,558
Less: Reinsurance recoveries revenue(40,353)(36,092)
Net claims expense6, 788,895 97,466
Management and sales expenses 41,389 44,098
Acquisition proposal expenses302 721
Impairment of reinsurance receivables222,508 –
Financing expenses440 164
Total expenses153,534 142,449
Loss attributed to shareholders before tax(15,038)(10,678)
Tax benefit attributed to shareholders’ profits3,418 2,496
Loss for the half year(11,620)(8,182)
(Loss) profit attributed to:
Shareholders(11,535)(8,447)
Non-controlling interest(85)265
(11,620)(8,182)
Basic and diluted (loss) per share (cents)12(4.14)(4.11)

13
8LI EFSZI WXEXIQIRX WLSYPH FI VIEH MR GSRNYRGXMSR ȅMXL XLI EGGSQTER]MRK RSXIW
Tower Limited
FOR THE HALF YEAR ENDED
NOTE
31 MARCH
2018
UNAUDITED
$000
31 MARCH
2017
UNAUDITED
$000
Loss for the half year(11,620)(8,182)
Other comprehensive (loss) income
Currency translation differences(1,491)769
Other comprehensive (loss) income net of tax(1,491)769
Total comprehensive loss for the half year(13,111)(7,413)
Total comprehensive (loss) income attributed to:
Shareholders (12,996)(7,742)
Non-controlling interest(115)329
(13,111)(7,413)
Consolidated Statement of Comprehensive Income
For the half year ended 31 March 2018

14
‰oƶer Ximited half year report 2018
The above statement should be read in conjunction with the accompanying notes.
Tower Limited
AS AT
NOTE
31 MARCH
2018
UNAUDITED
$000
30 SEPTEMBER
2017
AUDITED
$000
Assets
Cash and cash equivalents142,628 102,876
Receivables 9251,207 279,075
Investments15157,253 167,702
Derivative financial assets1578 231
Deferred acquisition costs21,186 20,961
Current tax assets13,921 13,462
Property, plant and equipment 7,951 8,780
Intangible assets31,570 31,334
Deferred tax assets37,111 32,745
Total assets662,905 657,166
Liabilities
Payables69,575 68,824
Current tax liabilities121 560
Provisions4,507 5,773
Insurance liabilities7, 10320,164 336,004
Borrowings11 – 29,921
Deferred tax liabilities533 340
Total liabilities394,900 441,422
Net assets268,005 215,744
Equity
Contributed equity12447,547 382,172
Accumulated losses(62,837)(51,299)
Reserves(117,915)(116,454)
Total equity attributed to shareholders266,795 214,419
Non-controlling interest1,210 1,325
Total equity268,005 215,744
The interim financial statements were approved for issue by the Board on 29 May 2018.
Michael P Stiassny Graham R Stuart
Chairman Director
Consolidated Balance Sheet
For the half year ended 31 March 2018

15
8LI EFSZI WXEXIQIRX WLSYPH FI VIEH MR GSRNYRGXMSR ȅMXL XLI EGGSQTER]MRK RSXIW
Tower Limited
ATTRIBUTED TO SHAREHOLDERS
UNAUDITED
NOTE
CONTRIBUTED
EQUITY
$000
ACCUMULATED
LOSS
$000
RESERVES
$000
TOTAL
$000
NON-
CONTROLLING
INTEREST
$000
TOTAL
EQUITY
$000
Half year ended
31 March 2018
At the beginning
of the half year 382,172 (51,299)(116,454) 214,419 1,325 215,744
Comprehensive income
(Loss) for the half year – (11,535) – (11,535)(85)(11,620)
Currency translation
differences – – (1,461)(1,461)(30)(1,491)
Total comprehensive loss–(11,535)(1,461)(12,996)(115)(13,111)
Transactions
with shareholders
Net proceeds
of capital raise1265,375 – – 65,375 – 65,375
Other – (3) – (3) – (3)
Total transactions
with shareholders65,375 (3) – 65,372 – 65,372
At the end of
the half year447,547 (62,837)(117,915)266,795 1,210 268,005
Half year ended
31 March 2017
At the beginning
of the half year 382,172 (42,822)(116,772) 222,578 1,374 223,952
Comprehensive income
(Loss) Profit for
the half year – (8,447) – (8,447)265 (8,182)
Currency translation
differences – – 705 705 64 769
Total comprehensive loss – (8,447)705 (7,742)329 (7,413)
Transactions
with shareholders
Dividends paid – – – – (142)(142)
Other – (3) – (3) – (3)
Total transactions
with shareholders – (3) – (3)(142)(145)
At the end of the half year382,172 (51,272)(116,067)214,833 1,561 216,394
Consolidated Statement of Changes in Equity
For the half year ended 31 March 2018

16
‰oƶer Ximited half year report 2018
The above statement should be read in conjunction with the accompanying notes.
Tower Limited
FOR THE HALF YEAR ENDED
NOTE
31 MARCH
2018
UNAUDITED
$000
31 MARCH
2017
UNAUDITED
$000
Cash flows from operating activities
Premiums received 152,879 153,152
Interest received 3,723 3,771
Net realised investment gains (losses)321 (2,247)
Fee and other income received1,418 1,439
Reinsurance received40,903 24,819
Reinsurance paid(28,527)(24,099)
Claims paid(124,782)(135,367)
Payments to suppliers and employees (44,129)(42,114)
Income tax paid(1,688)(2,698)
Net cash inflow (outflow) from operating activities 14118 (23,344)
Cash flows from investing activities
Net proceeds from financial assets8,010 6,986
Purchase of property, plant and equipment and intangible assets(2,954)(5,107)
Net cash inflow (outflow) from investing activities 5,056 1,879
Cash flows from financing activities
Share issue net of costs1265,775 –
Financing expenses(609)(287)
Repayment of borrowings(30,000) –
Payment of non-controlling interest dividends – (142)
Net cash inflow (outflow) from financing activities 35,166 (429)
Net increase (decrease) in cash and cash equivalents40,340 (21,894)
Foreign exchange movement in cash(588)(233)
Cash and cash equivalents at the beginning of the half year 102,876 92,228
Cash and cash equivalents at the end of the half year 142,628 70,101
Consolidated Statement of Cash Flows
For the half year ended 31 March 2018

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
17
1. Summary of general accounting policies
Entities reporting
The interim 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.
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.
Basis of preparation
The interim financial statements of the Group have been prepared in accordance with New Zealand Generally
Accepted Accounting Practice (NZ GAAP), and for the purposes of NZ GAAP, the Group is a for-profit
entity. They comply with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial Reporting and
consequently include a lower level of disclosure than is required for annual financial statements.
The interim financial statements of the Group have been prepared in accordance with the requirements of the
NZX Main Board Listing Rules.
The interim financial statements should be read in conjunction with the annual financial statements for the year
ended 30 September 2017, which have been prepared in accordance with International Financial Reporting
Standards and New Zealand Equivalents to International Financial Reporting Standards.
The interim financial statements for the six months ended 31 March 2018 are unaudited.
Accounting policies
The principal accounting policies adopted in the preparation of the interim financial statements are consistent
with those of the audited annual financial statements for the year ended 30 September 2017.
Cash flows
The consolidated statement of cash flows presents the net changes in cash flow for financial assets. Tower
considers that knowledge of gross receipts and payments is not essential to understanding certain activities of
Tower based on either: the turnover of these items is quick, the amounts are large, and the maturities are short
or the value of the sales are immaterial.
Comparatives – Change in presentation of receivables and payables
Comparative information for receivables and payables has been reclassified to achieve consistency with the
current year presentation. Changes relate to balance sheet reclassifications only. There is no change to net
assets or the 2017 income statement.
In 2017 amounts payable to reinsurers on receipt of the amount receivable from EQC for recoveries related
to the Canterbury earthquakes of $17.7 million were netted off reinsurance receivables. To achieve consistent
presentation the 2017 comparative has been adjusted as below.
On the Balance sheet, 2017 receivables increased $17.7 million to $279.1 million and 2017 payables increased
$17.7 million to $68.8 million. Total assets and total liabilities have increased accordingly. There is no change to
net assets.
Within Note 8 Segment reporting, the 2017 total assets for New Zealand has increased $17.7 million to $499.2
million and the 2017 total liabilities for New Zealand has increased $17.7 million to $353.3 million.
Within Note 9 Receivables, the 2017 balance for reinsurance recovery receivables has increased $17.7 million
to $81.6 million.
Impact of amendments to NZ IFRS
The application of new or amended accounting standards as of 1 October 2017 has not had a material impact
on the financial statements.

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
18
‰oƶer Ximited half year report 2018
2. Impairment of reinsurance receivables
On 28 February 2018, Tower Limited announced it had entered into a settlement agreement with Peak Re
regarding an adverse development cover policy entered into in 2015. Under the settlement agreement Tower
received $22.0 million of the $43.75 million claimed under the reinsurance contract and all sums claimed in
the arbitration proceeding. This has resulted in a write off of the residual amount of $21.75 million. This amount
along with associated professional fees of $0.76 million have been recorded in the Consolidated Income
Statement as Impairment of reinsurance receivables.
3. Critical Accounting Judgements And Estimates
The Group makes estimates and judgements in respect of certain key assets and liabilities. Estimates and
judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. Key areas where
critical accounting estimates and judgements have been applied are noted below.
Claims estimation
The valuation of net outstanding claims is an area of significant judgement and estimation. Key elements of
judgement included within claims estimations are: the rate of claims closure; the quantum of closed claims
reopening; the level of future increases in building and other claims costs; future claim management expenses;
assessments of risk margin; apportionment of claims costs between the four main earthquake events; and the
quantum of new claims being received from EQC and the average cost of these claims.
Key elements of judgement included within recoveries estimations are: the collectability of reinsurance
recoveries (includes consideration of factors such as counterparty and credit risk); recoveries from EQC in
respect of land damage and building costs; and the assessments of risk margin. The nature of estimation
uncertainties, including from those factors listed above, mean that actual claims experience may deviate from
reported results.
Refer to Note 7 for further detail on the Canterbury earthquakes.
EQC recoveries
Valuation of additional EQC recoveries in respect of building costs and land damage is an area of significant
judgement and estimation. Areas of judgement and subjectivity exist in assessments of: claim file review
of earthquake event allocation; the quality of assessment information; litigation risk factors; and portfolio
conservatism. Tower has filed a statement of claim against EQC in respect of land damage recoveries.
Refer to Note 7 and Note 9 for further detail on EQC recoveries for Canterbury earthquakes and Note 9 for
details on EQC recoveries in relation to the Kaikoura region earthquake.
Deferred taxation
Recognition of deferred tax assets is an area of significant judgement and estimation. Deferred tax assets of
$31.3 million (30 September 2017: $27.0 million) have been recognised for unused tax losses on the basis it is
probable that future taxable profits will be available against which the losses can be utilised and there will be
continuity of ownership (of greater than 49%). Significant management judgement and estimation is required
to determine the amount of deferred tax assets recognised, based on the likely timing and quantum of future
taxable profits. This assessment is completed on the basis of the approved strategic plans of Tower Limited
and subsidiaries within the consolidated tax group. If future profits do not occur as expected, or there is a
significant change in ownership, Tower may not be able to utilise all of these tax losses.
Capitalised IT development costs
Capitalisation of IT development costs is an area of judgement and estimation. The application of NZ IAS 38
Intangible Assets includes accounting considerations required for capitalisation of IT projects. When applying
NZ IAS 38, areas of judgement include consideration of impairment indicators, economic useful life, previous
Board impairment decisions and potential impacts from acquisition proposals.

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
19
4. Premium revenue
FOR THE HALF YEAR ENDED
31 MARCH
2018
UNAUDITED
$000
31 MARCH
2017
UNAUDITED
$000
Gross written premiums160,980 145,825
Less: Gross unearned premiums(1,365)4,715
Premium revenue159,615 150,540
5. Investment revenue
FOR THE HALF YEAR ENDED
NOTE
31 MARCH
2018
UNAUDITED
$000
31 MARCH
2017
UNAUDITED
$000
Fixed interest securities
Interest income3,723 3,771
Net realised (loss)(160)(325)
Net unrealised (loss) gain(187)1,213
Total fixed interest securities3,376 4,659
Equity securities
Net unrealised (loss)15(745) –
Total equity securities(745) –
Other
Net realised gain (loss)481 (1,922)
Net unrealised (loss) gain(173)816
Total other308 (1,106)
Total interest and dividend income3,723 3,771
Total net realised gain (loss)321 (2,247)
Total net unrealised (loss) gain(1,105)2,029
Total investment revenue2,939 3,553

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
20
‰oƶer Ximited half year report 2018
6. Net claims expense
FOR THE HALF YEAR ENDED
NOTE
31 MARCH
2018
UNAUDITED
$000
31 MARCH
2017
UNAUDITED
$000
Canterbury earthquake claims (4 key events)73,200 13,600
Kaikoura earthquake claims(759)10,000
Other claims86,454 73,866
Total net claims expense88,895 97,466
7. Canterbury earthquakes
Tower has received 16,132 individual claims from customers as a result of earthquakes impacting the
Canterbury region during 2010 and 2011 (30 September 2017: 16,106 claims). Like other industry participants,
Tower continues to receive ‘over-cap’ claims from the Earthquake Commission (EQC). The growth in new
claims received has impacted Tower’s settlement rates during the year. Of all claims received, Tower has
settled 15,879 claims at 31 March 2018 (30 September 2017: 15,783 claims), representing a 98% settlement rate
by number of claims and 95% by value (30 September 2017: 98% by number and 93% by value). To date, Tower
has paid out more than $850 million to customers (30 September 2017: $825 million) in respect of the four
main earthquakes that occurred on 4 September 2010; 22 February 2011; 13 June 2011 and 23 December 2011.
As at 31 March 2018, Tower has estimated gross ultimate incurred claims of $897.6 million in respect of the four
main Canterbury earthquake events (30 September 2017: $897.4 million).
Outstanding claims comprises case estimates, claims incurred but not reported (IBNR) and risk margins. In
the half year ended 31 March 2018, case estimates have reduced as claims have been settled and paid. There
have been increased costs on remaining open claims; new over-cap claims being received from EQC; and new
litigated claims.
The financial cost to Tower of the Canterbury earthquakes is reduced through reinsurance and is reflected
within net outstanding claims. Tower continues to work closely with its catastrophe reinsurance partners as it
works through its Canterbury claims settlement programme. Catastrophe reinsurance partners are required to
have a financial strength rating of at least A- issued by a recognised international rating agency.
The table on the following page presents a financial representation of Tower’s net outstanding claims provision
at 31 March 2018 in relation to the four main earthquake events.

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
21
7. Canterbury earthquakes (continued)
Canterbury earthquake provisions
31 MARCH
2018
UNAUDITED
$000
30 SEPTEMBER
2017
AUDITED
$000
Insurance liabilities
Gross outstanding claims(80,800)(107,200)
Additional risk margin(10,000)(10,000)
(90,800)(117,200)
Receivables
Reinsurance recovery receivables10,600 13,600
EQC related to open claims4,200 5,800
Less: EQC payable to reinsurers(1,300)(1,700)
13,500 17,700
Net outstanding claims(77,300)(99,500)
Tower has one significant receivable amount related to closed Canterbury earthquake claims, being $66.9
million from EQC (30 September 2017: $65.1 million). $18.5 million of this EQC amount is payable to reinsurers
which has been allowed for in payables (30 September 2017: $17.7 million). A risk margin of $10.1 million has
been allowed for on the receivable from EQC (30 September 2017: $10.7 million).
During the year ended 30 September 2017, the Board elected to create an additional risk margin of $10.0
million over and above the provision of the Appointed Actuary, which is set at the 75
th
percentile probability
of sufficiency. This provision will remain at $10.0 million (30 September 2017: $10.0 million), subject to review
by the Board each half year and will be released once Canterbury Outstanding Claims Liability has sufficiently
run off.
The following table presents the cumulative impact of the four main Canterbury earthquake events on the
income statement.
NOTE
31 MARCH
2018
UNAUDITED
$000
30 SEPTEMBER
2017
AUDITED
$000
31 MARCH
2017
UNAUDITED
$000
Cumulative expenses associated with Canterbury
earthquakes:
Earthquake claims estimate(897,640)(897,440)(892,660)
Reinsurance recoveries721,873 746,623 744,133
Claim expense net of reinsurance recoveries(175,767)(150,817)(148,527)
Reinsurance expense(25,045)(25,045)(25,045)
Additional risk margin(10,000)(10,000) –
Cumulative impact of Canterbury earthquakes before tax(210,812)(185,862)(173,572)
Income tax benefit59,696 52,710 49,288
Cumulative impact of Canterbury earthquakes after tax(151,116)(133,152)(124,284)
Recognised in current period (net of tax)
Net claims expense6 (2,304)(11,460)(9,792)
Additional risk margin6–(7,200)–
Impairment of receivables2 (15,660) – –
(17,964)(18,660)(9,792)

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
22
‰oƶer Ximited half year report 2018
7. Canterbury earthquakes (continued)
The Board are actively engaged in monitoring Canterbury earthquake developments. Board process relies on
the Appointed Actuary’s determination of earthquake ultimate incurred claims estimates and the derivation
of estimated outcomes. Tower has 253 open claims at 31 March 2018 (30 September 2017: 323 open claims).
Recognising relative complexities which exist within remaining open claims, the Appointed Actuary has
reviewed each remaining property file with Tower claims staff. This individual claim methodology included
review of the latest specialist assessment reports and scope of works to repair or rebuild properties to
determine the propensity for future costs to vary. In addition, further provision was made for claims re-opening;
claims moving over the EQC cap of $100,000; claims in litigation and other claim categories.
The actuarial reviews performed during the half year ended 31 March 2018 identified the following as key
contributors to the increase in expected earthquake claims costs:
•Greater than anticipated new over-cap claims received from EQC;
•Continued growth in the level of litigation claims received;
•Continued development of claim costs as they progress through the claims life cycle; and
•Increase in the level of claims handling expenses;
The key elements of judgement within the claims estimation are as follows:
Claims
•the level of future increases in building and other claims costs
•the number of new litigated claims received and the average cost of these claims
•the number of new claims being received from EQC and the average cost of these claims
•the rate of closed claims reopening
•risk margin
•future claim management expenses, and
Recoveries
•collectability of reinsurance recoveries
•recoveries from EQC (including litigation risks) in respect of land damage and building costs
•risk margin.
Given the nature of estimation uncertainties (including those listed above) actual claims experience may still
deviate, perhaps substantially, from the gross outstanding claims liabilities recorded as at 31 March 2018. Any
further changes to estimates will be recorded in the accounting period when they become known.
The catastrophe reinsurance cover headroom remaining is included in the table below.
CATASTROPHE REINSURANCE
COVER REMAINING
31 MARCH
2018
UNAUDITED
$000
30 SEPTEMBER
2017
AUDITED
$000
Date of event
June 2011256,600254,200
December 2011486,900486,500
Tower has exceeded its catastrophe reinsurance limit in relation to the September 2010 and February 2011 events.

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
23
7. Canterbury earthquakes (continued)
Sensitivity analysis – impact of changes in key variables
Net outstanding claims are comprised of several key elements, as described earlier in this note. Sensitivity
of net outstanding claims is therefore driven by changes to the assumptions underpinning each of these
elements. The impact of changes in significant assumptions on the net outstanding claims liabilities, and hence
on Tower’s profit, are shown in the table below. Each change in assumption has been calculated in isolation of
any other changes in assumptions.
The impact of a change to claims costs is offset by reinsurance where there is reinsurance capacity remaining.
The impact will be nil where the change in claims costs is less than the remaining reinsurance capacity.
However, if the change in claims costs exceeds the reinsurance capacity then Tower’s profit will be impacted
by the amount of claims costs in excess of the reinsurance capacity.
The changes in the table below reflect the impact on Tower’s profits should that event occur.
SPLIT BETWEEN EVENTSFOUR MAIN EARTHQUAKES
CHANGE
VARIABLE
SEP
2010
UNAUDITED
$M
FEB
2011
UNAUDITED
$M
JUN
2011
UNAUDITED
$M
DEC
2011
UNAUDITED
$M
31 MAR
2018
UNAUDITED
$M
30 SEP
2017
AUDITED
$M
Outstanding claims:
(i)Change to costs and
quantity of expected
claim estimates including
building costs and other
impacts.
+ 5%
- 5%
(1.0)
1.0
(2.4)
2.4
–
–
–
–
(3.4)
3.4
(4.3)
4.3
(ii)Change in apportionment
of claim costs to / from
February 2011 event.
+ 1%
- 1%
6.4
(7.0)
(9.0)
9.0
–
–
–
–
(2.6)
2.0
(4.1)
2.0
Receivables:
Reinsurance recovery
receivables
(iii)Adverse development
cover
- 50%
- 100%
–
–
–
–
–
–
–
–
–
–
(21.9)
(38.8)
(iv)Recoveries from EQC in
respect of land damage
+ 10%
- 10%
0.1
(0.1)
0.7
(0.7)
–
–
–
–
0.8
(0.8)
0.8
(0.8)
(v)Recoveries from EQC in
respect of building costs
+ 10%
- 10%
3.3
(3.3)
1.0
(1.0)
–
–
–
–
4.3
(4.3)
4.1
(4.1)
(i)Calculated as the change in case estimates (net of EQC contributions) plus IBNR/IBNER and the impact
on Tower’s profit quantified. Changes in case estimates include over-cap claims, closed claims re-opening
and risk margin.
(ii)Calculated as 1% of total reported costs (net of EQC contributions) plus IBNR/IBNER moved to/from Feb
2011 event and the impact on Tower’s profit quantified.
(iii)Calculated as the impact on net outstanding claims due to 50% or 100% lower recoveries being received.

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
24
‰oƶer Ximited half year report 2018
8. Segmental reporting
NEW ZEALAND
$000
PACIFIC ISLANDS
$000
OTHER (HOLDING
COMPANIES &
ELIMINATIONS)
$000
TOTAL
$000
Half year ended 31 March 2018 (Unaudited)
Revenue
Revenue – external117,013 21,069 414 138,496
Total revenue 117,013 21,069 414 138,496
Profit (Loss) before income tax(14,859)508 (687)(15,038)
Income tax credit (expense)4,235 (1,010)193 3,418
Profit (Loss) for the half year(10,624)(502)(494)(11,620)
Half year ended 31 March 2017 (Unaudited)
Revenue
Revenue – external109,452 22,115 204 131,771
Total revenue 109,452 22,115 204 131,771
Profit (Loss) before income tax(16,777)6,696 (597)(10,678)
Income tax credit (expense)4,401 (2,283)378 2,496
Profit (Loss) for the half year(12,376)4,413 (219)(8,182)
Total assets 31 March 2018 (Unaudited)468,878 83,985 110,042 662,905
Total assets 30 September 2017 (Audited)499,232 82,664 75,270 657,166
Total liabilities 31 March 2018 (Unaudited)333,551 57,821 3,528 394,900
Total liabilities 30 September 2017 (Audited)353,302 54,483 33,637 441,422
Description of segments and other segment information
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 who reviews the operating results on a regular basis and makes decisions on
resource allocation and assessing performance. The chief operating decision-maker has been identified as the
Company’s Board of Directors.
New Zealand segment comprised general insurance business written in New Zealand. Pacific Islands segment
includes general insurance business with customers in Pacific Islands written by Tower subsidiaries and branch
operations. Other includes head office expenses, financing costs and eliminations.
Tower operates predominantly in two geographical segments, New Zealand and the Pacific region.

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
25
9. Receivables
31 MARCH
2018
UNAUDITED
$000
30 SEPTEMBER
2017
AUDITED
$000
Reinsurance recovery receivables38,269 81,647
Outstanding premiums and trade receivables 133,798 127,319
Other79,140 70,109
Total receivables251,207 279,075
Earthquake Commission receivables
Kaikoura Region Earthquake
In December 2016 Tower Insurance Limited, along with other private insurers, signed a Memorandum of
Understanding (MOU) with EQC whereby private insurers act as agents for the Crown agency in relation to
the Kaikoura region earthquake. Under the agreement, Tower directly lodges, assesses and settles home
and contents claims arising from the 14 November 2016 earthquake in the Kaikoura region, including claims
under EQC’s $100,000 cap for house claims and $15,000 cap for contents claims. Claims from earlier
earthquakes in the Canterbury region which are still open or unresolved are not part of this agreement with
EQC. The agreement with EQC provides for private insurers to get reimbursed for claim costs, including costs
of settlement and handling. At 31 March 2018, the amount due from EQC for reimbursement of claims handling
expenses and claims paid in relation to the Kaikoura event is $2.2 million (30 September 2017: $1.3 million).
Canterbury Earthquakes
Other receivables include an amount of $66.9 million due from EQC for land damage and building costs
relating to the Canterbury earthquake provisions as disclosed in Note 7 (30 September 2017: $65.1 million).
Tower estimates the gross amount receivable due from EQC is significantly higher than the $66.9 million, but
has adopted this amount, which is the actuarial valuation of the Appointed Actuary. The method by which the
actuarial valuation is completed recognises the inherent risk and uncertainty with recovery of the full gross
amount. An amount of $18.5 million (30 September 2017: $17.7 million) will be payable to reinsurers on receipt
from EQC of these balances and is included within payables in the balance sheet. The amount payable to
reinsurers may vary depending on the balance collected from EQC.
Tower acknowledges that the EQC recoveries relating to Canterbury earthquakes are an area of significant
accounting estimation and judgement, including earthquake event allocation, litigation risk factors and other
actuarial assumptions discussed in Note 7.
10. Insurance liabilities
31 MARCH
2018
UNAUDITED
$000
30 SEPTEMBER
2017
AUDITED
$000
Unearned premiums153,970 154,848
Outstanding claims156,194 171,156
Additional risk margin10,000 10,000
Total insurance liabilities320,164 336,004

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
26
‰oƶer Ximited half year report 2018
11. Borrowings
CURRENCY
INTEREST
RATE
ROLLOVER
DATE (DRAWN)
/ MATURITY
DATE
(UNDRAWN)
FACE
VALUE
$000
UNAMORTISED
COSTS
$000
CARRYING
VALUE
$000
FAIR
VALUE
$000
As at 31 March 2018 (Unaudited)
Bank facility (undrawn)NZDVariable9-Sep-1950,000 – – –
Total borrowings – – –
As at 30 September 2017 (Audited)
Bank facility (drawn)NZD4.51%13-Nov-1730,000 (79)29,921 29,921
Bank facility (undrawn)NZDVariable9-Sep-1920,000 – – –
Total borrowings(79)29,921 29,921
Standby credit facility
In May 2017, the company utilised the cash advance facility agreement. An amount of $30 million was drawn
(from the available $50 million). Funds were used for new share capital within Tower Insurance Limited.
In December 2017, the company repaid the drawn cash advance facility using funds obtained from the capital
raise.
Covenants
All borrowings are unsecured and are subject to various financial covenants. The Company has fully complied
with all covenants during the half year ended 31 March 2018.

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
27
12. Contributed equity
31 MARCH
2018
UNAUDITED
$000
30 SEPTEMBER
2017
AUDITED
$000
Opening balance382,172 382,172
Issue of share capital70,838 –
Costs of capital raise(5,463) –
Total contributed equity447,547 382,172
On 14 November 2017 the Company invited its eligible shareholders to subscribe to a rights issue of 1 new
share for every 1 existing share held at the record date on 22 November 2017 at a price of NZD0.42 (or
AUD0.39) for each new share. The issue was fully subscribed on 20 December 2017.
Represented by:
31 MARCH
2018
UNAUDITED
NUMBER
OF SHARES
30 SEPTEMBER
2017
AUDITED
NUMBER
OF SHARES
Opening balance168,662,150 168,662,150
Issued shares168,662,150 –
Total shares on issue337,324,300 168,662,150
Ordinary shares issued by the Group 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.
As a result of the rights issue, the weighted average number of ordinary shares have been adjusted
retrospectively for the bonus element of the rights issue. The basic and diluted (loss) per share for 31 March
2017 has been restated to reflect the change.
13. Net assets per share
31 MARCH
2018
UNAUDITED
$0
30 SEPTEMBER
2017
AUDITED
$0
Net assets per share0.79 1.28
Net tangible assets per share0.59 0.90
Net assets per share represent the value of the Group’s total net assets divided by the number of ordinary
shares on issue at the period end. Net tangible assets per share represent the net assets per share adjusted
for the effect of intangible assets and deferred tax balances. Net assets per share and net tangible assets per
share for 30 September 2017 have not been restated to reflect the bonus element of the rights issue.

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
28
‰oƶer Ximited half year report 2018
14. Reconciliation of loss for the half year to net cash flows from operating activities
FOR THE HALF YEAR ENDED
31 MARCH
2018
UNAUDITED
$000
31 MARCH
2017
UNAUDITED
$000
Loss for the half year(11,620)(8,182)
Adjusted for non-cash items
Depreciation of property, plant and equipment761 1,187
Amortisation of software2,579 3,120
Impairment of reinsurance receivables21,750 –
Unrealised loss (gain) on financial assets1,104 (2,029)
Gain on disposal of property, plant and equipment(19)(51)
Change in deferred tax(4,187)(4,592)
21,988 (2,365)
Adjusted for movements in working capital
(excluding the effects of exchange differences on consolidation)
Change in receivables6,370 (16,010)
Change in payables(16,310)3,529
Change in taxation(919)(603)
(10,859)(13,084)
Adjusted for other items classified as investing / financing activities
Financing expenses609 287
609 287
Net cash inflows (outflows) from operating activities118 (23,344)

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
29
15. Fair value of financial assets and liabilities
Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly
transaction between market participants at the measurement date. Refer below for details of valuation
methods and assumptions used by Tower for each category of financial assets and liabilities.
(i) Cash and cash equivalents
The carrying amount of cash and cash equivalents reasonably approximates its fair value.
(ii) Financial assets at fair value through profit or loss and held for trading
The fair value of financial instruments traded in active markets is based on quoted market prices at the
balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from
an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent
actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for
financial assets held by the Group is the current bid price. These instruments are included in Level 1.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of
observable market data where it is available and rely as little as possible on entity specific estimates. If all
significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. The
following fair value measurements are used:
•The fair value of fixed interest securities is based on the maturity profile and price/yield.
•The fair value of forward foreign exchange contracts is determined using forward exchange rates at the
balance sheet date, with the resulting value discounted back to present value.
•Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining
financial instruments.
If one or more of the significant inputs is not based on observable market data, the instrument is included
in Level 3. At 31 March 2018, the Level 3 category includes investment in equity securities of $560,000 (30
September 2017: $1,412,000). This investment is in unlisted shares of a company which provides reinsurance
to Tower. The fair value is calculated based on the net assets of the company from the most recently available
financial information, adjusted for market conditions.
(iii) Loans and receivables and other financial liabilities held at amortised cost
Carrying values of loans and receivables, adjusted for impairment values, and carrying values of other financial
liabilities held at amortised cost reasonably approximate their fair values.
(iv) Derivative financial liabilities and assets
The fair value of derivative financial liabilities and assets is determined by reference to market accepted
valuation techniques using observable market inputs. There have been no transfers between levels of the fair
value hierarchy during the current financial period (30 September 2017: nil).

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
30
‰oƶer Ximited half year report 2018
15. Fair value of financial assets and liabilities (continued)
The following tables present the Group’s assets and liabilities which were measured at fair value, categorised
by fair value measurement hierarchy levels.
TOTAL
$000
LEVEL 1
$000
LEVEL 2
$000
LEVEL 3
$000
As at 31 March 2018 (Unaudited)
Assets
Investment in equity securities560 – – 560
Investments in fixed Interest securities156,659 – 156,659 –
Investments in property securities34 – 34 –
Investments157,253 – 156,693 560
Derivative financial assets78 – 78 –
Total financial assets157,331 – 156,771 560
As at 30 September 2017 (Audited)
Assets
Investment in equity securities1,412 – – 1,412
Investments in fixed Interest securities166,256 – 166,256 –
Investments in property securities34 – 34 –
Investments167,702 – 166,290 1,412
Derivative financial assets 231 – 231 –
Total financial assets167,933 – 166,521 1,412
Liabilities
Borrowings29,921 – 29,921 –
Total financial liabilities29,921 – 29,921 –

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
31
15. Fair value of financial assets and liabilities (continued)
The following table represents the changes in Level 3 instruments:
INVESTMENT IN EQUITY SECURITIES
AS AT
31 MARCH
2018
UNAUDITED
$000
AS AT
30 SEPTEMBER
2017
AUDITED
$000
Opening balance1,412 1,406
Total gains and losses recognised in profit and loss(745)(3)
Foreign currency movement(85)9
Disposals(22) –
Closing balance560 1,412
The following table shows the impact of increasing or decreasing the combined inputs used to determine the
fair value of the level 3 investments by 10%:
CARRYING
AMOUNT
$000
FAVOURABLE
CHANGES OF 10%
$000
UNFAVOURABLE
CHANGES OF 10%
$000
As at 31 March 2018
Investment in equity securities (Unaudited)560 56 (56)
As at 30 September 2017
Investment in equity securities (Audited)1,412 141 (141)

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
32
‰oƶer Ximited half year report 2018
16. Solvency requirements
The minimum solvency capital required to be retained by Tower Insurance Limited Group to meet solvency
requirements under the Insurance (Prudential Supervision) Act 2010 is shown below. Actual solvency capital
exceeds the minimum solvency capital requirement for the Tower Insurance Limited Group by $81.8 million
(30 September 2017: $96.3 million) and $75.2 million for Tower Insurance Limited (30 September 2017: $87.9
million).
TOWER INSURANCE LIMITEDTOWER INSURANCE LIMITED GROUP
31 MARCH
2018
UNAUDITED
$000
30 SEPTEMBER
2017
UNAUDITED
$000
31 MARCH
2018
UNAUDITED
$000
30 SEPTEMBER
2017
AUDITED
$000
Actual solvency capital134,186 149,317 150,043 166,823
Minimum solvency capital58,971 61,387 68,212 70,545
Solvency margin75,215 87,930 81,831 96,278
Solvency ratio228%243%220%236%
On 22 August 2014 the Reserve Bank of New Zealand imposed a condition of licence requirement for
Tower Insurance Limited to maintain a minimum solvency margin of $50.0 million. This minimum solvency
requirement was confirmed on 15 September 2015 by the Reserve Bank of New Zealand.
The methodology and bases for determining the solvency margin are in accordance with the requirements of
the Solvency Standard for Non-life Insurance Business published by the Reserve Bank of New Zealand.
17. Contingent liabilities
The Group is occasionally subject to claims and disputes as a commercial outcome of conducting insurance
business. Provisions are recorded for these claims or disputes when it is probable that an outflow of resources
will be required to settle any obligations. Best estimates are included within claims reserves for any litigation
that has arisen in the usual course of business.
Under the Fairfax Financial Holdings Limited (Fairfax) mutual termination agreement, a break fee of $1.57
million is payable to Fairfax if another party completes an acquisition of Tower by 31 August 2018.
The Group has no other contingent liabilities.
18. Subsequent events
Weather events
Auckland and other areas of the North Island were impacted by large storms in April 2018. The initial estimate
of the ultimate incurred losses from these storms, including a risk margin, is $9.0 million. At this level, Tower’s
non-catastrophe aggregate loss reinsurance program would cover approximately $5.2m of these losses, with
a net impact to Tower’s profit before tax of $3.8 million. Taken in combination with storm events earlier in the
year, Tower’s non-catastrophe aggregate loss reinsurance program is now fully utilised. Changes to these
estimates, or any further such events, would have a direct impact on Tower’s profit.
There were no other subsequent events after balance date.

33

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
34
‰oƶer Ximited half year report 2018
Tower LimitedTower Limited
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent review report
to the shareholders of Tower Limited
Report on the interim financial statements
We have reviewed the accompanying interim financial statements of Tower Limited (the “Group”) on
pages 12 to 32 which comprise the consolidated balance sheet as at 31 March 2018, and the
consolidated income statement, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
period ended on that date, and selected explanatory notes.
Directors’ responsibility for the interim financial statements
The Directors are responsible on behalf of the Group for the preparation and presentation of these
interim financial statements in accordance with International Accounting Standard 34 Interim
Financial Reporting (IAS 34) and New Zealand Equivalent to International Accounting Standard 34
Interim Financial Reporting (NZ IAS 34) and for such internal controls as the Directors determine are
necessary to enable the preparation of interim financial statements that are free from material
misstatement, whether due to fraud or error.
Our responsibility
Our responsibility is to express a conclusion on the accompanying interim financial statements based
on our review. We conducted our review in accordance with the New Zealand Standard on Review
Engagements 2410 Review of Financial Statements Performed by the Independent Auditor of the
Entity (NZ SRE 2410). NZ SRE 2410 requires us to conclude whether anything has come to our
attention that causes us to believe that the interim financial statements, taken as a whole, are not
prepared in all material respects, in accordance with IAS 34 and NZ IAS 34. As the auditors of the
Company, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of
the annual financial statements.
A review of interim financial statements in accordance with NZ SRE 2410 is a limited assurance
engagement. The auditor performs procedures, primarily consisting of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying analytical and other review
procedures. The procedures performed in a review are substantially less than those performed in an
audit conducted in accordance with International Standards on Auditing (New Zealand) and
International Standards on Auditing. Accordingly, we do not express an audit opinion on these interim
financial statements.
We are independent of the Group. Our firm carries out other services for the Group in the areas of
solvency return assurance and agreed upon procedures. In addition, certain partners and employees of
our firm may deal with the Group on normal terms within the ordinary course of trading activities of
the Group. These matters have not impaired our independence. We have no other interests in the
Group.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that these interim
financial statements of the Group are not prepared, in all material respects, in accordance with IAS 34
and NZ IAS 34.

Notes to the Interim Financial Statements
For the half year ended 31 March 2018
Tower Limited
35
Tower Limited



Who we report to
This report is made solely to Tower Limited’s shareholders, as a body. Our review work has been
undertaken so that we might state to the Tower Limited’s shareholders those matters, which we are
required to state to them in our review report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the shareholders, as a body, for
our review procedures, for this report, or for the conclusion we have formed.

For and on behalf of:



Chartered Accountants Auckland
29 May 2018

36
‰oƶer Ximited half year report 2018
Board of Directors
Michael Stiassny (Chairman)
Warren Lee
Steve Smith
Graham Stuart
Wendy Thorpe
Chief Executive Officer
Richard Harding
Company Secretary
David Callanan
Executive leadership team
Richard Harding
Tony Antonucci
David Callanan
Michelle James
Chris Sutherland
Glenys Talivai
Glenn Vade
Jeff Wright
Registered Office
New Zealand
Level 14
Tower Centre
45 Queen Street
PO Box 90347
Auckland
Telephone: +64 9 369 2000
Facsimile: +64 9 369 2245
Australia
C/- PricewaterhouseCoopers
Nominees (N.S.W) Pty Ltd
PricewaterhouseCoopers
One International Towers Sydney
Watermans Quay
Barangaroo
Sydney NSW 2000
Australia
Tower Directory
Auditor
PricewaterhouseCoopers
Banker
Westpac New Zealand Limited
Enquiries
For customer enquiries, call Tower on
0800 808 808 or visit tower.co.nz
For investor enquiries:
Telephone: +64 9 369 2000
Email: investor.relations@tower.co.nz
Website: tower.co.nz
Company numbers
Tower Limited (Incorporated
in New Zealand)
NZ Incorporation 979635
NZBN 9429 0374 84576
ARBN 088 481 234
Stock exchanges
The Company’s ordinary shares are
listed on the NZSX and the ASX. On
Wednesday 18 May 2016, Tower’s
ASX admission category changed to
“ASX Foreign Exempt Listing”.
Registrar
New Zealand
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road,
Takapuna, Auckland
Private Bag 92119
Auckland 1142
Freephone within New Zealand: 0800 222 065
Telephone New Zealand: +64 9 488 8777
Facsimile New Zealand: +64 9 488 8787
Australia
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street
Abbotsford VIC 3067
GPO Box 3329
Melbourne Vic 3000
Freephone within Australia: 1800 501 366
Telephone Australia: +61 3 9415 4083
Facsimile Australia: +61 3 9473 2500
Email: enquiry@computershare.co.nz
Website: investorcentre.com/nz
You can also manage your holdings
electronically by using Computershare’s
secure website investorcentre.com/nz
This website enables holders to view
balances, change addresses, view payment
and tax information and update payment
instructions and report options.
Tower recommends shareholders elect to
have any payments direct credited to their
nominated bank account in New Zealand or
Australia to minimise the risk of fraud and
misplacement of cheques.
Please quote your CSN number or
shareholder number when contacting
Computershare.

Tower Limited Investor Relations
Telephone: +64 9 369 2000
Email: investor.relations@tower.co.nz
Website: tower.co.nz
Registrar
Computershare Investor Services Limited
Freephone within New Zealand: 0800 222 065
Telephone New Zealand: +64 9 488 8777
Freephone within Australia: 1800 501 366
Telephone Australia: +61 3 9415 4083
Email: enquiry@computershare.co.nz
Website: investorcentre.com/nz