Tower Limited HY 2020 Results for Announcement to Market

Results for announcement to the market
Name of issuer Tower Limited
Reporting Period 6 months to 31 March 2020
Previous Reporting Period 6 months to 31 March 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$199,766 11%
Total Revenue $199,766 11%
Net profit/(loss) from
continuing operations
$14,410 24%
Total net profit/(loss) $14,410 24%
Interim/Final Dividend
Amount per Quoted Equity
Security
No dividend has been proposed
Imputed amount per Quoted
Equity Security
N/A
Record Date N/A
Dividend Payment Date N/A
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.56 $0.57
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the attached investor presentation and media
release for commentary on the results.
Authority for this announcement
Name of person

authorised
to make this announcement
Hannah Snelling, Company Secretary
Contact person for this
announcement
Nicolas Meseldzija, Head of Corporate Affairs and Reputation
Contact phone number +64 21 531 869
Contact email address nicholas.meseldzija@tower.co.nz
Date of release through MAP

29 March 2020

Unaudited financial statements accompany this announcement.

1
Consolidated interim financial statements
Financial Statements
Consolidated statement of comprehensive income2
Consolidated balance sheet3
Consolidated statement of changes in equity4
Consolidated statement of cash flows5
Notes to the interim financial statements
Part A Overview
A1About this report6
A2Critical accounting judgements and estimates6
A3Segmental reporting7
Part B Underwriting activities
B1Net claims expense8
B2Outstanding claims8
B3Receivables8
Part C Investments
C1Investment income11
C2Investment assets11
Part D Other balance sheet items
D1 Intangible assets12
Part E Capital structure
E1Borrowings13
E2Contributed equity13
E3Solvency requirements14
E4Earnings per share14
Part F Other disclosures
F1Contingent liabilities15
F2Subsequent events15
F3Notes to the consolidated cash flow statement16
F4Change in comparatives16
F5Impact of adoption of NZ IFRS16 Leases17
Glossary of terms
Corporate entities means the non-insurance related entities registered in New Zealand
EQC means the Earthquake Commission
Group or Tower means Tower Limited and all its subsidiaries
RBNZ means Reserve Bank of New Zealand
Tower Limited or Company means the ultimate parent in the Group
Tower Insurance Limited means the New Zealand insurance business including all its branches
Tower Insurance Limited Group means the New Zealand and Pacific Islands insurance businesses and all its
subsidiaries

2March balances unaudited, September audited
Tower Limited
Consolidated statement of comprehensive income
For the half year end 31 March 2020
$ thousandsNote31-Mar-2031-Mar-19
Gross written premium
183,627 169,665
Unearned premium movement
3,708 (936)
Gross earned premium
187,335 168,729
Outward reinsurance premium
(28,271) (26,243)
Movement in deferred reinsurance premium
342 (237)
Outward reinsurance premium expense
(27,929) (26,480)
Net earned premium159,406 142,249
Claims expense(94,509) (86,651)
Less: Reinsurance and other recoveries revenue6,582 4,032
Net claims expenseB1(87,927) (82,619)
Gross commission expense(10,402) (9,971)
Commission revenue3,504 1,766
Net commission expense(6,898) (8,205)
Underwriting expenses(42,378) (36,261)
Underwriting profit22,203 15,164
Investment incomeC12,242 3,726
Investment expenses (243)(212)
Corporate and other income103 1,013
Corporate and other expenses(1,646) (1,837)
Financing and other costs(591)(209)
Profit before taxation22,068 17,645
Tax expense(7,207) (5,736)
Profit after taxation14,861 11,909
Items that may be reclassified to profit or loss
Currency translation differences1,396 (1,001)
Total comprehensive profit for the half year16,257 10,908
Earnings per share:
Basic and diluted profit per share (cents)
3.5 3.3
Profit after taxation attributed to:
Shareholders
14,410 11,594
Non-controlling interests
451 315
14,861 11,909
Total comprehensive profit attributed to:
Shareholders
15,807 10,626
Non-controlling interests
450 282
16,257 10,908
The above statement should be read in conjunction with the accompanying notes.

4March balances unaudited, September audited
Tower Limited
Consolidated statement of changes in equity
As at 31 March 2020
$ thousands
Contributed
equity
Accumulated
losses
Reserves
Non-controlling
interest
Total Equity
Half year ended 31 March 2020
Balance as at 30 September 2019 447,543 (41,504) (115,182) 1,801 292,658
Adjustment on initial application of NZIFRS16* - (1,332) - (4) (1,336)
Restated balance 447,543 (42,836) (115,182) 1,797 291,322
Comprehensive income
Profit for the half year - 14,410 - 451 14,861
Currency translation differences - - 1,399 (3) 1,396
Total comprehensive income - 14,410 1,399 448 16,257
Transactions with shareholders
Net proceeds of capital raise45,001 - - - 45,001
Total transactions with shareholders45,001 - - - 45,001
At the end of the half year492,544 (28,426) (113,783) 2,245 352,580
Half year ended 31 March 2019
At the beginning of the half year
447,543 (58,077) (116,155) 1,468 274,779
Comprehensive income
Profit for the half year
- 11,594 - 315 11,909
Currency translation differences
- - (968) (33) (1,001)
Total comprehensive income
- 11,594 (968) 282 10,908
Transactions with shareholders
Other
- (6) - - (6)
Total transactions with shareholders - (6) - - (6)
At the end of the half year
447,543 (46,489) (117,123) 1,750 285,681
The above statement should be read in conjunction with the accompanying notes.
* Refer to Note F5 for further information.
Attributed to Shareholders

5March balances unaudited, September audited
Tower Limited
Consolidated statement of cash flows
For the half year ended 31 March 2020
$ thousandsNote31-Mar-2031-Mar-19
Cash flows from operating activities
Premiums received 188,372 169,819
Interest received 4,015 3,981
Fee and other income received3,578 1,889
Reinsurance and other recoveries received5,982 15,391
Reinsurance paid(29,090) (29,890)
Claims paid(112,473) (98,985)
Employee and supplier payments(55,534) (47,899)
Income tax paid(816)(744)
Net cash inflow from operating activities F34,034 13,561
Cash flows from investing activities
Proceeds from sale of interest bearing investments27,032 14,929
Payments for purchase of interest bearing investments(24,208) (42,527)
Payments for purchase of intangible assets (4,660) (19,657)
Payments for purchase of customer relationships*(9,473) -
Payments for purchase of property, plant & equipment(1,799)(641)
Net cash outflow from investing activities (13,108)(47,897)
Cash flows from financing activities
Proceeds from share capital issuanceE247,299 -
Payments for cost of share capital issuanceE2(2,298) -
Facility fees and interest paid(581)(209)
Payment relating to principal element of lease liabilities(1,424) -
Net cash inflow (outflow) from financing activities 42,996 (209)
Net increase (decrease) in cash and cash equivalents33,922 (34,544)
Effect of foreign exchange rate changes487 (488)
Cash and cash equivalents at the beginning of the half year 67,018 102,001
Cash and cash equivalents at the end of the half year 101,427 66,969
The above statement should be read in conjunction with the accompanying notes.
* This represents the net cashflow associated with the purchase of the Youi NZ Pty Ltd.'s insurance portfolio. It
constitutes the gross purchase price (and associated costs) as disclosed in note D1 less the net insurance
liabilities Tower absorbed as part of this transaction.

6March balances unaudited, September audited
Tower Limited
Notes to the interim financial statements
A1 About this Report
Entities reporting
Statutory base
Basis of preparation
Accounting policies
A2 Critical accounting judgments and estimates
Canterbury earthquake claims liability Note B3, Annual Report (30 September 2019)
ReceivablesNote B3 in this interim report
Deferred taxationNote D5, Annual Report (30 September 2019)
Intangible assets and goodwillNote E2, Annual Report (30 September 2019)
The impact of the Covid-19 pandemic remains uncertain and represents a material downside risk to the economy.
The Group has incorporated estimates, assumptions and judgements related to Covid-19 in its critical accounting
judgments and estimates. The overall impact of the adjustments related to Covid-19 have had an immaterial
impact on these financial statements.
Part A - Overview
In preparing these interim financial statements management is required to make estimates and related
assumptions about the future. The estimates and related assumptions are based on experience and other factors
that are considered to be reasonable, and are reviewed on an ongoing basis. Revisions to the estimates are
recognised in the period in which they are revised, or future periods if relevant. The key areas in which estimates
and related assumptions are applied are as follows:
The interim financial statements for the six months ended 31 March 2020 are unaudited.
Refer to Note F5 for the impact of amendments to accounting standards. Other than this, 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 2019.
This section provides information that is helpful to an overall understanding of the interim financial statements
and the areas of critical accounting judgements and estimates included in the interim financial statements. It also
includes a summary of Tower's operating segments.
The interim financial statements presented are those of the Group. The address of the Group's registered office is
45 Queen Street, Auckland, New Zealand.
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.
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 should be read in conjunction with the annual financial statements for the year
ended 30 September 2019, which have been prepared in accordance with International Financial Reporting
Standards and New Zealand Equivalents to International Financial Reporting Standards.

7March balances unaudited, September audited
Tower Limited
A3
Segmental reporting
Operating segments
Financial performance
$ thousands
New Zealand
General Insurance
Pacific Islands
General Insurance
New Zealand
Corporate
Total
Half year ended 31 March 2020
Gross written premium153,590 30,037 - 183,627
Gross earned premium - external156,094 31,241 - 187,335
Outwards reinsurance expense(18,925) (9,004) - (27,929)
Net earned premium137,169 22,237 - 159,406
Net claims expense(81,011) (6,916) - (87,927)
Net commission expense(5,538) (1,360) - (6,898)
Underwriting expense(35,630) (6,748) - (42,378)
Underwriting profit14,990 7,213 - 22,203
Net investment income1,355 515 129 1,999
Other(152)23 (2,005) (2,134)
Profit before tax16,193 7,751 (1,876) 22,068
Profit after tax11,082 5,131 (1,352) 14,861
Half year ended 31 March 2019
Gross written premium141,569 28,096 - 169,665
Gross earned premium - external139,634 29,095 - 168,729
Outwards reinsurance expense(18,057) (8,423) - (26,480)
Net earned premium121,577 20,672 - 142,249
Net claims expense(75,861) (6,758) - (82,619)
Net commission expense(6,757) (1,448) - (8,205)
Underwriting expense(29,606) (6,655) - (36,261)
Underwriting profit9,353 5,811 - 15,164
Net investment income3,428 (108)194 3,514
Other - 89 (1,122) (1,033)
Profit before tax12,781 5,792 (928) 17,645
Profit after tax8,597 3,710 (398) 11,909
Financial position
Total assets 31 March 2020528,215 112,075 122,136 762,426
Total assets 30 September 2019480,694 98,455 124,284 703,433
Total liabilities 31 March 2020327,434 66,086 16,326 409,846
Total liabilities 30 September 2019334,809 58,842 17,124 410,775
Tower operates in two geographical segments, New Zealand and the Pacific region. New Zealand comprises the
general insurance business underwritten in New Zealand. Pacific Islands comprises the general insurance business
underwritten in the Pacific by Tower subsidiaries and branch operations. New Zealand Corporate includes head
office expenses, financing costs, intercompany eliminations and recharges.
The Group does not derive revenue from any individual or entity that represents 10% or more of the Group's total
revenue.

8March balances unaudited, September audited
Tower Limited
B1
Net claims expense
31-Mar-2031-Mar-19
Net claims expense (excluding Canterbury earthquake)86,351 76,119
Canterbury earthquake1,576 6,500
Net claims expense87,927 82,619
B2
Outstanding claims
$ thousands31-Mar-2030-Sep-19
Outstanding claims (excluding Canterbury earthquake)68,172 72,460
Canterbury earthquake 34,800 46,600
Additional risk margin5,000 5,000
Outstanding claims107,972 124,060
B3
Receivables
Composition
$ thousands31-Mar-2030-Sep-19
Premium receivables158,884 153,883
Reinsurance and other recoveries22,084 19,316
Unearned reinsurance premiums9,330 8,794
Trade receivables190,298 181,993
EQC receivable69,000 70,263
Prepayments2,976 2,572
Other2,830 1,467
Receivables265,104256,295
EQC receivable now relates solely to the Canterbury earthquake provision (2019: $69.9m Canterbury earthquake
and $0.4m Kaikoura earthquake). Tower no longer has a receivable related to the Kaikoura earthquake.
Part B - Underwriting activities
This section provides information on Tower's underwriting activities.
Tower collects premiums from customers in exchange for providing insurance coverage. These premiums are
recognised as revenue when they are earned by Tower, with a liability for unearned premiums recognised on the
balance sheet.
When customers suffer a loss that is covered by their policy, Tower will make payments to customers or suppliers,
which it recognises as claims expenses. To ensure that Tower’s obligations to customers are properly recorded
within the financial statements, Tower recognises provisions for outstanding claims.
To manage Tower’s risk and optimise its returns, Tower reinsures some of its exposure with reinsurance
companies. The premiums paid to reinsurers are recognised as an expense, while recoveries from reinsurers are
recognised as revenue.
Premium receivables represent net amounts owed to Tower (including GST) by policyholders. The majority of the
amounts outstanding are not due. Reinsurance and other recoveries include $3.7m (2019: $4.8m) related to the
Canterbury earthquake outstanding reinsurance recoveries.
$ thousands

9March balances unaudited, September audited
Tower Limited
B3
Receivables (continued)
EQC recovery receivable
Tower’s estimate of the gross amount receivable from EQC is, based on independent expert review, higher than the
reported $69.0m (30 September 2019: $69.9m). The Appointed Actuary has reviewed the independent experts’
allocations for reasonableness, and then applied actuarial approaches that recognise the inherent risk and
uncertainty in the recovery of the gross amount receivable to determine a central estimate. To the central estimate
of $78.5m (30 September 2019: $78.5m), a weighted allowance for future legal costs and past and future legal cost
recoveries is made. The components of this are (i) the deduction of a weighted estimate of future legal costs of
$4.6m (30 September 2019: $3.2m), and (ii) the addition of a weighted estimate of recoverable past and future
legal costs of $4.5m (30 September 2019: $4.1m). The Appointed Actuary then applied a risk margin of $9.2m to
arrive at a 75th percentile probability of recovery (30 September 2019: $9.4m).
The resultant valuation is that which is carried in the financial statements, and includes an allowance for
anticipated future legal costs. The valuation does not include any allowance for interest and certain other costs
that the EQC may be required to pay Tower, which would be additional to the final principal amount for which EQC
may be liable.
$15.0m of the receivable from EQC, being $16.6m less an allocation of legal costs of $1.6m, is payable to reinsurers
if the full amount is recovered. This has been allowed for in payables (30 September 2019: $16.9m).
Tower acknowledges that the EQC receivable is an area of significant accounting estimation and judgement. The
amount received could be more or less, depending on the allocation of liability for damage between the four
events and between EQC and Tower, the quality of assessment information available in respect of each property,
the time taken to settle with EQC, and the risks involved in litigation.
Tower issued litigation proceedings against the EQC in relation to building recoveries in March 2020 due to delays
in settling through the alternate dispute resolution process. Tower remains in litigation for land recoveries.
Included in "reinsurance and other recoveries" are amounts owed to Tower by third parties. Tower has increased
its provision for expected credit losses to reflect the higher likelihood of credit defaults due to the impact of
worsening economic conditions following the Covid-19 outbreak.
Tower has recognised a receivable of $69.0m from the EQC (30 September 2019: $69.9 million) related to the
Canterbury earthquake claims. The amount of this receivable is disputed, largely due to differences between the
Tower and EQC approaches to allocation of damage to properties across the four Canterbury events.
Tower assesses claims and apportions damage between Canterbury earthquake events on an individual property
basis. The allocation process uses a hierarchical approach based on the relative quality and number of claim
assessments completed after each of the four main earthquakes. Results from the hierarchical approach are used
as an input to the actuarial valuations which estimate the ultimate claims costs.
For each claim to which additional EQC recoveries relate, Tower has allocated recoverable amounts according to
the quality of information and evidence available. Claims with primary evidence (e.g. independent expert
documentation) have been assessed as having a strong position for recovery. Claims with non-primary evidence
(e.g. general documentation like post code analysis or adjacent locations) will have a lower likelihood of recovery.
Tower’s approach to allocation is based on extensive advice from independent experts (both external legal advisers
and technical experts) including the modelling of damage for properties where primary evidence is very limited or
not held. Tower’s position is that: (a) there is a portfolio of approximately 3,000 properties in respect of which
Tower made payments and where a reallocation is required, and (b) within that portfolio, there are a significant
number of properties where part of Tower’s contribution ought to have been made by EQC instead.

10March balances unaudited, September audited
Tower Limited
B3
Receivables (continued)
EQC recovery receivable
$ thousands31-Mar-2030-Sep-19
EQC related to closed claims76,900 77,300
EQC related to open claims1,300 2,000
Risk margin on EQC receivable(9,200) (9,400)
Receivable from EQC69,000 69,900
EQC payable to reinsurers on closed claims(17,000) (18,700)
EQC payable to reinsurers on open claims(300)(500)
Risk margin on EQC payable to reinsurers2,300 2,300
EQC payable to reinsurers(15,000)(16,900)
Receivable from EQC net of reinsurance54,000 53,000

11March balances unaudited, September audited
Tower Limited
C1
Investment income
$ thousands31-Mar-2031-Mar-19
Interest income4,016 3,981
Net realised (loss) gain(514)97
Net unrealised loss(1,260)(352)
Investment income2,242 3,726
C2
Investments
Composition
$ thousands31-Mar-2030-Sep-19
Fixed interest investments223,899 228,527
Equity investments642 611
Property investment34 34
Investments224,575 229,172
Fair value hierarchy
$ thousandsLevel 1Level 2Level 3Total
As at 31 March 2020
Fixed interest investments - 223,899 - 223,899
Equity investments - - 642 642
Property investment - - 34 34
Investments - 223,899 676 224,575
As at 30 September 2019
Fixed interest investments
- 228,527 - 228,527
Equity investments
- - 611 611
Property investment
- 34 - 34
Investments - 228,561 611 229,172
Tower's fixed interest investments were impacted by volatility in global fixed interest markets that began late
February 2020 and peaked at the end of March 2020 before retracting to a degree in early April. However this had
an immaterial impact given the conservative nature of the investment portfolio.
The property investment of $34,000 has been moved from level 2 to level 3 (30 September 2019: nil).
Tower invests funds collected as premiums and provided by shareholders to ensure it can meet its obligations to
pay claims and expenses and to generate a return to support its profitability. Tower has a low risk tolerance and
therefore the majority of its investments are in investment grade supranational and bank bonds.
Part C - Investments
Tower designates its investments at fair value through the income statement in accordance with its Treasury
policy. Consistent with 30 September 2019, Tower continues to hold level 2 and level 3 investments.

12March balances unaudited, September audited
Tower Limited
D1
Intangible assets
31 March 2020
$ thousands
GoodwillAcquired
Internally
developed
Under
development
Customer
Relationships
Total
Composition:
Cost17,744 39,299 51,945 4,354 13,974 127,315
Accumulated amortisation - (7,958) (30,887) - (650) (39,495)
Total Intangible Assets17,744 31,341 21,057 4,354 13,324 87,820
Reconciliation:
Opening balance17,744 29,582 19,798 7,087 - 74,211
Amortisation - (2,092) (2,239) - (650) (4,981)
Additions - - 18 4,598 13,974 18,590
Disposals - - - - - -
Transfers - 3,851 3,480 (7,331) - -
Closing Balance17,744 31,341 21,057 4,354 13,324 87,820
30 September 2019
Composition:
Cost17,744 35,448 48,446 7,087 - 108,725
Accumulated amortisation - (5,866) (28,648) - - (34,514)
Total Intangible Assets17,744 29,582 19,798 7,087- 74,211
Reconciliation:
Opening balance17,744 684 4,112 22,502 - 45,042
Amortisation - (1,168) 4,885 - - 3,717
Additions - - - 36,343 - 36,343
Disposals - (223) (10,021) - - (10,244)
Transfers - 30,289 20,822 (51,758) - (647)
Closing Balance17,744 29,582 19,798 7,087- 74,211
Customer Relationships
Part D - Other balance sheet items
Tower Insurance Limited purchased Youi NZ Pty Ltd.'s insurance portfolio in December 2019. Tower Insurance
Limited purchased the customer relationships (and associated assets and liabilities) and not the systems or
processes that Youi NZ used to run its business. Therefore, the transaction has been treated as a purchase of an
intangible asset rather than a business combination. The amount capitalised includes the price paid for the
portfolio and associated acquisition costs.
Software
This section provides information about assets and liabilities not included elsewhere.

13March balances unaudited, September audited
Tower Limited
E1
Borrowings
$ thousands
Interest Rate
Rollover Date
(Drawn) /
Maturity Date
(Undrawn)
Face Value
Unamortised
Costs
Carrying
Value
Fair Value
For the Half Year Ended 31 March 2020
Bank facilities (drawn)3.25% 14-Apr-20 5,000 - 5,000 5,001
Bank facilities (drawn)2.49% 30-Jun-20 5,000 - 5,000 5,000
Bank facilities (drawn)2.64% 16-Jun-20 5,000 - 5,000 5,002
Bank facilities (undrawn)Variable 27-Mar-23 15,000 (60) (60) -
Total borrowings(60) 14,940 15,003
For the Year Ended 30 September 2019
Bank facilities (drawn)3.60% 11-Oct-19 5,000 - 5,000 5,001
Bank facilities (drawn)3.14% 16-Dec-19 5,000 - 5,000 5,000
Bank facilities (drawn)3.15% 31-Dec-19 5,000 - 5,000 5,000
Bank facilities (undrawn)Variable 27-Mar-23 15,000 (69) (69) -
Total borrowings(69) 14,931 15,001
E2
Contributed equity
$ thousands
Opening balance
Issue of share capital
Costs of capital raise
Total contributed equity
Represented by:
Opening balance
Issued shares
Total shares on issue
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.
On 24 September 2019 the Company invited its eligible shareholders to subscribe to a rights issue of 1 new share
for every 4 existing shares held at the record date on 2 October 2019 at a price of NZD0.56 (or AUD0.54) for each
new share. The issue was fully subscribed on 23 October 2019.
Part E - Capital structure
This section provides information about how Tower finances its operations through a mix of equity and debt
instruments. Tower's capital position provides financial security to its customers, employees and other
stakeholders whilst operating within the capital requirements set by regulators.
447,543
-
337,324,300
492,544
337,324,300
84,322,958
421,647,258
447,543
-
-
337,324,300
30-Sep-1931-Mar-20
447,543
Borrowings are classified as a current liability.
47,299
(2,298)

14March balances unaudited, September audited
Tower Limited
E3
Solvency requirements
Tower Insurance Limited Group
UnauditedUnauditedUnauditedAudited
$ thousands31-Mar-2030-Sep-1931-Mar-2030-Sep-19
Actual solvency capital148,168 155,894 178,873 182,197
Minimum solvency capital52,913 56,598 71,111 73,276
Solvency margin95,255 99,296 107,762 108,921
Solvency ratio280%275%252%249%
E4
Earnings per share
31-Mar-2031-Mar-19
Profit attributable to shareholders ($ thousands)14,410 11,594
412,698,050 350,442,688
Basic and diluted earnings per share (cents)3.5 3.3
For the year ending 30 September 2019, the Reserve Bank of New Zealand had imposed a license condition that
Tower Insurance Limited was required to maintain a minimum solvency margin of at least $50.0m. Effective from 31
October 2019, the license condition was amended so that Tower Insurance Limited is required to maintain a
minimum solvency margin of at least $50.0m in respect of all assets and liabilities except for Specified Excluded
Assets. Specified Excluded Assets are the assets net of reinsurance in respect of the disputed EQC recoveries,
referred to in note B3.
Tower Insurance Limited
Weightedaveragenumberofordinarysharesforbasicanddilutedearningsper
share (number of shares)
Tower issued an additional 84,322,958 shares as per its 1 for 4 rights offer (refer to Note E2). The shares were issued
at NZ$0.56 which represented a 19% discount to the share price of NZ$0.69 as at 15 October 2019 (the date
immediately prior to the exercise of rights). As a result, 13,118,388 shares issued as part of the rights offer are
treated as a bonus issue. The weighted average number of ordinary shares on issue in both 2020 and 2019 have
been adjusted in accordance with NZ IAS 33 Earnings per share.
Subsidiaries of Tower Insurance Limited operating in the Pacific Islands may also have their own minimum solvency
requirements as imposed by local regulators. The Tower Insurance Limited Group is complying with all local
regulatory requirements.

15March balances unaudited, September audited
Tower Limited
F1
Contingent liabilities
F2
Subsequent events
Corporate structure
To make this happen, Tower Limited, Tower Financial Services Group Limited and Tower New Zealand Limited
propose to undertake a short-form amalgamation under section 222(2) of the Companies Act 1993 down into
Tower Insurance Limited. Tower Insurance Limited will become the amalgamated and continuing company, and will
change its name to Tower Limited.
Tower Insurance Limited does not anticipate any material adverse change to its financial condition or solvency
position.
The Group has no other contingent liabilities.
This section includes additional disclosures which are required by financial reporting standards.
Part F - Additional disclosures
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.
Tropical Cyclone Harold
Tower has received lower motor vehicle claims in New Zealand due to travel restrictions imposed during the time
spent in New Zealand government’s Covid-19 alert level 3 and 4. On 21st April 2020 Tower Insurance Limited
committed to returning the benefit of lower New Zealand motor claims to customers through motor vehicle
premium refunds. As claims are still being notified, the preliminary estimate of premiums to be refunded to motor
customers is approximately $6.8m. This refund would be overall neutral to Tower’s financial results.
Tower announced in late May 2020 that it intends to simplify its corporate structure to make Tower Insurance
Limited the listed parent company of the Tower Group, subject to regulatory approval.
Tropical Cyclone Harold caused widespread damage in the Pacific Islands in April 2020. While Vanuatu & Tonga
were mostly impacted, Tower also received claims in Solomon Islands and Fiji. The estimate of the total financial
impact of Cyclone Harold is approximately $8.0m before tax.
Combined with the Timaru hailstorm earlier in the year, Tower’s aggregate reinsurance cover has now been
activated. This provides immediate cover for any future large weather events in New Zealand and the Pacific in
excess of $1.0m up to $7.5 million per event, to a total of $20.0m for the remainder of FY20.
Commitment to refund Covid-19 New Zealand motor claims savings
The Covid-19 outbreak was declared a pandemic by the World Health Organisation on 30 January 2020. Measures
to prevent the virus spreading in New Zealand were gradually introduced until 25 March 2020, when New Zealand
moved into Level 4 of the New Zealand government’s Covid-19 response alert system. This measure required all
non-essential businesses to close and people to stay home except for essential activities. The alert level was
reduced to level 3 on the 25th April 2020, which allowed some wider activities to occur. Level 3 ended on the 13th
May 2020.

16March balances unaudited, September audited
Tower Limited
F3
$ thousands31-Mar-2031-Mar-19
92,011 59,673
Held for operating purposes in Corporate entities9,416 7,296
Cash and cash equivalents101,427 66,969
Reconciliation of profit to cash flow from operating activities
Profit for the half year13,762 11,909
Adjusted for non-cash items
Depreciation of property, plant and equipment1,004 694
Amortisation of right of use assets1,351 -
Amortisation of intangible assets4,869 2,813
Fair value losses on financial assets1,773 254
Change in deferred tax4,867 4,410
Change in receivables616 12,852
Change in payables(25,561) (20,161)
Change in taxation772 581
Facility fees and interest paid581 209
4,034 13,561
F4
Change in comparatives
Statement of comprehensive income - presentation changes
Statement of cash flows - presentation changes
A number of changes have been made to the presentation of the Statement of cash flows. First, cash flows related
to the sale and purchase of interest bearing investments are now shown on a gross basis (previously it was
disclosed on a net basis). Second, cash flows from the purchase of intangible assets and property, plant and
equipment are shown separately (previously combined). Third, cash received from non-reinsurance recoveries have
been included with reinsurance recoveries received as opposed to being netted off in claims paid - as a result,
claims paid and reinsurance and other recoveries have both increased by $0.6m in 2019. Finally, net realised
investment gains was moved from operating activities cash flows (reducing by $0.1m in 2019) to investment cash
flows (increasing by $0.1m in 2019).
Notes to the Consolidated Cash Flow Statement
Composition of Cash and Cash Equivalents
Adjusted for movements in working capital
Adjusted for financing activities
Net cash inflows from operating activities
The Income statement and Statement of comprehensive income have been merged into a combined Statement of
comprehensive income to simplify financial performance presentation. In addition, the Statement of
comprehensive income has been redesigned to disclose the underwriting result for the reporting period.
Previously, a separate note had been used. There was no impact to HY19 profit as a result of these changes.
Held for operating purposes in entities undertaking general insurance activties

17March balances unaudited, September audited
Tower Limited
F5
Impact of adoption of NZ IFRS 16 Leases
Context
Accounting policy change
$ thousands
Right-of-use assets
Lease liabilities
Deferred tax asset
Retained earnings
$ thousands
Operating lease commitment - 30 September 2019
Impact of reassessment of lease terms under IFRS16
Impact of discounting future lease payments at the weighted average incremental
borrowing rate
Other (including short-term leases not recognised as a lease liability)
Lease liability recognised on transition date - 1 October 2019
3,445
(1,009)
(104)
12,134
The table below presents a reconciliation of the operating lease commitments as disclosed in the Group's 30
September 2019 financial statements, to the lease liability recognised on transition date:
Tower's weighted average incremental borrowing rate at the transition date was 3.60%
9,802
(12,134)
10,337
NZ IFRS 16 requires lessees to recognise a right-of-use asset and a corresponding lease liability reflecting future
lease payments for most lease contracts. The standard allows exemptions for short-term leases (less than 12
months) and for leases on low value assets. The main impact of the new standard was on leases which were
previously classified as operating leases, being predominantly office building and motor vehicle related leases.
AsaresultoftheadoptionofNZ IFRS16,Towerhasrecogniseddepreciation expenseon right-of-useassets, ona
straight line basis over the lease term, and interest expense on lease liabilities.
Tower applied the standard using the modified retrospective approach. The cumulative effect of adopting NZ
IFRS16wasrecognisedasan adjustmenttotheopeningbalanceof retainedearningsonOctober 12019,withno
restatement of comparative information.
The modified retrospective approach allows entitiesto use a number of practical expedients on adoption of the
new standard, of which Tower elected to use the following:
* for some leases which meet the definition of a short-term lease, not to apply NZIFRS16;
* used hindsight in determining the lease term where the contract contains options to extend or terminate a lease;
and
TheimpactoftheadoptionofNZIFRS16Tower’sbalancesheetasat1October2019isshowninthetablebelow.
There was also an immaterial impact on the pattern of expense recognition.
Impact of adoption
462
The Group adopted NZ IFRS 16Leasesduring the period. NZ IFRS 16 sets out the principles for the recognition,
measurement,presentationanddisclosureofleases.ThestandardreplacedtheguidanceinNZIAS17Leases,and
was effective from 1 October 2019 for Tower.
(1,336)
* applied a single discount rate to the portfolio of leases with reasonably similar characteristics;
* relied on an assessment of whether leases are onerous under IAS 37 Provisions, Contingent Liabilities and
Contingent Assets immediately before the date of initial application.

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 consolidated interim financial statements
We have reviewed the accompanying consolidated interim financial statements of Tower Limited (the
“Group”) on pages 2 to 17 which comprise the consolidated balance sheet as at 31 March 2020, and the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the half year ended on that date, and selected explanatory
notes.
Directors’ responsibility for the consolidated interim financial statements
The Directors are responsible on behalf of the Group for the preparation and fair presentation of these
consolidated 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 control as the Directors
determine is necessary to enable the preparation of consolidated 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 consolidated 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 consolidated 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 Group, NZ SRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial statements.
A review of consolidated 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 consolidated interim
financial statements.
We are independent of the Group. Our firm carries out other services for the Group. These services are
assurance services in respect of solvency and regulatory insurance returns and agreed upon procedures
in respect of voting at the Annual Shareholders Meeting and a regulatory insurance return. 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.

PwC 2
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that these
consolidated interim financial statements of the Group do not present fairly, in all material respects,
the financial position of the Group as at 31 March 2020, and of its financial performance and cash
flows for the half year then ended, in accordance with IAS 34 and NZ IAS 34.
Who we report to
This report is made solely to the Tower Limited shareholders, as a body. Our review work has been
undertaken so that we might state to the Tower Limited 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 2020

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1
MICHAEL STIASSNY
SLIDE 2: CHAIRMAN’S UPDATE
Good morning and thank you for making the time to join us this morning.
With me in Auckland is our Chief Executive Officer, Richard Harding and
our Chief Financial Officer, Jeff Wright who will take you through our half
year results and answer your questions.
Almost five years ago, Tower embarked on a transformation to
reposition itself as a digital challenger brand. We believed that
underpinned by a customer-focused, digital-first strategy, Tower would
step up to successfully compete in the 21st century insurance
marketplace.
This belief has not been misplaced and, while transformation is never
easy, Tower is delivering on its ambitious plan to have New Zealanders
and Pacific Islanders see us in a new light and setting the bar for how
insurance “should” be. This is borne out by the continued delivery of
improving results over the past few years.
The business has been simplified and is growing, with more customers
choosing to insure with Tower.
Our new IT platform continues to deliver benefits with customers using
our digital channels to engage with and purchase Tower products and
manage their insurance online. It is proof that our confidence in user-
friendly technology – coupled with a genuine customer-centric focus – is
well placed.

2
Digital technology is now at the heart of our business and will be a vital
enabler as we continue to challenge industry norms.
[PAUSE]
We are living in unprecedented times, and for many of us, there is
significant uncertainty about what the future holds.
Fortunately, insurance is an inherently strong and resilient industry and –
post-transformation – Tower is now in a far better position to respond
well to post-COVID challenges. However, no business will be completely
immune to the impact of the global economic downturn we’re
experiencing and our plans must adjust accordingly.
Therefore, our focus has sharpened on managing our cost base in order
to continue to deliver shareholder value. Richard will talk about our plans
in this regard.
Another small aspect of managing our cost base has been simplifying
our corporate structure. On Monday we announced we are addressing
the complex structure of holding companies and related entities relating
to previously divested business units.
This change will have no impact to our shareholders, insurance licence,
or result in any changes for our customers, but is another important step
in driving further business efficiency.
[PAUSE]
For years we have promoted the concept of raising the bar within the
insurance industry. Simply speaking, this means doing the right thing.

3
We believe this is essential if the industry is to regain the trust of the NZ
public.
Tower has committed to not making a windfall gain from COVID-19. As a
shareholder of Tower, you can be proud of the support we’ve offered our
customers and our decision to refund motor customers a portion of their
premiums. It is a cost-neutral decision, but clearly demonstrates our
fundamental belief that people deserve better.
I would also like to acknowledge the focus and resilience of Tower’s
employees who responded well to the COVID-19 crisis. They quickly
transitioned to working from home, supported each other and maintained
their commitment to delivering good customer outcomes.
[PAUSE]
Following the capital raise in 2019 and the change in Tower’s licence
condition, Tower remains well capitalised with a solvency ratio of 280%.
Tower’s Board and management team remain strongly committed to
paying dividends and to the efficient management of capital.
However, the Reserve Bank of New Zealand has advised the financial
sector to protect solvency positions and preserve capital in light of the
COVID-19 disruption and uncertain economic outlook
Given RBNZ’s position, Tower’s Board has determined that no first-half
dividend will be paid, and any second-half dividend will be determined in
line with the company’s full year results while considering economic
conditions at the time

4
[PAUSE]
As you will know, Richard finishes with us on 1 August 2020. As this is
his last results presentation, on behalf of the Board I’d like to thank him
for his efforts. Richard has successfully led Tower’s transition from a
traditional insurer to one that is profitable, nimble and ready to disrupt
and challenge the industry. It has been no small feat.
Richard has built a skilled management team who are committed to
completing and continuing to leverage Tower’s digital transformation.
The addition of incoming CEO, Blair Turnbull, will allow us to amplify our
digital challenger strategy.
Blair has an enviable CV, achieving outstanding results for the national
and international organisations for whom he has worked.
Importantly, he has a proven global track record in large-scale digital
and data innovation, and delivering disruptive, customer-focused model.
Blair will begin at Tower on 1 August 2020, subject to completion of
regulatory approval processes.
I’ll now hand over to Richard and Jeff, who will take you through the
results and outlook before we take questions.

5

RICHARD HARDING
SLIDE 3: 2020 FIRST HALF ACHIEVEMENTS TITLE SLIDE
Thank you Michael and good morning everyone.
Thank you for joining us today and I hope you are all well and staying
safe in these unprecedented times.
SLIDE 4: STRONG FIRST HALF RESULTS WITH SOLID GROWTH
ACHIEVED
Tower continues delivering positive results with a strong first half
performance. Our reported result of $14.9 million is a $3m improvement
on the same period last year and proof that our strategy is paying off.
In my time at Tower we have worked to completely transform the
business by fixing the foundations and building new digital functionality.
It is pleasing to see we continue to grow the business by challenging
and breaking industry norms.
Our determination to deliver something better to customers has been
noticed and we continue to deliver solid growth. Gross Written Premium
in the core New Zealand portfolio increased by 11.9%, with 8.3%
attributable to organic growth and the remaining 3.6% representing the
first quarter of the Youi NZ portfolio.

6
Total GWP reached $183.6 million across New Zealand and the Pacific,
a $14 million improvement on the same period last year, thanks in part
to the continued strength of our digital sales channels.
Continued implementation of risk-based pricing along with improved
underwriting and a reversion to more benign weather patterns prevailing
has seen the claims ratio stabilise.
Excluding large events, our claims ratio stabilised at 44.6%, a 0.2%
increase from 44.4% in the first half of 2019. The Timaru Hailstorm was
a large event that saw our total claims expense ratio increase slightly to
46.4%, a 1.9% increase on the first half of 2019.
Our Pacific business continues to deliver solid and profitable growth.
Improved underwriting and a benign weather environment in the first half
drove a positive outcome, however, this will be impacted by Tropical
Cyclone Harold claims in the second half.
In the first half an increase to provisions for legal fees relating to the
litigation of the EQC receivables resulted in a $1.1 million after-tax
expense which Jeff will provide more detail on shortly.
Last year we successfully delivered and launched our new IT platform
and we are now over halfway through migrating customers to the new
platform and rationalising them onto new products.
We continue to closely manage this process and support our customers
through the change, and as a result are seeing retention rates in line
with regular renewals.

7
Given the emergence of COVID-19 in March, the results we delivered in
the first half demonstrate the strength of our strategy and we are now in
a good position to respond in an uncertain environment.
SLIDE 5: CUSTOMERS KEEP CHOOSING TOWER
As the only New Zealand listed insurer, we are focussed on offering
customers a better alternative and this focus is driving solid growth in
our core book.
As I mentioned earlier, our continued momentum has driven solid GWP
growth, with GWP growing across all NZ products.
Including the first quarter addition of the Youi NZ portfolio, GWP in:
• NZ House grew 4.6%, split evenly between volume and rating
• NZ Contents grew 9.6 % with the majority attributable to rating,
due to the EQC levy change, and
• NZ Motor growing 14.7%, driven by both volume and growth
This is being achieved through a combination of factors, including:
• Continued execution of risk-based pricing and simpler policies that
customers can understand
• Constant refinement of underwriting criteria enabling more
granular assessment
• Stable retention through our digital and phone channels, and
• Attracting new, profitable customers with improved and targeted
offerings.

8
The growth we have achieved is the result of offering customers simpler
insurance at a fair price and realising the potential of the Tower brand.
It is pleasing to report that we are now experiencing sustainable growth
across the Pacific region, and Jeff will speak to you in more detail on this
shortly.
SLIDE 6: STRONG DIGITAL SALES CONTINUE
In 2016 we began our digital transformation journey and since then I
have consistently said that digital will drive the future growth of Tower.
We have continued to place significant effort into improving this
channel’s performance and attracting new customers.
Our efforts to become a digital insurer continue to reap rewards, with
almost 60% of new business coming through our digital channels in
March 2020. This compares to less than 10% during 2016.
We have delivered significant growth, with GWP through digital channels
reaching $24.9m in the first half. This is thanks to continuous
improvement of our digital channels.
Our recently improved digital claims lodgement process and innovations
like our claims chatbot, Charlie, has resulted in over 40% of claims being
lodged online in March 2020.
And the recent launch of our full self-service offering has resulted in 14%
of our migrated customers signing up. It is pleasing to increasing
adoption and usage by these customers, with usage rates increasing at
around 50% month on month since launch.

9
This new self-service capability enables customers to buy insurance,
manage their policies and lodge claims all online, delivering increased
operational efficiencies.
Digital remains one of the most crucial, foundations of our business
moving forward. It enables differentiation, agility, innovation and growth,
and our new platform will enable us to respond well in a changing
economic environment.
SLIDE 7: UNDERWRITING EXCELLENCE
Underwriting and claims are intrinsically linked and sit at the heart of
what an insurance company is and does for its customers.
The focus on achieving underwriting excellence is a constant for Tower
and continues to play a vital part in the delivery of our strategy.
We have taken significant steps toward achieving our underwriting
excellence goal and have
• Implemented better risk selection and underwriting processes
• Continued focus on claims leakage and recoveries
• Launched and continued to refine our plain language products that
have won awards and provide clarity to customers and our
employees at claims time; and
• implemented new data practices to enable us to accurately monitor
our portfolio
This relentless focus on underwriting excellence has helped us shift our
portfolio to a more balanced mix and stabilise claim frequency.

10
This is particularly noticeable in our NZ house product with clear
products and benefits for customers seeing our frequency stabilise in
line with expectations, after a year of very benign weather.
Almost two years ago, we led the way with risk-based pricing and
removing cross-subsidisation between low and high-risk customers.
Being a first mover gave us a 12-month head start and we continue to
benefit from this by growing in Auckland and other low-risk areas like
Hamilton and Taranaki.
Along with the changes to the EQC cap, the reduction of extreme risk
policies, combined with already completed changes in our Wellington
portfolio has reduced the amount of reinsurance cover we require.
As our customers migrate onto the new IT platform, we will utilise the
improved rating engine, more granular segmentation and pricing
approach to drive further growth and underwriting improvements.
It is clear this strategy is working and will continue to deliver growth and
reinsurance efficiency in future.
SLIDE 8: CUSTOMER MIGRATION WELL UNDERWAY
We have invested in the business to drive long term value. As we’ve
outlined previously, a major component of this is new technology and
moving customers to the new platform and our new product set.
Managing customers through the migration process is one of the most
important parts of our technology transformation and we created a

11
tailored customer management approach to reduce risk, maximise
retention and manage customer impact.
Migration is now well underway with retention rates in line with our
expectations. Combined with new business, over half of our in-force
policies are now on the new system.
While moving customers to the new system, we are also moving them
from hundreds of different products to a core set of just 12. Moving
around 350,000 customers to a core set of 12 products will deliver
significant benefits to our customers and efficiencies in our business.
Customer migration continues and will be complete by the end of the
2020 calendar year.
Youi NZ customers are also being migrated, with over 7,000 customers
successfully transferred to our new system and new product set.
Migration of Youi NZ customers is expected to be complete by the end
of February 2021.
As we’ve said before, during the migration we’re experiencing a
duplication of costs. Once our customer migration is completed, we
expect costs of between $5m - $7m pre-tax to be removed from our
expense base.
SLIDE 9: SUPPORTING NZ THROUGH COVID-19
COVID-19 is a truly unprecedented global event and I commend the
Government’s swift action taken to flatten the curve and minimise the
impact to people’s health.

12
Here in New Zealand, the country went into complete lockdown for
around four weeks, with strict orders to stay home and only essential
business allowed to operate.
Insurers play an important part in the lives of customers, providing peace
of mind that we are there to set things right when we’re needed and
Tower was granted licence to continue operating during this lockdown
period.
Fortunately, our investment in technology allowed us to rapidly adapt
and enabled all our team to work from home, ensuring their health and
safety and allowing us to be fully operational and ready to help
customers who needed us.
During the lockdown period our focus was firmly on supporting our
customers in what we know was an unsettling time.
To help those customers experiencing genuine hardship, we introduced
a number of measures to reduce financial pressure including
comprehensive insurance reviews and payment deferral options.
So far, we have had only a small number of customers utilise these
solutions.
In the lead up to and during the level 4 lockdown we saw a significant
reduction in new business, which has impacted our growth. As the
country and economy is now reopening in level 2, we are seeing new
business return.

13
This is not surprising given that people were unable to buy and sell cars
and houses, and were focussed on things other than changing their
insurance.
The inability to trade also meant that strong retention rates were
experienced during this period.
However, there is no doubt the most significant impact of the level 3 and
4 lockdown was a reduction in motor claims by around 70% compared to
our normal claims experience.
As a New Zealand company that is building its brand on being a
challenger and standing up for better customer outcomes, passing the
reduction in motor claims costs back to our customers is the right thing
to do.
We announced our intent to do this in April and now that we understand
the reduction in claims costs, I am pleased to confirm that we will be
refunding at least $6.8m to our motor customers in June. The total cost
of the refund is offset by the reduced claims cost and will result in a
neutral financial impact.
We are still working through the finer details to ensure the refund is
managed appropriately, but I know that customers will appreciate having
a percentage of their premium returned in these tough economic times.
We recognise there may be supply chain constraints due to the
lockdown as well as decreased usage of public transport and this may
result in a slight uplift in claims expenses in the short term, however, the

14
significance of the reduction in claims cost meant it was important to
pass this back to customers.
I will now hand to Jeff who will take you through our detailed financial
results.
JEFF WRIGHT
SLIDE 10: FINANCIAL PERFORMANCE TITLE SLIDE
Thank you Richard and good morning everyone
SLIDE 11: GROUP FINANCIAL PERFORMANCE
Looking at the consolidated results, we can see that continued growth
was a key driver of Tower’s half year results. This growth was offset by
the impacts of the Timaru Hailstorm and lower investment income.
We have continued to deliver solid growth this half, with gross written
premium increasing $14m compared the same period last year. At the
same time, claims costs excluding large events rose $8m due to the
growth in risks. Underlying profit after tax reduced slightly to $16.9m due
to the impacts of the Timaru Hailstorm, lower investment income, and
higher expenses relating to the management of multiple systems
through customer migration.
The Canterbury Earthquake portfolio is performing well and in line with
expectations, with an increase in provision for new over-caps offset by
other releases.

15
There was also an increase in provisions for legal fees for the EQC
receivable, resulting in a total Canterbury impact of $1.1m after tax, and
I will provide more detail on this shortly.
Our reported profit of $14.9 million after tax is a continued improvement,
up $3 million on the same period last year.
We had a strong first half that included a slowing of growth through
March as the impacts of COVID were felt. While we saw this continue
through April and May and it will impact our second half, it is good to see
business returning as the economy reopens.
SLIDE 12: MOVEMENT IN UNDERLYING PROFIT BEFORE TAX
Slide 12 details the key drivers of underlying profit before tax from the
first half of 2019, to the first half of 2020.
The solid growth is reflected in the $17.2m increase in net earned
premium, a combination of growth in our core portfolio and our risk-
based pricing approach.
On this slide you can also see the impact of the Timaru hailstorm and
growth in our risk count, which has resulted in an increase in our claims
expense for NZ.
Benign weather and remediation across key Pacific portfolios delivered a
slight reduction in claims costs.
As Richard mentioned earlier, management expenses are higher due to
the completion of our IT transformation and investment in customer
migration, along with the amortisation of the Youi NZ portfolio.

16
SLIDE 13: FINANCIAL PERFORMANCE NEW ZEALAND
Our strategy continues driving growth in our New Zealand business, with
positive results offset by large weather events and increased costs
associated with the amortisation of Youi NZ, decreased investment
income and the management of multiple technology systems.
AS we have mentioned earlier, growth remains solid and excluding large
events, our claims ratio has stabilised.
Our management expense ratio increased slightly to 37.3% due to the
amortisation of the Youi NZ portfolio and the costs associated with
managing multiple systems through migration.
As a result, underlying profit decreased to $13.1m, which is $3.4m lower
than the same period last year.
SLIDE 14: STABILISED NZ CLAIMS RATIO
New Zealand claims expenses have stabilised over the past 12 months
with a number of underwriting and pricing initiatives helping to offset
inflation.
As you can see on this slide, there are three key factors that have
contributed to this positive result.
We experienced a small uplift in the claims ratio due to the Timaru
hailstorm with a cost of $2.9m, net of reinsurance, resulting in a 2.2%
increase.

17
Our new, simpler products and risk-based pricing approach have
contributed to a 2.4% reduction in NZ House, along with reduced claim
severity.
As also reported by other insurers, New Zealand is experiencing inflation
in motor claims costs due to the increasing cost of repairs because of
ongoing modernisation of vehicles with enhanced technology. This
increase is being addressed through ongoing pricing activity.
While it is pleasing to have stabilised our claims ratio, we remain
focussed on refining our products and pricing approach to ensure we
continue addressing claims costs.

SLIDE 15: FINANCIAL PERFORMANCE PACIFIC
We are pleased to see contributions from our Pacific business continue
to improve.
We saw the strongest revenue growth in Vanuatu, Solomon Islands and
Samoa thanks to additional underwriting, pricing and marketing support
for our local teams.
Our continued disciplined approach in Fiji has led to improved
profitability and with the remediation of the Papua New Guinea portfolio
now complete, this portfolio has also returned to profitability
Overall, Pacific gross written premium was slightly up, increasing $1.9
million to $30 million.

18
Improvements in claims costs have been delivered through targeted
underwriting and pricing initiatives across our key markets, and,
combined with a benign weather environment in the first half, have
resulted in a 1.7% improvement in the claims ratio excluding large
events.
We achieved a lower expense ratio in pacific due to ongoing work to
remove duplication of back-office functions. It’s important to note here
that due to the nature of the distribution model in the Pacific, commission
costs are higher than in New Zealand. With commissions excluded, the
management expense ratio is 36.3%.
Unfortunately, the positive results achieved in the Pacific in the first half
will be offset by the impacts of Tropical Cyclone Harold in the second
half.
SLIDE 16: SOLID SOLVENCY POSITION
Following the successful completion of the capital raise, the change in
licence condition and purchase of the Youi NZ portfolio, Tower
Insurance remains in a strong capital position.
Tower has unique solvency strength with the equivalent of 280% of
Minimum Solvency Capital and as at 31 March 2020, held $45.3m above
RBNZ minimum requirements, with Actual Solvency Capital of $148.2m.
SLIDE 17: EQC RECEIVABLE UPDATE
We have long maintained how fundamentally broken the EQC system is
and advocated strongly for a complete overhaul.

19
The Cartwright inquiry into the EQC released a critical report that
validated our long-held belief that EQC failed to respond adequately.
This report detailed the significant problems of the EQC and how
woefully unprepared they were to respond to an event of this size.
The report highlighted the EQC’s significant lack of capability to
adequately understand and assess claims which resulted in
inefficiencies and the poor customer outcomes that in some cases, still
drag on today.
This demonstrates in some part, why Tower took action to remediate
customers’ land and homes, despite it being the responsibility of the
EQC.
But, it is not our role – nor our shareholders’ responsibility – to pick up
the tab for the EQC’s lack of preparedness and the failure of its repair
providers, which is why we are seeking recovery.
Considering the nature of the report and the many failings identified by
the enquiry, we are disappointed that an agreement could not be
reached through the alternate dispute resolution process, and that full
litigation is now required.
An increase in provisions for legal fees for the EQC receivable has been
made, resulting in a Canterbury impact of $1.1m after tax.

20
SLIDE 18: LARGE EVENTS
As Richard said earlier, managing risk is at the heart of what we do as
an insurer and our reinsurance programme provides certainty and
protection.
In November 2019, a large hailstorm hit Timaru, causing claims
expenses of $4.9m. $2m of this was recovered from reinsurance which
resulted in a before-tax impact of $2.9m in the first half.
In April 2020, Tropical Cyclone Harold caused widespread damage in
the Pacific Islands. While Vanuatu & Tonga were most impacted, we
have also received claims in Solomon Islands and Fiji and this will
impact second half results by $8m before tax.
Combined with the Timaru hailstorm earlier in the year, Tower
Insurance’s aggregate reinsurance cover has now been activated.
This provides immediate cover for any future large weather events in
New Zealand and the Pacific in excess of $1m up to $7.5 million per
event, to a total of $20m for the remainder of FY20.
To date, our total large event expense for FY20 is approximately $10.9m
before tax. This is $2.9m more than the $8m large event assumption in
Tower’s previously provided FY20 market guidance.
Thank you. I will now hand back to Richard who will provide an update
on our strategy and outlook.

21
RICHARD HARDING
SLIDE 19: STRATEGY AND OUTLOOK TITLE SLIDE
SLIDE 20: DIGITAL TO CONTINUE DRIVING FUTURE GROWTH
Thank you Jeff.
Our plan has driven change and transformed the business.
The work we have completed over the past few years has provided a
strong and solid base for us to keep growing from.
We have turned industry norms on their head and delivered a number of
firsts to the New Zealand market, and the growth we have achieved is
demonstration that people have noticed what we’re doing.
Our strategy has always been to deliver better outcomes for customers,
and moving forward, this stays true as we continue to challenge norms
and improve our digital offering.
And in a changing economic environment being a digital first business
positions us well to respond quickly.
Our new technology platform enables innovation and rapid response to
customer needs. It will allow us to take new products to market faster,
alter pricing to test and learn and drive growth in new areas.
Our online capability is unique and is built for the modern world. With the
rapid increase in consumers using digital, this important part of our
strategy continues be a core focus and will be vital to continue driving
growth.

22
Along with improving the customer experience, automation and
digitisation will drive productivity gains and increased agility and
flexibility of our workforce.
In short, we will continue to drive our digital challenger strategy forward,
putting customers first and finding ways to do this more efficiently.
SLIDE 21: UNCERTAIN ECONOMIC ENVIRONMENT AHEAD
It is clear that the world has changed, and we are entering an extended
period of uncertainty.
Looking back over my 30 or so years in the insurance industry,
insurance has always been resilient to economic downturn, particularly
for those companies, like Tower, that operate in domestic personal lines.
Our strategy positions us well to adapt and respond in a changing
environment. We have new technology in place that we can keep
refining to meet the changing needs of customers and attract them to
our business.
However, these are unprecedented times and there is considerable
uncertainty on the horizon.
The Pacific Islands are likely to be heavily impacted, as many of these
economies are built on tourism and dependant on global trade, which
will be significantly reduced for the foreseeable future.
And the global recession we’re entering has been labelled the worst
economic change since the great depression and the future is now even
harder than normal to predict.

23
Based on my experience, during economic uncertainty, most customers
try to keep their most important assets insured, primarily their homes
and their cars
It means that on the one hand, customers tend to shop around less and
stick to what they know – brands that they trust and perceive as high
quality. But on the other hand, customers are more sensitive to price and
any changes that are made.
Balancing these different objectives requires close and careful
management of the portfolio and ongoing engagement with your
customer base to understand what is happening in the market.
Across all areas of our business we now expect to be operating in a low
growth environment for the coming 12 to 18 months.
You will have heard me talk about our strategy to grow our business and
reduce our expense ratio. Our plan was to achieve business growth from
our existing cost base.
However, in anticipation of this extended economic slowdown and low-
growth environment, we need to take action now to reduce our cost base
to achieve our target MER of 35%.
We are currently working through a process to deliver savings of $7.2m
per year, which includes a proposal for a reduction of 95 FTE, along with
other cost-out initiatives.
If the proposed changes are confirmed with our employees, the net
effect of this activity means that heading into FY21, Tower would be
operating at or near its target MER of 35%

24
At Tower we are a close-knit team and any processes or decisions that
affect our people are never made lightly. As you would expect, we will
support our team through any changes as best we can.
However, it is important that Tower is in a strong and sustainable
position to weather the economic headwinds ahead.
SLIDE 22: UPDATED FY20 FINANCIAL OUTLOOK
We have updated our guidance for Tower’s underlying NPAT in FY20 to
a range of between $25m to $28m, reflecting the following:
• Tropical Cyclone Harold and the Timaru Hailstorm resulted in a
$10.9m before-tax impact compared to an assumption of $8m in
Tower’s initial FY20 guidance
• Lower growth rate is being assumed in second half due to
recessionary economic environment
• Additional expense reduction activity will deliver savings of $2.6m
in the last quarter of FY20
• If proposed FTE changes are confirmed, one-off restructuring
costs will impact Tower’s non-underlying profit by $2m
There is no financial impact from Tower’s refund of motor premiums due
to the COVID-19 lockdown, as these are offset by any savings in claims
costs
As Michael mentioned earlier, RBNZ has advised the financial sector to
protect solvency positions and preserve capital in light of the COVID-19
disruption and uncertain economic outlook

25
Given RBNZ’s position, Tower’s Board has determined that no first-half
dividend will be paid, and any second-half dividend will be determined in
line with the company’s full year results while considering economic
conditions at the time
Today’s results demonstrate the strength the Tower business and show
it is well placed to respond to the changing economic environment.
You can be confident that our focus remains on solidifying our position
as a digital challenger and delivering shareholder value for you.
Before I ask for questions, I want to thank the Tower executive and
wider team. This is my last results announcement as CEO, and I am sad
to say goodbye.
I am proud of what we have achieved. The company we have created is
vastly different from what it used to be, and I know that so much
opportunity still exists in this business.
While I am excited to return to my family in Sydney and spend more time
with them, I will be closely following Tower’s progress as it continues to
transform into a digital insurer.
The Board’s choice of Blair Turnbull as Tower’s new CEO gives me
great confidence that the work we have underway and the improving
results we are delivering will continue.
Blair brings extensive, large-scale digital and data innovation experience
and a passion for delivering disruptive, customer-focused models. His
experience will be vital in helping Tower achieve the next phase of its
strategy and I look forward to seeing him bring this to life.

26
I’d like to thank the Board for their support over the past few years, it has
been critical in our journey to transform Tower and achieve these solid
results.
Thank you for your support as shareholders during my time here, I know
that there have been some challenges, but we are on good footing now
and well placed to respond to what the future holds.
And thank you to everyone at Tower for your efforts in driving change
and transforming the business.
Thank you.
ENDS