IFRS 17 and Interim Solvency Standard Transition Update

Level 5, 136 Fanshawe Street
Auckland 1142, New Zealand
ARBN 645 941 028
Incorporated in New Zealand
Classification: Sensitive



15 May 2024


IFRS 17 AND INTERIM SOLVENCY STANDARD TRANSITION UPDATE
Tower today released the attached presentation on the new insurance accounting standard, IFRS 17 Insurance
Contracts, and the Reserve Bank of New Zealand (RBNZ) Interim Solvency Standard (ISS), which now apply in
the current financial year, FY24.
Tower Chief Financial Officer, Paul Johnston, says that the adoption of these new standards is not expected to
have any material impact.
“Tower’s strategy, profitability and dividend policy remain unaffected by the new standards, although the
presentation and disclosure of information in Tower’s financial statements from HY24 onwards will change,” he
said.
Full details of the disclosure changes are provided in the presentation, including the transitional adjustments to
the Tower FY23 Balance Sheet and Statement of Comprehensive Income, which confirm the impacts are
minimal and immaterial.
ENDS

This announcement has been authorised by:
Blair Turnbull
Chief Executive Officer
Tower Limited

For media enquiries, please contact in the first instance:
Emily Davies
Head of Corporate Affairs and Reputation
+64 21 815 149
emily.davies@tower.co.nz


For investor queries, please contact in the first instance:
James Silcock
Head of Strategy, Planning and Investor Relations
+64 22 395 9327
james.silcock@tower.co.nz

---

Tower Limited
Investor update on
IFRS 17 and the
interim solvency
standard
May 2024

2
IFRS 17
A new accounting standard 4
Initial impact 6
Adjustments to profit & loss 7
Key measurement changes 8
Restated financial statements and key metrics 13
Interim Solvency Standard
Overview 19
Summary of key changes 20
Changes to FY23 solvency margin 22
Changes to FY23 solvency ratio 23
Solvency update at 31 December 2023 24
Contents
Appendices 25

3
IFRS 17
Accounting for insurance contracts

4
NZ IFRS 17 Insurance Contracts (IFRS 17) is a new accounting standard applicable to all insurance companies. Tower is required to
comply with IFRS 17 from 1 October 2023. Tower’s HY24 results, to be released in May 2024, will be the first interim reporting period
under IFRS 17. Although Tower’s financial statements will look quite different, the practical impact of IFRS 17 on Tower’s operations is
insignificant, as outlined below.
No impact to
underlying business
economics
Strategy
A new accounting standard
No material changes
to profitability or
timing of revenue
recognition
Profitability
No material impact to
capital or timing of
cash flows
Cash & capital
No change to
dividend policy
Dividend policy
Minor reduction, of
$2.7m, in opening
equity on transition
Net assets
Changes to
presentation and
disclosure in financial
statements
Reporting
Existing key reporting
metrics remain,
supplemented by
IFRS 17 metrics
Key metrics
FY23 comparatives
have been restated
under IFRS 17
Comparatives

5
Overview of IFRS 17
IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts. It replaces NZ
IFRS 4 Insurance contracts (IFRS 4).
Objectives of IFRS 17
•To establish consistent accounting principles for all insurance contracts across general, life and health insurance.
•To improve the transparency and comparability of financial disclosures.
Measurement model
•Tower will apply the Premium Allocation Approach (PAA), a simplified approach allowed under IFRS 17 where insurance revenue
is recognised over the term of the policy, similar to IFRS 4.
•All current Tower products meet the eligibility criteria to use the PAA measurement model.
Unaudited
•Tower has consulted with its professional advisers in the preparation of this Investor Update, however the comparatives
contained within this presentation and the associated tables are unaudited.
•The comparatives will be covered by the audit opinion on Tower’s FY24 year-end financial statements.

6
IFRS 17 initial impact
Adopting IFRS 17 reduced shareholders’ equity by $2.7m as at 1 October 2022
(0.2m)
0.1m(4.8m)
314.8m
•A transition adjustment has
been calculated to record the
impact of adopting IFRS 17 on
opening equity for FY23.
•On transition to IFRS 17, at
1 October 2022, the net
impact is a decrease in Group
shareholders’ equity of $2.7m.
1.1m
317.5m
1.1m
1
Note 1: deferred Insurance Acquisition Cash Flows (IACF) replaces the IFRS 4 concept of deferred acquisition costs

7
IFRS 17 adjustments to profit & loss
Adopting IFRS 17 reduced the FY23 net loss after tax by $0.2m
FY23
(Net loss after tax for the year ended 30 September 2023)
(1.2m)
(1.0m)
(0.4m)1.0m
0.3m
(0.6m)
(5.1m)
(5.1m)
(0.1m)
0.5m
0.4m
(0.7m)
0.0m
(0.1m)
HY23
(Net loss after tax for the half year ended 31 March 2023)

From IFRS 4 to IFRS 17
Key measurement changes

9
Risk adjustment
IFRS 17 risk adjustment replaces IFRS 4 risk margin
•The risk adjustment reflects the compensation the insurer requires
for bearing uncertainty related to timing and amount of cash flows
arising from non-financial risks, therefore where there is more
uncertainty about future cash flows, the risk adjustment is
expected to be larger. Tower has separately assessed the risk
adjustment for NZ business as usual (BAU), Pacific and Canterbury
Earthquake (CEQ) reserves.
•Tower will apply a ‘cost of capital’ approach in determining the risk
adjustment for the BAU reserves. Tower will apply a ‘confidence
level technique’, at a 75% probability of adequacy (PoA), for the
Pacific reserves; and a 90% PoA for CEQ reserves.
•The impact of this change on transition for NZ BAU reserves is a
$0.8m (pre-tax) increase to retained earnings, due to the reduction
in PoA from 75% to 72.5%. This is partially offset by a group
diversification benefit adjustment of $0.7m (pre-tax) decrease to
retained earnings.
•The impact of this change on transition for CEQ reserves is
expected to be $4.8m (pre-tax) decrease to retained earnings, due
to the increase in CEQ PoA from 75% to 90%.
On transition the NZ BAU cost of capital
approach is equivalent to a 72.5% probability of
adequacy for BAU claims
Risk margin
Central
estimate of
future cash
flows
Risk
adjustment
IFRS 4
IFRS 17 reserves
All reserves
90%
PoA
NZ BAU
Pacific
CEQ
Central
estimate of
future cash
flows
75%
PoA
72.5%
PoA
75%
PoA

10
Discount rate calculationChange in presentation of discounting
Illiquidity premium (%)Risk-free rate (%)
+
•Tower has adopted a 'bottom-up' approach to derive
the NZ discount rate. There is a no illiquidity premium
applied on transition.
•All IFRS 17 claims reserves for NZ are discounted, while
with IFRS 4 only certain reserves were discounted as at
1 October 2022. The impact of this change on transition
is a $1.1m (pre-tax) increase to retained earnings.
•Tower will not discount Pacific liabilities for incurred
claims (LIC) as the effect of discounting is immaterial.
Net claims expense
1
:
Present value adjustment on
new claims
+
Discount unwind
+
Impact from changes in
discount rates
IFRS 4
Insurance service expense
1
:
Present value adjustment on
new claims
Insurance finance expense
2
:
Discount unwind
+
Impact from changes in
discount rates
IFRS 17
1
Part of underwriting result or insurance service result
2
Below insurance service result
Discounting

11
Onerous contracts calculation
Unearned
premiums less
deferred IACF
1
-
The IFRS 17 onerous contracts tests replaces the IFRS 4 liability
adequacy test (LAT)
•An onerous contract test is performed for groups of insurance
contracts where ‘facts and circumstances’ have indicated the
group of contracts may be loss making for Tower.
•The test is completed at a more granular level than the LAT and
is calculated gross of reinsurance, whereas the LAT was
calculated net of reinsurance.
•If a group is considered onerous then a loss component is
recognised against insurance service expenses in the statement
of comprehensive income, and against Liability for Remaining
Coverage (LRC) in the balance sheet.
•Onerous contracts do not change ultimate profitability, but do
impact the timing of revenue recognition, with assessed future
losses recognised immediately.
Discounted
claims and
expense
forecast
=
Loss
component
(if < 0)
•Although there were no onerous contracts as at transition
date and therefore no impact to opening retained earnings, a
provision for onerous contracts in the Fiji Motor portfolio was
recognised in the restated profit & loss comparatives for
HY23 ($0.7m pre-tax) and FY23 ($0.6m pre-tax)
Note 1: deferred Insurance Acquisition Cash Flows (IACF) replaces the IFRS 4 concept of deferred acquisition costs
Onerous contracts

12
Insurance acquisition cash flows
IFRS 17 IACF replaces the IFRS 4 concept of acquisition
costs
•Tower will defer IACF and recognise them across the
life of the underlying insurance contracts, an approach
that is consistent with deferred acquisition costs (DAC)
under IFRS 4.
•The key difference in the amounts deferred under each
method relates to costs considered non-attributable to
insurance contracts under IFRS 17, which are excluded
from the deferral.
•The impact of this change on transition is a $0.2m (pre-
tax) decrease to retained earnings.
Calculation of liability for
remaining coverage (LRC)
LRC is the liability representing the insurance coverage to be
provided by Tower after the balance date. It is the equivalent of
unearned premiums, premium receivables and deferred
insurance costs under IFRS 4.
Opening LRCClosing LRC
Premiums
received
IACF
deferred
IACF
amortised
Insurance
revenue
recognised

Restated financial statements
and key metrics

14
Restated balance sheet
•While restated net assets are materially consistent with IFRS 4, the
total assets and total liabilities have decreased due to
reclassifications required by IFRS 17.
•Reinsurance contracts assets represents the asset for incurred
claims (AIC) comprising reinsurance recoveries previously held in
receivables under IFRS 4, less the asset for remaining coverage
(ARC) comprising the reinsurance premium payable previously held
in payables, plus deferred insurance costs related to reinsurance.
•Liability for remaining coverage (LRC) represents the net liability to
customers on insurance contracts, previously held in receivables,
unearned premiums and deferred insurance costs under IFRS 4.
•Liability for incurred claims (LIC) is consistent with the outstanding
claims under IFRS 4.
•The reinsurance contract assets and LIC increased at 30 September
2023 due to the large events occurring during FY23. The profit
impact of these large events decreased the net equity of Tower from
FY22 to FY23.
Refer to the appendices for a detailed reconciliation between the reported IFRS 4 and the restated IFRS 17 balance sheets
Our IFRS 17 balance sheet at 30 September 2023 and 1 October 2022
Restated consolidated balance sheet
$ thousands
30-Sep-23
1-Oct-22
Cash and cash equivalents
64,009
84,502
Investments
258,798
258,634
Receivables
16,797
13,408
Current tax assets
12,917
13,069
Assets classified as held for sale
11,505
16,673
Reinsurance contract assets
147,236
26,918
Deferred tax assets
16,074
16,492
Right-of-use assets
23,204
23,326
Property, plant and equipment
6,280
5,417
Intangible assets
98,524
94,653
Total assets
655,344
553,092
Payables
18,378
20,861
Liability for remaining coverage
44,614
43,343
Liability for incurred claims
241,195
121,569
Current tax liabilities
198
136
Liabilities classified as held for sale
7,609
5,119
Provisions
12,823
11,873
Lease liabilities
32,615
35,054
Deferred tax liabilities
178
339
Total liabilities
357,610
238,294
Net assets
297,734
314,798

15
Restated statutory profit & loss
•Insurance revenue is consistent with gross earned premium
under IFRS 4 plus commission revenue related to insurance
contracts.
•Insurance service expenses is consistent with gross claims,
commissions and underwriting expenses under IFRS 4.
•Net income from reinsurance contracts held is consistent with
outward reinsurance premium expense and reinsurance
recoveries under IFRS 4.
•Net insurance finance expense represents the discount
unwind, and impact from changes in discount rates on LIC and
AIC.
•IFRS 17 requires non-attributable income and expenses
related to activities that do not directly relate to the fulfilment
of insurance contracts to be disclosed separately from the
insurance service result as other income and other operating
expenses.
Our restated statement of comprehensive income for FY23 and HY23
Refer to the appendices for a detailed reconciliation between the reported IFRS 4 and the restated IFRS 17 balance sheets
Restated consolidated statement of comprehensive income
$ thousands30-Sep-2331-Mar-23
Insurance revenue472,611 225,993
Insurance service expense(604,851)(445,668)
Net income from reinsurance contracts held124,360 215,185
Insurance service result(7,880)(4,490)
Net investment income14,329 6,277
Net insurance finance expense(1,348)(663)
Net insurance and investment result5,101 1,124
Other income5,727 2,724
Other operating expenses(2,145)(1,259)
Finance costs(920)(462)
Profit before taxation from continuing operations7,763 2,127
Tax expense(5,176)(2,044)
Profit after taxation from continuing operations2,587 83
Loss after taxation from discontinued operations(3,609)(5,135)
Loss after taxation for the year(1,022)(5,052)
Items that may be reclassified to profit or loss
Currency translation differences(1,494)(2,130)
Reclassification of the foreign currency translation reserve544 544
Other comprehensive loss net of taxation(950)(1,586)
Total comprehensive loss for the year(1,972)(6,638)

16
Restated underlying profit and loss
Refer to appendices for reconciliation to statutory reporting
Our restated IFRS 17 underlying profit and loss for FY23 and HY23
•Net claims expense for large events relates to the large events
occurring during FY23 (including the Auckland & upper North
Island weather event, Cyclones Gabrielle, Judy and Kevin). The
profit impact of these large events decreased the underlying
profit for Tower in 2023. The large events claims ratio improved
between HY23 and FY23 as there were fewer large events in the
second half.
•BAU claims ratio has a minor improvement under restatement
due to an increase in net insurance revenue and the unwind of
the discount on LIC now excluded from claims expense.
•Expense ratio has a minor improvement under restatement due
to a reclass of non-attributable expenses from management and
sales expenses to other income and expenses, partially offset
by the onerous contract expense.
$ million
FY23 Restated
underlying profit
HY23 Restated
underlying profit
Gross written premium526.8 245.0
Insurance revenue487.6 233.8
Reinsurance expense(69.5)(32.2)
Net insurance revenue418.1 201.7
Net claims expense - BAU(230.2)(103.0)
Net claims expense - large events(38.2)(33.9)
Large event reinsurance reinstatement(17.4)(3.4)
Management and sales expenses(123.9)(64.7)
Net commission expense(10.1)(5.8)
Net insurance service expense
(419.8)(210.8)
Insurance service result(1.7)(9.1)
Net investment income14.3 6.3
Net insurance finance expense(1.3)(0.7)
Other income and expenses0.2 (0.9)
Underlying profit before tax11.5 (4.4)
Income tax expense
(4.4)0.8
Underlying net profit/(loss) after tax (NPAT)7.1 (3.7)
Canterbury impact (net of tax)(0.5)(0.6)
All other non-underlying costs (net of tax)(7.6)(0.8)
Reported loss after tax
(1.0)(5.1)
BAU claims ratio
55.1%51.1%
Large events claim ratio
13.3%18.5%
Expense ratio
32.0%35.0%
Combined Operating Ratio100.4%104.5%

17
Changes in key metrics
MetricDefinitionImpact from IFRS 17 adoption
Gross written premium
(GWP)
The total premiums on insurance, excluding taxes and
levies, underwritten by Tower during the financial reporting
period, before deduction of any reinsurance premium
Gross Written Premium does not exist under IFRS 17 however will
continue to be provided as part of our reporting
Insurance revenue
The portion of premiums recognised as revenue in the
accounting period, reflecting insurance coverage provided
during the period
This is a new metric approximately equivalent to gross earned
premium (GEP) under IFRS 4, plus insurance commission relating
to insurance contracts
Net insurance revenueInsurance revenue less reinsurance expenses
This is a management metric approximately equivalent to net
earned premium (NEP) under IFRS 4
Insurance service result
Comprises insurance revenue, insurance service expenses
and reinsurance income and expenses
This is a new metric approximately equivalent to underwriting
profit under IFRS 4 (excluding some non-attributable costs)
BAU claims ratio
BAU claims expense (net of reinsurance recoveries) as a
percentage of net insurance revenue
There will be a minor decrease in this ratio due to the unwind of
the discount which is now excluded from claims expense
Large events
claims ratio
Large events claims expense (net of reinsurance recoveries)
as a percentage of net insurance revenue
There will be a minor decrease in this ratio due to the increase in
net insurance revenue
Management expense ratio
(MER)
Management and sales expense as a percentage of net
insurance revenue
There is a small decrease in this ratio due to the non-attributable
expenses that are excluded from insurance service expense
under IFRS 17, partially offset by the onerous contract expense
Combined operating ratio
(COR)
The sum of the BAU and large event claims ratios, and MER
as a percentage of net insurance revenue
Minor impact from the above changes

Interim
Solvency
Standard
18

19
The RBNZ has introduced the Interim Solvency Standard 2023 (ISS), which replaces the Non-Life Solvency Standard (NLSS). Tower is
required to comply with the ISS under its conditions of licence, from 1 October 2023. The ISS requires quarterly reporting on Tower’s
solvency position. Tower’s solvency ratios and margin have changed, but we do not expect that to substantially change our strategy
or the way we manage capital, as outlined below.
Parts of the ISS need clarification or are not currently working as intended. The RBNZ is consulting on a proposed second
amendment
1
to the ISS, which is not expected to be issued and effective until Tower’s 2025 financial year. The additional proposed
changes to the ISS are likely to have a material impact on Tower’s regulatory solvency position and will reduce the solvency margin
to a level closer to that previously reported under the NLSS. However, the second amendment does not affect the regulatory
solvency position unless and until it comes into effect.
No impact to
underlying business
economics
Strategy
Overview of ISS
Decrease to solvency
ratio, reflecting a
change in
presentation
Solvency ratios
No change to our
dividend policy
Dividend policy
Note 1: https://www.rbnz.govt.nz/have-your-say/2020/review-of-the-insurance-solvency-standards
Increased, reflecting
a lower prescribed
capital requirement
(PCR)
Solvency margin

20
Summary of key changes
The ISS introduces new terminology for the solvency measures and some changes to their inputs
From the NLSS
terminology
To the new ISS
terminology​
Calculation under ISS
Actual solvency capital
(ASC)
Solvency capital (SC)
Increased due to changes to allowable adjustments and the removal of
deductions which are now included as extra charges in the PCR
Risk capital chargesRisk capital charges
Minor changes to terminology of existing risk capital charges (e.g., underwriting
risk capital charge is now covered by 'Insurance risk’)
Introduction of an operational risk charge from 1 January 2024
The insurance risk and credit risk capital charges are materially reduced due to
changes in inputs to the “stressed balance sheet”
Minimum solvency
capital (MSC)
Prescribed capital
requirement (PCR)
Increased due to the inclusion of some items previously treated as a deduction
from ASC now included in the PCR, partially offset by a decrease in insurance and
credit risk capital charges
Solvency margin
Solvency margin
(= SC - PCR)
Increased margin due to differences in inputs to the PCR and SC
n/a
Adjusted solvency margin
(ASM)
Solvency margin less any licence condition
Solvency ratio
(= ASC ÷ MSC)
Solvency ratio
(= SC ÷ PCR)
Decrease to solvency ratio due to differences in inputs to PCR and MSC
n/a
Adjusted solvency ratio
(= SC ÷ PCR + Licence
condition)
Solvency ratio, including an adjustment for any licence condition

21
Minimum
solvency capital,
comprising
various risk capital
charges
Changes in solvency calculations
•Intangibles and deferred tax assets (DTA) are no longer
considered as a deduction from solvency capital and instead
are now included as part of PCR. As a result, solvency ratios
have changed considerably from the old standard, even though
this reclassification has a nil impact on solvency margins.
•An operational risk capital charge (ORCC) has been introduced
as part of PCR from 1 January 2024, which will increase from 1%
of insurance service revenue (ISR) in 2024 to 3% of ISR in 2026.
•There are also a number of other changes to the calculation of
other risk capital charges.
•Solvency calculations will be performed quarterly and
submitted to RBNZ as part of a Quarterly Insurer Return.
Solvency disclosures will also be published quarterly on the
Tower website.
1
Adjusted solvency ratio calculation
Various risk
capital charges
Distressed wind-up
capital charge =
intangibles + DTA
Prescribed
capital
requirement
Solvency capital
Deductions for
intangibles + DTA
Actual solvency
capital
Non-life solvency
standard
Interim solvency
standard
Operational risk
capital charge
2
Note 1: https://www.tower.co.nz/investor-centre/solvency-disclosures/
Note 2: From 1 January 2024
Licence condition

22
Changes to FY23 solvency margin
•The waterfall shows the changes
in reported solvency margin under
NLSS to the adjusted solvency
margin under ISS as at 30
September 2023, for Tower’s
parent entity.
•The solvency figures are the
mandatory regulatory solvency
position required until any
proposed amendments to the ISS
are issued and effective.
•Tower’s $15m licence condition
has not changed, however it is
now explicitly incorporated into
the calculation of the adjusted
solvency margin.
•The Appointed Actuary has
reviewed the solvency figures
53.8m
(1.9m)
2.9m
79.8m
(15.0m)
39.9m

23
Changes to FY23 solvency ratio
159%
139%
•The waterfall shows the
changes in reported
solvency ratio under NLSS
to the adjusted solvency
ratio under ISS as at 30
September 2023, for
Tower’s parent entity.
•The solvency figures are the
mandatory regulatory
solvency position required
until any proposed
amendments to the ISS are
issued and effective.
•The Appointed Actuary has
reviewed the solvency
figures.
(2%)
(36%)
(11%)
3%
26%

24
Solvency update at 31 December 2023
•The solvency figures are the mandatory regulatory solvency position required until any proposed amendments to the ISS are
issued and effective.
•The Appointed Actuary has reviewed the solvency figures.
Tower calculates the solvency position on a quarterly basis under the ISS. The table below shows the solvency position
for Tower’s parent entity under the NLSS at 30 September 2023, under the ISS at 30 September 2023 and under the ISS
at 31 December 2023.
$ millions
From NLSS
30 September 2023
To ISS
30 September 2023
ISS
31 December 2023
Solvency capital (actual solvency capital under NLSS)145.4283.7294.4
Adjusted prescribed capital requirement
(minimum solvency capital under NLSS)
91.6204.0193.9
Adjusted solvency margin (solvency margin under NLSS)53.879.8100.5
Adjusted solvency ratio (solvency ratio under NLSS)159%139%152%

Appendices

26
Reported consolidated balance sheetReported
$ thousands30-Sep-23
Cash and cash equivalents64,009
Investments258,798
Receivables413,826
Current tax assets12,917
Assets classified as held for sale13,697
Deferred tax assets14,971
Deferred insurance costs39,951
Right-of-use assets23,204
Property, plant and equipment 6,280
Intangible assets98,524
Total assets946,177
Payables77,032
Unearned premiums272,834
Outstanding claims240,597
Current tax liabilities198
Liabilities classified as held for sale9,765
Provisions12,823
Lease liabilities32,615
Deferred tax liabilities48
Total liabilities645,912
Net assets300,265
Reclassification between balance sheet line items
IFRS 4IFRS 17
Restated consolidated balance sheet
Restated
$ thousands
30-Sep-23
Cash and cash equivalents
64,009
Investments
258,798
Receivables
16,797
Current tax assets
12,917
Assets classified as held for sale
11,505
Reinsurance contract assets
147,236
Deferred tax assets
16,074
Right-of-use assets
23,204
Property, plant and equipment
6,280
Intangible assets
98,524
Total assets
655,344
Payables
18,378
Liability for remaining coverage
44,614
Liability for incurred claims
241,195
Current tax liabilities
198
Liabilities classified as held for sale
7,609
Provisions
12,823
Lease liabilities
32,615
Deferred tax liabilities
178
Total liabilities
357,610
Net assets
297,734
The tables to the right show how various
line items that were reported under IFRS
4 have been reclassified to new line
items under IFRS 17

27
Statutory balance sheet - from IFRS 4 to IFRS 17
Restated consolidated balance sheetReportedIFRS 17IFRS 17RestatedReportedIFRS 17IFRS 17Restated
$ thousands30-Sep-23ReclassAdjustments30-Sep-2330-Sep-22ReclassAdjustments1-Oct-22
Cash and cash equivalents64,009 - - 64,009 84,502 - - 84,502
Investments258,798 - - 258,798 258,634 - - 258,634
Receivables413,826 (397,029) - 16,797 242,089 (228,681) - 13,408
Current tax assets12,917 - - 12,917 13,069 - - 13,069
Assets classified as held for sale13,697 (3,248)1,056 11,505 20,811 (4,138) - 16,673
Reinsurance contract assets - 141,246 5,990 147,236 - 25,733 1,185 26,918
Deferred tax assets14,971 - 1,103 16,074 23,893 - (7,401)16,492
Deferred insurance costs39,951 (39,951) - - 37,819 (37,819) - -
Right-of-use assets23,204 - - 23,204 23,326 - - 23,326
Property, plant and equipment 6,280 - - 6,280 5,417 - - 5,417
Intangible assets98,524 - - 98,524 94,653 - - 94,653
Total assets946,177 (298,982)8,149 655,344 804,213 (244,905)(6,216)553,092
Payables77,032 (66,087)7,433 18,378 58,911 (44,522)6,472 20,861
Unearned premiums272,834 (272,834) - - 238,116 (238,116) - -
Outstanding claims240,597 (240,597) - - 124,531 (124,531) - -
Liability for remaining coverage - 51,656 (7,042)44,614 - 49,660 (6,317)43,343
Liability for incurred claims - 232,125 9,070 241,195 - 116,743 4,826 121,569
Current tax liabilities198 - - 198 136 - - 136
Liabilities classified as held for sale9,765 (3,245)1,089 7,609 9,258 (4,139) - 5,119
Provisions12,823 - - 12,823 11,873 - - 11,873
Lease liabilities32,615 - - 32,615 35,054 - - 35,054
Deferred tax liabilities48 - 130 178 8,806 - (8,467)339
Total liabilities645,912 (298,982)10,680 357,610 486,685 (244,905)(3,486)238,294
Net assets300,265-(2,531)297,734317,528-(2,730)314,798

28
Restated consolidated statement of comprehensive income
Restated
$ thousands
30-Sep-23
Insurance revenue
472,611
Insurance service expense
(604,851)
Net income from reinsurance contracts held
124,360
Insurance service result
(7,880)
Net investment income
14,329
Net insurance finance expense
(1,348)
Net insurance and investment result
5,101
Other income
5,727
Other operating expenses
(2,145)
Finance costs
(920)
Profit before taxation from continuing operations
7,763
Tax expense
(5,176)
Profit after taxation from continuing operations
2,587
Reported consolidated statement of comprehensive income
Reported
$ thousands
30-Sep-23
Gross written premium
511,484
Gross earned premium
470,813
Outward reinsurance premium expense
(82,398)
Net earned premium
388,415
Claims expense
(492,197)
Less: Reinsurance and other recoveries revenue
205,187
Net claims expense
(287,010)
Gross commission expense
(12,342)
Commission revenue
4,636
Net commission expense
(7,706)
Underwriting expense
(105,354)
Underwriting loss
(11,655)
Net investment income
14,329
Other income
5,727
Other operating expenses
(44)
Financing costs
(920)
Profit before tax from continuing operations
7,437
Reclassification between profit & loss line items
IFRS 4
IFRS 17
The tables to
the right show
how various line
items that were
reported under
IFRS 4 have
been
reclassified to
new line items
under IFRS 17

29
Note 1
:
This restatement is due to the Solomons and Vanuatu operations classified as discontinued operations from 30 September 2023, and not
due to the adoption of IFRS 17
Statutory profit & loss - from IFRS 4 to IFRS 17
Restated consolidated statement of comprehensive income
Reported
IFRS 17
IFRS 17
Restated
Reported
IFRS 17
IFRS 17
Discontinued
Restated
$ thousands
30-Sep-23
Reclass
Adjustments
30-Sep-23
31-Mar-23
Reclass
Adjustments
Operations
1
31-Mar-23
IFRS 4 underwriting loss
(11,655)
11,655
-
-
(16,796)
15,283
-
1,513
-
Insurance revenue
-
472,611
-
472,611
-
225,993
-
-
225,993
Insurance service expense
-
(598,791)
(6,060)
(604,851)
-
(452,017)
(2,491)
8,840
(445,668)
Net income from reinsurance contracts held
-
117,974
6,386
124,360
-
212,614
2,571
-
215,185
Insurance service result
(11,655)
3,449
326
(7,880)
(16,796)
1,873
80
10,353
(4,490)
Net investment income
14,329
-
-
14,329
6,285
-
-
(8)
6,277
Net insurance finance expense
-
(1,348)
-
(1,348)
-
(663)
-
-
(663)
Net insurance and investment result
2,674
2,101
326
5,101
(10,511)
1,210
80
10,345
1,124
Other income
5,727
-
-
5,727
2,725
-
-
(1)
2,724
Other operating expenses
(44)
(2,101)
-
(2,145)
(49)
(1,210)
-
-
(1,259)
Finance costs
(920)
-
-
(920)
(465)
-
-
3
(462)
Profit before taxation from continuing operations
7,437
-
326
7,763
(8,300)
-
80
10,347
2,127
Tax expense
(5,085)
-
(91)
(5,176)
858
-
(15)
(2,887)
(2,044)
Profit after taxation from continuing operations
2,352
-
235
2,587
(7,442)
-
65
7,460
83
Loss after taxation from discontinued operations
(3,580)
-
(29)
(3,609)
2,340
-
(13)
(7,462)
(5,135)
Loss after taxation for the year
(1,228)
-
206
(1,022)
(5,102)
-
52
(2)
(5,052)
Items that may be reclassified to profit or loss
Currency translation differences
(1,487)
-
(7)
(1,494)
(2,130)
-
-
-
(2,130)
Reclassification of the foreign currency translation reserve
544
-
-
544
544
-
-
-
544
Other comprehensive loss net of taxation
(943)
-
(7)
(950)
(1,586)
-
-
-
(1,586)
Total comprehensive loss for the year
(2,171)
-
199
(1,972)
(6,688)
-
52
(2)
(6,638)

30
Reconciliation of changes in underlying NPAT
Changes in our profit & loss from IFRS 4 to IFRS 17, for FY23 and HY23
$ million
FY23 Reported
underlying profit
IFRS 17 reclass
IFRS 17
adjustments
FY23 Restated
underlying profit
HY23 Reported
underlying profit
IFRS 17 reclass
IFRS 17
adjustments
HY23 Restated
underlying profit
Gross written premium526.8 526.8 245.0 245.0
Insurance revenue485.8 1.8 487.6 233.0 0.8 233.8
Reinsurance expense(69.5)(69.5)(32.2)(32.2)
Net insurance revenue416.3 1.8 418.1 200.9 0.8 201.7
Net claims expense - BAU(231.1)0.9 (230.2)(103.6)0.6 (103.0)
Net claims expense - large events(38.2)(38.2)(33.9)(33.9)
Large event reinsurance reinstatement(17.4)(17.4)(3.4)(3.4)
Management and sales expenses(125.7)1.8 (123.9)(65.6)0.9 (64.7)
Net commission expense(8.3)(1.8)(10.1)(5.0)(0.8)(5.8)
Net insurance service expense
(420.7)(1.8)2.7 (419.8)(211.5)(0.8)1.5 (210.8)
Insurance service result(4.3)2.7 (1.7)(10.6)1.5 (9.1)
Net investment income14.3 14.3 6.3 6.3
Net insurance finance expense - (1.3)(1.3) - (0.7)(0.7)
Other income and expenses2.3 (2.1)0.2 0.3 (1.2)(0.9)
Underlying profit before tax12.3 (0.7)11.5 (4.0)(0.4)(4.4)
Income tax expense
(4.6)0.2 (4.4)0.7 0.1 0.8
Underlying net profit/(loss) after tax (NPAT)7.6 (0.5)7.1 (3.3)(0.4)(3.7)
Canterbury impact (net of tax)(1.2)0.7 (0.5)(1.0)0.4 (0.6)
All other non-underlying costs (net of tax)(7.6)(7.6)(0.8)(0.8)
Reported loss after tax
(1.2)0.2 (1.0)(5.1) - (5.1)
BAU claims ratio
55.5%55.1%51.6%51.1%
Large events claim ratio
13.4%13.3%18.6%18.5%
Expense ratio
32.2%32.0%35.1%35.0%
Combined Operating Ratio101.1%100.4%105.3%104.5%

31
FY23 reconciliation between underlying profit after tax and reported loss after tax
Underlying and reported (loss)/profit:
•“Net insurance revenue”, net
insurance service expense” and
“underlying profit” do not have a
standardised meaning under
Generally Accepted Accounting
Practice (GAAP).Consequently, they
may not be comparable to similar
measures presented by other
reporting entities and are 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 (loss)/profit, as it excludes
large or non-recurring items that
may obscure trends in Tower’s
underlying performance, and is
useful to investors as it makes it
easier to compare Tower’s financial
performance between periods
•Tower has applied a consistent
approach to measuring which items
are excluded from underlying profit
in the current and comparative
periods
•“Reported (loss)/profit after tax” is
calculated and presented in
accordance with GAAP
(1)Non-underlying items include the net impact of Canterbury earthquake valuation changes, customer remediation provisions, regulatory and
compliance projects (such as the adoption of IFRS 17), gain on sale of operations and building, and a prior period tax adjustment
(2)Reclassification of claims handling expenses from management expenses to claims expense; and FX gains/losses from other income to
management expenses
(3)Operations sold during FY23 and held for sale at 30 September 2023 are treated as discontinued operations for statutory purposes
(4)Reclassification of reinsurance expenses to present as net income from reinsurance contracts held for statutory purposes
(5)Reclassification of reinsurance and other recoveries to present as net income from reinsurance contracts held for statutory purposes
$ million
FY23
restated
underlying
profit
Non-underlying
items (1)
Management
expense
reclasses (2)
Discontinued
operations (3)
Reclass of
reinsurance
expenses (4)
Reclass of
reinsurance &
other recovery
revenues (5)
FY23
reported
loss
Gross written premium
526.8
Insurance revenue
487.6
(5.0)
(10.0)
472.6
Reinsurance expense
(69.5)
69.5
Net insurance revenue
418.1
(5.0)
(10.0)
69.5
Net claims expense - BAU
(230.2)
(0.7)
(25.5)
(12.7)
Net claims expense - large events
(38.2)
(204.0)
Large event reinsurance reinstatement
(17.4)
17.4
Management and sales expenses
(123.9)
(6.5)
24.3
(12.9)
Net commission expense
(10.1)
10.1
Net insurance service expense
(419.8)
(7.2)
(1.2)
25.4
17.4
(219.5)
(604.9)
Net income from reinsurance contracts held
-
(8.2)
(86.9)
219.5
124.4
Insurance service result
(1.7)
(12.2)
(1.2)
7.1
(7.9)
Net investment income
14.3
14.3
Net insurance finance expense
(1.3)
(1.3)
Other income and expenses
0.2
1.3
1.2
2.7
Underlying profit before tax
11.5
(10.9)
7.1
Income tax expense
(4.4)
1.2
(1.9)
(5.2)
Profit after tax from discontinued operations
-
1.6
(5.2)
(3.6)
Underlying net profit after tax (NPAT)
7.1
(8.1)
Canterbury impact (net of tax)
(0.5)
0.5
All other non-underlying costs (net of tax)
(7.6)
7.6
Reported loss after tax
(1.0)
(1.0)

32
HY23 reconciliation between underlying loss after tax and reported loss after tax
Underlying and reported (loss)/profit:
•“Net insurance revenue”, net
insurance service expense” and
“underlying profit” do not have a
standardised meaning under
Generally Accepted Accounting
Practice (GAAP).Consequently, they
may not be comparable to similar
measures presented by other
reporting entities and are 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 (loss)/profit, as it excludes
large or non-recurring items that
may obscure trends in Tower’s
underlying performance, and is
useful to investors as it makes it
easier to compare Tower’s financial
performance between periods
•Tower has applied a consistent
approach to measuring which items
are excluded from underlying profit
in the current and comparative
periods
•“Reported (loss)/profit after tax” is
calculated and presented in
accordance with GAAP
(1)Non-underlying items include the net impact of Canterbury earthquake valuation changes, customer remediation provisions, regulatory
and compliance projects (such as the adoption of IFRS 17), gain on sale of operations and building, and a prior period tax adjustment
(2)Reclassification of claims handling expenses from management expenses to claims expense; and FX gains/losses from other income to
management expenses
(3)Operations sold during FY23 and held for sale at 31 March 2023 are treated as discontinued operations for statutory purposes
(4)Reclassification of reinsurance expenses to present as net income from reinsurance contracts held for statutory purposes
(5)Reclassification of reinsurance and other recoveries to present as net income from reinsurance contracts held for statutory purposes
$ million
HY23
restated
underlying
profit
Non-underlying
items (1)
Management
expense
reclasses (2)
Discontinued
operations (3)
Reclass of
reinsurance
expenses (4)
Reclass of
reinsurance &
other recovery
revenues (5)
HY23
reported
loss
Gross written premium
245.0
Insurance revenue
233.8
(2.5)
(5.4)
226.0
Reinsurance expense
(32.2)
32.2
Net insurance revenue
201.7
(2.5)
(5.3)
32.2
Net claims expense - BAU
(103.0)
(0.9)
(13.4)
(43.9)
Net claims expense - large events
(33.9)
(231.0)
Large event reinsurance reinstatement
(3.4)
3.4
Management and sales expenses
(64.7)
(1.2)
12.5
(6.5)
Net commission expense
(5.8)
5.0
Net insurance service expense
(210.8)
(2.1)
(0.9)
41.1
3.4
(276.4)
(445.7)
Net income from reinsurance contracts held
-
(25.6)
(35.6)
276.4
215.2
Insurance service result
(9.1)
(4.6)
(0.9)
10.2
(4.5)
Net investment income
6.3
6.3
Net insurance finance expense
(0.7)
(0.7)
Other income and expenses
(0.9)
1.0
0.9
1.0
Underlying loss before tax
(4.4)
(3.6)
10.2
Income tax expense
0.8
(0.1)
(2.8)
(2.0)
Profit after tax from discontinued operations
-
2.2
(7.4)
(5.1)
Underlying net loss after tax (NPAT)
(3.7)
(1.4)
Canterbury impact (net of tax)
(0.6)
0.6
All other non-underlying costs (net of tax)
(0.8)
0.8
Reported loss after tax
(5.1)
(5.1)

33
Disclaimer
This presentation has been prepared by Tower Limited to provide shareholders with information on Tower’s business. It
contains summary information about Tower as at 30 September 2023 and 31 December 2023, and earlier periods, which is
general in nature, and does not purport to contain all information a prospective investor should consider when evaluating an
investment. It is not an offer or invitation to buy Tower shares. Investors must rely on their own enquiries and seek appropriate
professional advice in relation to the information and statements in relation to the proposed prospects, business and
operations of Tower. The data contained in this document is for illustrative purposes only. Past performance is not a guarantee
of future performance and must not be relied on as such. The information in this presentation does not constitute financial
advice.
Forward looking statements
This document contains certain forward-looking statements. Such
statements relate to events and depend on circumstances that will occur
in the future and are subject to risks, uncertainties and assumptions.
There are a number of factors which could cause actual results and
developments to differ materially from those expressed or implied by
such forward-looking statements, including, among others: the
enactment of legislation or regulation that may impose costs or restrict
activities; the re-negotiation of contracts; fluctuations in demand and
pricing in the industry; fluctuations in exchange controls; changes in
government policy and taxation; industrial disputes; and war and
terrorism. These forward-looking statements speak only as at the date of
this document.
Disclaimer
Neither Tower nor any of its advisers or any of their respective
affiliates, related bodies corporate, directors, officers, partners,
employees and agents (other persons) makes any representation or
warranty as to the currency, accuracy, reliability or completeness of
information in this presentation. To the maximum extent permitted by
law, Tower and the other persons expressly disclaim any liability
incurred as a result of the information in this presentation being
inaccurate or incomplete in any way. The statements made in this
presentation are made only as at the date of this presentation. The
accuracy of the information in this presentation remains subject to
change without notice.