Sharechat Logo

Tower's ratings affirmed

By Phil Boeyen, ShareChat Business News Editor

Tuesday 17th July 2001

Text too small?
Ratings agency Standard & Poor's has affirmed Tower Insurance's (NZSE: TWR) counterparty credit and insurer financial strength ratings.

The company's life insurance subsidiaries in both Australia and New Zealand have kept their 'A'ratings while the overall group, together with its financial services business and Tower Holdings Australia, have been affirmed at 'BBB/A-2'.

The outlook on all ratings is stable.

S&P says the 'A' ratings on Tower's core operating subsidiaries reflects the group's superior business position in the New Zealand market and continued efforts to further build its profile in Australia.

"Australian operations now contribute more than two-thirds of the group's revenue, with growth in funds under management being significantly aided by acquisitions in recent years," says the agency.

"In its home market of New Zealand, Tower remains one of the leading funds management, insurance, and trustee service providers, holding the number one position in retail funds under management."

"In the larger and higher growth Australian market, Tower continues to build its market presence, as demonstrated by the acquisition of Bridges Financial Services Group Pty Ltd, which included a significant master trust."

However S&P also points out that premium and funds under management growth - excluding growth through acquisition - has been moderate in the past year, due largely to the effects of losing the Australian equity management team at the beginning of 2000.

Standard & Poor's says the stable rating outlook reflects its expectation that Tower's earnings will continue to grow based on increasing revenue and synergies expected from greater scale through the acquisitions.

"Tower's key challenges are to be able to leverage off its distribution network while restoring confidence in the independent financial advisors network, which is required to enable the group to generate good new business volumes."

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Tower to return 'initial' $70M of capital from sale of life business
Tower shares fall to 2-month low as licensing requirements may weigh on capital returns
Tower's licensing talks with RBNZ may push up minimum solvency requirements
Tower names Hancock as new chief executive, replacing Flannagan
Tower posts first-half profit as asset sales reap gains of $51.4 mln
Fidelity Life acquires most of Tower's life insurance business
Flannagan to leave Tower after strategic review, asset sales
Tower FY profit jumps 67%, to return $120M to shareholders; shares jump
Tower sells medical insurance unit to nib for $102M
Stiassny joins Tower board as questions linger over strategy