AM Best Affirms Credit Ratings of Tower Limited
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Tower Limited (
The ratings reflect Tower’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Tower’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which was at the very strong level at fiscal year-end 2023 (
Tower’s operating performance is assessed as adequate, demonstrated by a five-year weighted average return-on-equity (ROE) ratio of 4.2% (FY 2019-2023). Over this period, operating earnings were driven largely by technical performance coupled with modest investment income. Tower reported an ROE ratio of -0.4% and a net combined ratio of 103.2% in FY2023, mainly due to two large weather events, the Auckland Anniversary Weekend floods and Cyclone Gabrielle. The company’s expense ratio, which stood at approximately 29% in FY2023, is expected to decrease over the medium term as the company grows its premium base and improves efficiency through IT transformation. AM Best expects Tower to report positive underwriting and operating results over the medium term, supported by appropriate risk selection, pricing and positive investment returns.
Tower is a medium-size non-life insurer that operates predominantly in
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in
Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Senior Financial Analyst
+65 6303 5025
ken.lau@ambest.com
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Yi Ding
Senior Financial Analyst
+65 6303 5021
yi.ding@ambest.com
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
Source: AM Best
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