AM Best Affirms Credit Ratings of Tower Limited

SINGAPORE--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Tower Limited (Tower) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.

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 (ERM).

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 strongest level at fiscal year-end 2025 (30 September 2025). AM Best expects Tower’s risk-adjusted capitalisation to remain at least at the very strong level over the medium term, supported by retention of earnings. In addition, Tower’s regulatory solvency capital is expected to maintain a healthy capital buffer above the minimum requirements. Other supporting factors include strong financial flexibility, a prudent reinsurance programme and a conservative investment strategy.

AM Best assesses Tower’s operating performance as adequate. The company has a track record of adequate operating performance, albeit with a moderate level of volatility due to catastrophe events. Tower’s operating earnings are driven predominantly by technical performance coupled with investment income. In FY 2025, the company reported a return-on-equity ratio of 23.5% and a net/net combined ratio of 81.4%. 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-sized non-life insurer that operates predominantly in New Zealand, with some operations in the Pacific Islands. Tower’s core product offerings include domestic home and motor insurance, typically distributed through direct channels and partnerships. Whilst the market share in the overall non-life market is modest at approximately 5%, the company has a solid market position in its core insurance segments in New Zealand.

AM Best assesses Tower’s ERM as appropriate. Regulatory compliance remains a key focus area in view of the recent regulatory developments in New Zealand. A recent investigation by the Financial Market Authority, following a self-report by the company, revealed historical misleading representations that resulted in a penalty payment. The company is working actively on customer remediation and strengthening its internal controls.

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 the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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