Tower unable to find buyer for remainder of life policies
General insurer Tower is to keep the life insurance policies that Fidelity Life didn't buy last year.
Monday, January 6th 2014, 8:12AM
The company says that it has talked to a number of interested parties about buying the policies but has decided that "greater shareholder value would be realised by retaining the business."
The Tower Life business consists of 50,000 policies made up of participating and non-participating life insurance policies, annuities and unit linked insurance policies. Policy and shareholder assets are managed under Investment Management Agreements operated by a third party.
“TOWER believes there are a number of opportunities to continue to improve the business performance of the retained life business, and for a release of capital over time,” chief executive David Hancock said.
Over the past financial year Tower has sold three businesses realising a total of $370 million, and in doing so has made a significant cash return to shareholders. In addition to the $120 million returned to shareholders in April 2013, a further $70 million is planned to be paid in January 2014 through an off market voluntary share buy back (subject to a number of conditions). The buy back Offer to shareholders closes on January 23.
Hancock said TOWER’s focus remained on ensuring shareholders benefitted from the company’s proven ability to maintain an efficient capital structure while delivering strong returns. “We will continue to look to release capital to shareholders as and when is appropriate,” he said.
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