TOWER LIMITED — Annual Report 2008

Nov 20, 2008

Value & Capital Analysis Pack

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TOWER Group and Business Units - Profit & Loss
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30 Sep 08 NZ$ millions	Health & Life Policyholder	Health & Life Shareholder	General Ins	Investments	Holdings Companies	Group
Business unit operating earnings Corporate expenses Investment returns Finance costs	(13.8)	17.1 6.9	10.4 11.0	4.9 0.2	(6.8) 2.9 (8.1)	18.6 (6.8) 21.0 (8.1)
Profit Before Taxation	(13.8)	24.0	21.4	5.1	(12.0)	24.7
Tax credit/(expense)	13.8	4.5	(6.6)	(1.4)	5.5	15.8
Profit After Taxation	-	28.5	14.8	3.7	(6.5)	40.5

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TOWER Group and Business Units - Balance Sheet
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30 Sep 08 NZ$ millions	Health & Life	General Ins	Investments	Holdings Companies	Group
Fixed Interest Equity Property	84.3 1.7 9.1	230.0 3.0 9.1	3.7 0.0 0.0	37.1 2.9 0.0	355.1 7.6 18.2
Shareholder Investment Assets in excess of Policyholder Liabilities Deferred Acquisition Costs Net Operational Assets/(Liabilities)	95.1 26.4 23.9	242.1 13.9 (127.8)	3.7 9.5 10.6	40.0 0.0 13.6	380.9 49.8 (79.7)
Net Tangible Assets Backing Shareholder Capital Excess of Market Value over Net Tangible Assets – Goodwill External Debt	145.4 13.1 0.0	128.2 17.7 0.0	23.8 0.0 0.0	53.6 0.0 (87.6)	351.0 30.8 (87.6)
Total Equity Attributable to Shareholders	158.5	145.9	23.8	(34.0)	294.2

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TOWER Group and Business Units - Appraisal Value
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30 Sep 08 NZ$ millions	Health & Life	General Ins	Investments	Holdings Companies	Group
Net Worth Value of In-force business	25.0 160.6	0.0 0.0	0.0 0.0	0.0 0.0	25.0 160.6
Embedded Value Value of 1 years new business Value of Future new business	185.6 2.7 10.8	0.0 0.0 0.0	0.0 0.0 0.0	0.0 0.0 0.0	185.6 2.7 10.8
Appraisal Value (Enterprise Value) Fair Value of Net Tangible Assets External Debt	196.4 89.8 0.0	0.0 160.3 0.0	0.0 23.8 0.0	0.0 53.6 (87.6)	196.4 327.5 (87.6)
Appraisal Value	286.2	160.3	23.8	(34.0)	436.3

• An internal assessment performed by the Chief Actuary.

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TOWER Group and Business Unit - Carrying Value /
Appraisal Value
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NZ$ millions	As at 30 Sep 08	As at 30 Sep 08	As at 31 Mar 08	As at 31 Mar 08
	Carrying Value	Appraisal Value	Carrying Value	Appraisal Value
Health & Life TOWER Health & Life TOWER Medical TOWER Life (NZ) General Insurance TOWER Insurance Eliminate TOWER Life (NZ) Investment in TOWER Insurance Investment Business TOWER Asset Management TOWER Managed Funds Other TOWER Group Head Office, Holding Companies External Debt	94.5 37.7 26.3	130.0 89.8 66.4	84.2 37.3 27.3	117.3 82.6 64.7
	158.5 145.9 0.0	286.2 160.3 0.0	148.8 134.8 0.0	264.6 175.1 0.0
	145.9 5.8 18.0	160.3 5.8 18.0	134.8 6.8 15.6	175.1 6.8 15.6
	23.8 53.6 (87.6)	23.8 53.6 (87.6)	22.4 51.2 (87.2)	22.4 51.2 (87.2)
Total Capital Employed	294.2	436.3	270.0	426.1

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Life Insurance - Profit Summary
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NZ$ millions	Year ended 30 September 08	Year ended 30 September 07
Life Insurance Operating Earnings Planned Profits Experience Profit (Loss) Capitalised Loss (Recognition) Reversal	15.4 0.7 0.0	15.8 (0..3) (0.1)
Operating Earnings from Life Earnings from Health	16.1 4.5	15.4 4.8
Total Operating Earnings (Net of Tax) Net Investment Return on Shareholders Funds Discount Rate Changes	20.6 6.3 1.6	20.2 3.8 (1.3)
Profit After Taxation from Continuing Operations	28.5	22.7

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Life Insurance - Change in Embedded Value
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NZ$ millions	TOWER Life (NZ)	TOWER Health & Life
Embedded Value as at 30 September 2007 Expected Increase in Value of In-Force Earnings on Net Worth Experience: - Investment Earnings - Other Changes in Assumptions: - Discount Rate - Investment Earnings - Other Value from New Business Miscellaneous: - Transfers/Distributions - Other	66.4 5.6 0.2 (0.3) 1.6 0.0 3.3 0.1 0.3 (13.9) 0.3	105.8 11.3 0.0 0.0 0.1 0.0 (1.1) 9.2 (0.4) (2.9) 0.0
Embedded Value as at 30 September 2008	63.6	122.0

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Life Insurance - Change in Value of One Year’s
New Business
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NZ$ millions	TOWER Life (NZ)	TOWER Health & Life
Value of One Year’s New Business as at 30 September 2007 Change in One Year’s Volumes and Mix of Business Changes in Assumptions: - Discount Rate - Investment Earnings - Other	1.5 (0.7) 0.0 0.0 (0.1)	2.1 0.9 0.0 0.0 (1.0)
Value of One Year’s New Business as at 30 September 2008	0.7	2.0

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Life Insurance - Embedded Value and Value of One
Year’s New Business
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Embedded Value and Value of One Year’s New Business

NZ$ millions	30 Sep 08	30 Sep 08	31 Mar 08	31 Mar 08
	TOWER Life (NZ)	TOWER Health & Life	TOWER Life (NZ)	TOWER Health & Life
Net Worth Value of In-force Business	17.6 46.0	7.4 114.6	12.6 46.9	6.7 102.1
Embedded Value Value of One Year’s New Business	63.6 0.7	122.0 2.0	59.5 1.3	108.8 2.1

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