TOWER LIMITED — Interim / Quarterly Report 2015

May 25, 2015

Leading light Half year results to 31 March 2015 26 May 2015

Michael Stiassny Chairman “Deliver attractive shareholder returns by being the leading light in New Zealand and Pacific general insurance.”

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Delivering shareholder returns General Insurance strategy underpinning attractive returns in New Zealand and Pacific Rim Significant investment in digital and direct platforms to leverage growth opportunities Further progress on Canterbury claims supported by reserve strengthening and extended reinsurance cover First half dividend 8.5 cps, up 30.8% On market buy back of up to $34 million to begin following results TOWER has further surplus capital to support shareholder returns and growth

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David Hancock
Chief Executive Officer
What we are covering today
+
Performance highlights
+ General insurance
and operations
+
Financial performance
and risk management
+
Strategy and outlook
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Performance highlights

General Insurance Underlying profit up strongly supported by premium rate increases, solid Pacific growth and a benign claims environment Significant investment in digital and direct distribution platforms to build contemporary service capabilities and growth options Pacific growth continues, strong revenue and earnings growth, investment in online presence and broadened capabilities

Significant progress on operational strategy

Additional provisions for Canterbury earthquake claims to reflect higher costs; further significant progress on claims resolution

Build on alliance portfolio and drive policy growth through digital platforms, including Trade Me new Strong capital management – reinsurance protection, further capital returns, increased dividends and strong solvency

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Financial highlights

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General Insurance HY15 HY14 Movement %
Gross Written Premium (GWP) ($m) 145.9 139.2 4.9%
($m) 19.8 13.5 46.1%
Underlying underwriting profit
Underlying NPAT [1] ($m) 17.9 13.1 36.4%
New Zealand underlying NPAT ($m) 12.8 9.8 30.1%
($m) 5.1 2.7 86.9%
Pacific underlying NPAT [2]
Underlying claims ratio (%) 44.5% 50.4%
Underlying combined ratio (%) 84.2% 88.3%
Group
($m) 17.5 13.8 27.2%
Underlying net profit after tax
($m) (4.9) 13.1
Reported net profit after tax
Underlying EPS [3] (c) 10.0 5.0 102.6%
DPS (c) 8.5 6.5 30.8%
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1. Underlying NPAT excludes Canterbury impacts and discontinued businesses

2. HY14 includes $0.5m Australia NPAT

3. Profit attributable to shareholders from ongoing operations only and excludes Canterbury impacts

Strong underlying growth

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• • TOWER Group underlying profit of $17.5m, up 27.2%
• • Canterbury provisions increased $22.6m after tax
• • Reported loss after tax $4.9m
• • General Insurance underlying profit up 36.4% to $17.9 million
• • NZ underlying profit up 30.1%

• benign claims environment with GWP growth and cost control

• • Pacific underlying profit up 86.9.%

• strong policy and premium growth and reduced loss ratios

• • Half year dividend 8.5 cents per share,

• up 30.8%

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Performance
indicators
GROSS WRITTEN Gross written premium ($m) NET EARNED Net earned premium ($m)
PREMIUM PREMIUM
Reinsurance ratio (% of GWP) Underlying expense ratio (%)
160
160
20
17.8%
16.9%
16.2% 15.5%
120 17.6%
16.6% 16
120
15.5%
12
80
11.6%
80
8 41.3% 39.7%
39.1% 38.9% 37.9%
40
40 37.6% 38.5% 36.9% 40.4%
4
0
0
0
Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15
UNDERWRITING CLAIMS
Underwriting profit (excluding Claims excluding Canterbury ($m)
PROFIT Canterbury, Australia and FX) ($m)
Claims ratio excluding Canterbury
Underlying combined ratio (%) and Australia revaluation (%)
20 150 8 0
16
6 0
90.3% 90.9% 88.3%
84.2%
12
91.6%
82.6% 83.4% 85.9% 4 0 52.1% 50.4%
49.0%
44.5%
8
51.3%
49.0%
45.0% 44.9%
2 0
4
7 0 0 0
Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15
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Solid GWP
growth, lower
claims
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• GWP and NEP continue to grow driven by Pacific policy growth and premium increases in New Zealand

• Reinsurance cost increased in the half due to deliberate strategy to manage risk for better returns

• • Claims ratio improved – absence of large claim events

• Underlying combined and claims ratios improved supported by better weather

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A New Zealand
insurer
and Pacific
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Platform for growth

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As at 31 March 2015: As at 31 March 2015:
487,718 270,515
2
Inforce policies Clients
New Zealand 86% New Zealand 85%
Pacific Islands 14% Pacific Islands 15%
New Zealand - Direct 66%
New Zealand - Alliances 34%
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HY15: HY15:
$ $
145.9m 17.9m
1
UNDERLYING
GWP NPAT
New Zealand 80% New Zealand 72%
Pacific Islands 20% Pacific Islands 28%
1. Excludes impact of the Canterbury earthquakes and the discontinuation of previous businesses.
2. One customer can be comprised of multiple policies
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David Hancock Chief Executive Officer + Performance highlights + General insurance and operations + Financial performance and risk management + Strategy and outlook

9

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Execution on
priorities
The
Vision
leading light
in New Zealand
general insurance
+
Focus for HY15:
-
alliances and digital platforms
Customer
-
satisfaction
transforming customer interactions
Staff Net promoter score
-
growth in Pacific Rim markets
Strategic pillars
engagement
-
AonHewitt survey unlocking brand potential
Financial -
Canterbury progress
performance
Capital
Value-added efficiencies
services
Key enablers
Direct + alliance
Product
channels
bundling
Data
insights
Outcomes Shareholder
Returns
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Strategic priorities

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Alliance distribution channel

New markets and customers

• Alliance partners bring new business through new marketing channels

• Strong partnerships with major banks, planner networks and specialist brokers

• Significant investment in digital capabilities and customer service to support alliance opportunities

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Transforming our customer interactions

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Better service; creating efficiencies

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• • Reconfiguration of sales and services teams

• aligning people structures to our customers

• • creating efficiencies and improved customer experience
• • Digital platform to transform the customer experience

• a world-class integrated sales, self service and claims lodgement platform

• transform the way we do business

• a scalable platform for new alliance partners

• • Acceleration of core platform upgrade - completion now expected mid 2016

• positive feedback from customers

• • significant cost savings when legacy system decommissioned

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Transforming our customer interactions

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20
Implementation
6
issues affected short-
term service levels
Nov 13 As at 20 May 2015
Trend line
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Nov 13
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As at 20 May 2015
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Customer satisfaction

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• Net Promoter Score (NPS) monitors the quality of our service, interactions and customer satisfaction

• NPS can be a volatile measure

• NPS supports sales and reduces lapse rates

• • Positive trend over 18 months reflects focus on customer service
• • During HY15 sales and service teams were combined to transform service and efficiency

• Implementation issues affected short-term service levels and NPS

Methodology Scores are classified as follows Detractors Passives Promoters Customers are asked: “On a scale of 0 to 10, how likely would you be to recommend TOWER to family, friends or Promoters Detractors Net Promoter Score colleagues?”

• However, measures to improve service performance including increased staff numbers and training have seen NPS recover

• • Targeting NPS of 35 by 2015 financial year-end

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Leadership in Pacific Rim markets

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HY15 GWP by territory
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Papua New Guinea $10.0m
Solomon Islands $1.6m
Fiji $8.2m
NPI (Tonga, Samoa, American Samoa) $6.9m
Cook Islands $1.8m
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Strong growth

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• A leading insurer in the Pacific with 100 year history – attractive margins and growth

• Underlying NPAT up 86.9% to $5.1m

• Pacific highlights

• GWP growth of 14% (NZ$)

• strong policy growth 7.7%

• loss ratio 28.3% down from 42.3%

• currency supported NZ$ earnings

• • Fiji, PNG and NPI strong
• • NPS at 47, high staff engagement and customer service

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Investing for growth in the Pacific Rim

Pacific opportunity

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• Long operating history and strong brands in the region

• • Upgrade underway of core insurance platform across the Pacific

• New websites launched in Fiji, Papua New Guinea and the Solomon Islands

• • New alliance partnerships implemented in Papua New Guinea with early sales promising
• • New product launches in Tonga and Samoa through new and existing business partners

• Preparation for Vanuatu launch

• • Scoping of further new markets

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Unlocking brand potential through innovation

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2014
INNOVATION
--- OF ---
THE YEAR
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• A trusted New Zealand and Pacific insurer

• Revised brand strategy to be launched shortly

• Text messages sent to customers regarding Cyclone Pam, example of TOWER looking out for its customers

• • Recognised innovator

• Launch of full replacement for fire benefit in October 2014

• SmartDriver awarded; new version of app launched May 2015

• • Successful business-as-usual campaigns

• Win a year’s free insurance drives inbound call inquiries

• Full replacement for fire campaign resulted in significant improvement in awareness and trust for TOWER

• • Fully responsive website launched in May

• Easier for customers to get information about TOWER

Award winning innovation

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Canterbury progress

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CLAIMS SETTLED ON TRACK OUTSTANDING
AND CLOSED TO EXCEED PROPERTIES
94% 95% 914
As at 30 April 2015 SETTLEMENT AND CLOSURE As at 30 April 2015
OF EARTHQUAKE CLAIMS BY
THE END OF 2015
Canterbury progress (all claims)
Cash settled 85%
Work completed 9%
Pre-construction 3%
In construction 1%
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Further
progress
on claims
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• • The resolution of Canterbury claims remains a key operational priority
• • Dedicated team committed to providing certainty for customers and shareholders

• New claims declining: 328 new claims received in HY15, significantly less than in HY14

• • TOWER has settled and closed 94% (by volume) and 84% (by value) of all Canterbury earthquake claims

• Well ahead of industry average

• On track to exceed 95% settlement and closure of earthquake claims by end of calendar year 2015

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Brett Wilson Chief Financial Officer

+ Performance highlights + General insurance and operations + Financial performance and risk management + Strategy and outlook

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Provisions for Canterbury

Background

Provision increase

• • Four separate events make up the Canterbury earthquakes

• Most recent actuarial review projected that costs attributed to TOWER would be $35.5 million (before tax) higher than previously estimated due to: - Increased allocation of claims into February 2011 event

• • Reinsurance cover for each event increased from $290 million in September 2010; to $325 million in February 2011 and June 2011; to $500 million in December 2011
• • Reinsurance cover now at $682 million

• February 2011 event caused the greatest damage, with claims exceeding its original reinsurance limit

• Increased costs associated with multi-unit dwelling claims

• Claims associated with the other earthquake events remain within reinsurance limits

• Industry-wide increase in repair and rebuild costs and time delays affecting outstanding claims

• • Deloitte undertakes quarterly actuarial reviews of the Canterbury earthquake claims provision

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Certainty
for Canterbury
Earthquake allocation
Feb 11 event Total Canterbury
($m) Mar15 Sep14 Mar15 Sep14
Customer Claims 404.3 368.8 748.3 706.9
Reinsurance recoveries [1] 335.2 331.1 662.6 652.6
Net expense to TOWER 69.1 37.7 85.7 54.3
Net provision increase 31.4 31.4
(8.8) (8.8)
Tax benefit
Net im act on HY15 P&L 22.6 22.6
p
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1. Includes reinsurance benefit from Adverse Development Cover

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TOWER Group Profit summary

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$ million HY15 HY14 Movement $ Movement %
General Insurance 17.9 13.1 4.8 36.4%
Life [1] - 3.7 (3.7) (100.0%)
17.9 16.8 1.1 6.5%
Business unit net profit after tax
Corporate financing costs and investment
0.7 (1.6) 2.3 (147.0%)
income
Cor orate ex enses (1.1) (1.4) 0.4 (24.3%)
p p
Profit excluding the impact of discount rate
17.5 13.8 3.7 27.2%
and abnormal items
0.2 - 0.2 na
Profit on disposal of subsidiaries
Impact of Canterbury earthquakes (22.6) - (22.6) na
Net im act of abnormal items - (0.7) 0.7 (100.0%)
p
Re orted net (4.9) 13.1 (17.9) (137.3%)
p profit after tax [2]
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1. Life includes profits from significant part of life business sold in FY13, and the remaining TLNZ sold in FY14

2. A number of items are classified as discontinued operations in the Group financial statements

Strong underlying results

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• General insurance underlying profit up strongly

• Underlying EPS of 10.0 cps for the half year; starting to reflect the new operating structure

• Reduced large claim events

• Provisions for Canterbury claim costs increased $22.6 million after-tax

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Underlying performance General Insurance

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$ million HY15 HY14 Movement $ Movement %
Gross earned premiums 150.4 139.1 11.3 8.2
Reinsurance (25.7) (23.5) (2.2) 9.4
Net premiums 124.7 115.6 9.1 7.9
Net incurred claims (55.5) (53.4) (2.1) 3.9
-
Large claim events [1] (4.8) 4.8 (100.0)
Mana ement and sales ex enses (49.5) (43.9) (5.5) 12.6
g p
19.8 13.5 6.2 46.1
Underwriting profit
Investment revenue 6.3 5.7 0.6 10.4
26.0 19.2 6.8 35.5
Underlying Profit before tax
Income tax expense (8.2) (6.1) (2.1) 33.6
17.9 13.1 4.8 36.4
Underlying Profit after tax
Impact of Canterbury earthquakes [2] (22.6) (0.1) (22.5)
-
Revaluation of Australia liabilities and FX loss [3] (1.2) 1.2
Proft (loss) after tax (4.7) 11.8 (16.5)
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1. Large claim events are those greater than $1m. 2014 large claim events were due to the storms within New Zealand.

2. In the Group financial statements the impacts of the Canterbury earthquakes are accounted for as part of Claims expense and the tax impact thereon, and include both an increase in the provision for claims and actual claims expense, plus an amount associated with reinsurance.

3. 21 3. In the Group financial statements the revaluation and FX impact of Australia liabilities are accounted for as part of (loss)/profit from discontinued operations.

Net premiums growing

• Reinsurance costs stabilised allowing for net premium growth

• • No large claim events
• • We continue to invest for future growth, particularly in IT, people and performance
• • Strong investment returns
• • Gross earned premiums have grown strongly

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Strong Balance sheet

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$ million HY15 HY14 Movement $m
Cash & call deposits 152.3 286.6 (134.3)
Investment assets 215.7 809.6 (593.9)
Deferred acquisition costs 19.9 18.4 1.5
Intangible assets 42.7 32.3 10.4
Other o erational assets/(liabilities) [1] 296.6 398.4 (101.8)
p
Total assets 727.2 1,545.4 (818.2)
Policy liabilities & insurance provisions (357.7) (1,077.0) 719.3
External debt - (83.2) 83.2
Other o erational (liabilities)/assets [1] (63.1) (57.5) (5.6)
p
Total liabilities (420.8) (1,217.7) 796.9
Total e uit 306.4 327.6 (21.2)
q y
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Well
capitalised
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• • Simplification of corporate structure to realise value for shareholders and focus on general insurance
• • Debt free with strong cash balances
• • Balance sheet strength provides ability to manage risk, invest for growth and maximise returns to shareholders
• • Increased reinsurance cover protects balance sheet

• A number of assets or liabilities of disposed groups classified as held for sale in the financial statements.

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Capital and solvency – General Insurance

Strong solvency

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• • TOWER holds significant capital above solvency minimums required by the Reserve Bank of New Zealand. As part of its risk management programme TOWER has arranged Adverse Development Cover for Canterbury to reduce uncertainty in relation to the February 2011 event.

• TOWER has a long term target of retaining within its licensed General Insurance entity 175% of the minimum solvency capital (MSC) required under the Insurance (Prudential Supervision) Act 2010.

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SOLVENCY SOLVENCY
CURRENT POSITION BASED ON 175% TARGET
Long term
$51m $48m
surplus
General
Insurance $50m $53m
Equity
$181m
$71m $71m
$9m $9m
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Capital above regulatory minimum Miniumum solvency margin Minimum solvency capital Deductions

Surplus above long term target Target margin Minimum solvency capital Deductions

GENERAL INSURANCE CURRENTLY HOLDS:

$ 51m

$ or 48m

Surplus above target based on long term policy

Current solvency position above regulatory minimum

PLUS CORPORATE CURRENTLY HOLDS:

$ 63m

Cash held at Corporate level. Before proposed on-market buy back of up to $34 million and interim dividend payout of $14.9 million.

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Capital management for shareholder returns

Maximise shareholder returns

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Achievements

Moving forward

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• • Total Shareholder Return remained attractive in first half
• • TOWER remains highly solvent with capital above minimum requirements at the business and corporate level
• • First Half 2015 Dividend 8.5 cps, up 30.8%
• • Increase in provisions increases certainty around Canterbury
• • Capital management remains a priority and shareholder returns a key strategic outcome
• • Continue to utilise reinsurance to manage risk and protect capital for the benefit of shareholders
• • On-market share buyback to return further capital of up to $34 million to shareholders
• • Full year dividend pay-out ratio to be maintained at 90-100% of underlying NPAT

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David Hancock Chief Executive Officer

+ Performance highlights + General insurance and operations + Financial performance and risk management + Strategy and outlook

25

Strategic scorecard

Staff engagement and efficiency Significant investment in systems and training Leadership in Pacific markets Pacific NPAT up 86.9%

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Good progress

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Management of risk and capital Increased reinsurance, dividends up 30.8% and $34 million capital return Financial performance General Insurance Underlying NPAT up 36%

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Customer focus to unlock brand potential Investment in digital capability and training

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Industry consolidation opportunity New alliance opportunities

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Strategic priorities

Implementing growth plan

	Strategictheme Forwardactions Unlocking brand potential Investment in staf, systems and processes Service and sales culture: NPS 35 by FY15 Product innovation and next phase of brand campaign Extend onlinepresence Alliance growth opportunity Signifcantly enhanced operational capability Ofer trusted alternative to the majors Diferentiate our ofer through innovation New initiatives via digitalplatforms Leadership in Pacifc markets Grow in attractive established Pacifc Rim markets Consolidate and grow our new alliances in the region Prepare to enter new regions

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Outlook

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Maximise
shareholder
returns
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Industry

TOWER

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• • Reinsurance cost growth and premium growth easing but industry margins stable
• • New competition. Increased media spending
• • Improved weather however previous large claim events increased industry costs
• • Regulatory environment provides challenges and increased industry costs
• • Canterbury rebuild cost increases and time delays lifting industry costs
• • Strong preference for digital channels in place of traditional channels
• • Industry consolidation providing opportunities for shareholder value to be recognised and enhanced
• • Grow New Zealand GWP, focus on customer service and cost control
• • Pursue further growth in exciting Pacific Rim markets
• • Enhance operating platform and digital capabilities to support growth
• • Achieve 95% completion on Canterbury rebuild by end of 2015
• • Maintain strong solvency, pay healthy dividends and where possible return surplus capital
• • Buyback of up to $34 million to begin after results announced

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Thank you
Questions
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Appendix

+ NZ Performance + General insurance + Balance Sheet detail + TOWER history

New Zealand performance

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HY15 CLOSING INFORCE
GWP BY PRODUCT
Home 39%
Motor 26%
Contents 19%
Other 16%
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HY15 CLOSING INFORCE NEW ZEALAND TOTAL
GWP BY CHANNEL GWP MARKET SHARE 2015
Direct 61% IAG / Lumley 47.2%
Finance 35% Vero / AA 24.3%
Fintel 4% QBE (NZ) 6.1%
TOWER 4.7%
FMG 3.9%
Other 13.9%
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TOWER’S SHARE IN
PERSONAL LINES
House 10.8%
Contents 9.8%
Motor 6.3%
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Market share data from ICNZ estimates to 31 December 2015. Source: ICNZ December 2015 – yearly statistics

31

Underlying performance General Insurance

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$ million Mar15 Sep14 Mar14 Sep13 Mar13 Sep12 Mar12 Sep11 Mar11
Gross earned premiums 150.4 146.0 139.1 136.4 130.8 125.0 113.9 106.2 102.1
Reinsurance (25.7) (24.5) (23.5) (24.4) (23.5) (21.2) (20.0) (13.3) (10.2)
Net premiums 124.7 121.5 115.6 112.0 107.3 103.8 93.9 92.9 91.9
Net incurred claims [1] (55.5) (52.7) (53.4) (48.7) (52.6) (46.4) (44.9) (41.7) (44.6)
Large claim events [2] - (9.6) (4.8) (6.2) (3.3) (0.2) (1.1) - -
Mana ement and sales ex enses (49.5) (49.0) (43.9) (41.3) (41.7) (40.0) (38.8) (35.0) (35.9)
g p
19.8 10.2 13.5 15.7 9.7 17.2 9.1 16.2 11.4
Underwriting profit
Investment revenue 6.3 5.8 5.7 3.9 4.2 7.9 4.5 7.5 4.0
26 16.0 19.2 19.6 13.9 25.1 13.6 23.7 15.4
Underlying Profit before tax
Income tax expense (8.2) (4.0) (6.1) (6.5) (8.0) (6.9) (5.0) (9.0) (5.4)
Underlying Profit (loss) after tax before
impact of Canterbury earthquakes and 17.9 12.0 13.1 13.1 5.9 18.3 8.6 14.7 10.0
revaluation of Australian liabilities
-
Impact of Canterbury earthquakes [3] (22.6) (0.1) (0.5) (14.7) (10.4) -3.2 (16.8) (5.4)
- - - - -
Revaluation of Australia liabilities and FX loss [3] 0.5 (1.2) (1.1) (6.0)
Proft (loss) after tax [4] (4.7) 12.5 11.8 11.5 (14.8) 7.8 5.4 (2.1) 4.6
Underlying ratios Mar15 Sep14 Mar14 Sep13 Mar13 Sep12 Mar12 Sep11 Mar11
Combined ratio 84.2% 91.6% 88.3% 85.9% 91.0% 83.4% 90.3% 82.6% 87.6%
Claims ratio 44.5% 51.3% 50.4% 49.0% 52.1% 44.9% 49.0% 45.0% 48.5%
Expense ratio 39.7% 40.4% 37.9% 36.9% 38.9% 38.5% 41.3% 37.6% 39.1%
Net incurred claims [1] (55.5) (52.7) (53.4) (48.7) (52.6) (46.4) (44.9) (41.7) (44.6)
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1. Net incurred claims includes $1.8m of suspected arson fires in Cook Islands in the March 2014 period. 2. Claims events > $1m

2. The impacts of the Canterbury earthquakes and the discontinuation of the Australian business are classified differently in the Group financial statements 4. Excludes profit for the part year and loss on sale of TLNZ

32

Adverse Development Cover reduces uncertainty

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60
40
30
+
$50m of coverage, shared
+
87.5% Reinsurer
+
12.5% TOWER
0
$388m $438m $458m
Additional cost of February 2011 earthquake ($m)
Additional cost to TOWER ($m)
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• • TOWER arranged an Adverse Development Cover (ADC) for Canterbury in respect of February 2011 event
• • Cover against continued cost increases witnessed by the industry
• • September provision level of $358 million for the February event used as base level of cover

• first $30m of additional losses continue to be borne by TOWER

• subsequent $50m of losses to be shared with reinsurer (87.5% to reinsurer, 12.5% to TOWER)

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FEBRUARY 2011
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• $358m – provision as at 30 September

• • $388m – level that ADC enters coverage
• • $393m – provision level as at 31 March
• • $438m – end of ADC coverage

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Reported profit General Insurance

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$ million Mar15 Sep14 Mar14 Sep13 Mar13 Sep12 Mar12
Gross earned premiums 150.4 146.0 139.1 136.3 130.8 125.0 113.9
Reinsurance (25.7) (24.5) (23.5) (24.4) (23.5) (21.2) (20.0)
Catastrophe reinsurance reinstatement - (0.2) - (0.7) - - -
Net premiums 124.7 121.3 115.6 111.2 107.3 103.8 93.9
Net incurred claims (55.5) (52.7) (53.4) (49.8) (58.6) (46.4) (44.9)
-
Large claim events [1] (9.6) (4.8) (6.2) (3.3) (0.2) (1.1)
Impact of Canterbury Earthquakes (31.4) 0.1 (0.1) - (20.4) (14.5) (4.4)
Management and sales expenses [2] (49.5) (49.1) (45.8) (41.3) (41.7) (40.0) (38.8)
(11.6) 10.1 11.5 13.9 (16.6) 2.7 4.7
Underwriting profit
Investment Income 6.3 5.7 5.7 3.9 4.2 7.9 4.5
(5.3) 15.8 17.2 17.8 (12.4) 10.6 9.2
Profit before tax
Income tax expense 0.6 (3.3) (5.4) (6.2) (2.5) (2.8) (3.8)
Proft/(Loss) after tax [3] (4.7) 12.5 11.8 11.5 (14.8) 7.8 5.4
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1. Claims events > $1m

1. Management and sales expenses includes $1.9 million of foreign exchange losses relating to release of Australian liabilities in the March 2014 period. 3. Excludes profit for the part year and loss on sale of TLNZ

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Group balance sheet

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As at 30 March 2015
General
$ millions Corporate Total Group
Insurance
Cash & call deposits 89.6 62.7 152.3
-
Total investment assets 215.7 215.7
Deferred acquisition costs 19.9 - 19.9
-
Intangible assets 42.7 42.7
Other o erational assets/(liabilities) 271.5 25.0 296.6
p
Total assets 596.8 130.5 727.2
-
Policy liabilities & insurance provisions (357.7) (357.7)
Other operational (liabilities)/assets (57.7) (5.4) (63.1)
Total liabilities (415.5) (5.4) (420.8)
Total e uit 181.3 125.1 306.4
q y
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35

New operating model Implemented over two years

Company transformed

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• November 2012 April 2013

• • • Sale of TOWER Sale of TOWER Medical Insurance Managed Funds Limited to nibNZ Limited to Fisher Limited Funds Management Limited

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August 2013
+
Sale of majority of
Life business to
Fidelity Life Assurance
Company Limited
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August 2014 Renewed General Insurance + Sale of remaining focus Life business to Foundation Life (NZ) Holdings Limited

• Divestment of Health, Investments and Life insurances businesses

• Sell down by major shareholder enhanced presence of major New Zealand institutions on register

• Now a focused New Zealand and Pacific general insurer with a strong local brand

• Smaller board; new CEO and growth strategy; reduced corporate costs

• Significant returns of capital and increased dividends in line with policy of 90-100% payout

• Shareholder buy back to enhance register efficiency

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36

Leading light

This presentation has been prepared by TOWER Limited to provide shareholders with information on TOWER’s business. This document is part of, and should be read in conjunction with an oral briefing to be given by TOWER. A copy of this webcast of the briefing is available at http://www.tower.co.nz/investor-centre/

It contains summary information about TOWER as at 31 March 2015, which is general in nature, and does not purport to contain all information a prospective investor should consider when evaluating an investment. It is not an offer or invitation to buy TOWER shares.

Investors must rely on their own enquiries and seek appropriate professional advice in relation to the information and statements in relation to the proposed prospects, business and operations of TOWER. The data contained in this document is for illustrative purposes only. Past performance is not a guarantee of future performance and must not be relied on as such. The information in this presentation does not constitute financial advice.

Forward looking statements

This document contains certain forward-looking statements. Such statements relate to events and depend on circumstances that will occur in the future and are subject to risks, uncertainties and assumptions. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements, including, among others: the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts; fluctuations in demand and pricing in the industry; fluctuations in exchange controls; changes in government policy and taxation; industrial disputes; and war and terrorism. These forward-looking statements speak only as at the date of this document. Solvency estimates contained herein are yet to be reviewed by the Reserve Bank of New Zealand.

Disclaimer

Neither TOWER nor any of its advisers or any of their respective affiliates, related bodies corporate, directors, officers, partners, employees and agents (other persons) makes any representation or warranty as to the currency, accuracy, reliability or completeness of information in this presentation.

To the maximum extent permitted by law, TOWER and the other persons expressly disclaim any liability incurred as a result of the information in this Presentation being inaccurate or incomplete in any way.

The statements made in this presentation are made only as at the date of this presentation. The accuracy of the information in this presentation remains subject to change without notice.

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