Tower to return $NZ70m capital
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Tower (TWR), the general insurer that is 34% owned by Guinness Peat Group, says it will return an initial $NZ70 million ($A62.06 million) of capital to shareholders from the sale of its life insurance business.
The insurer sold its life business to Fidelity Life Assurance for about $NZ145m in cash and liabilities in May.
However, in determining what capital was available it had to take into account the New Zealand Reserve Bank's requirements for its insurance licences, including an increase in its minimum solvency margins.
In August, Tower said it had concluded talks with the central bank.
"With minimum solvency margin requirements now confirmed, it was appropriate that some capital realised from the execution of Tower's strategic review, and which was surplus to capital and business requirements, was returned to shareholders," chief executive David Hancock said in a statement.
The company remains committed to returning a total of $NZ114.5m, he said. Asset sales have released $NZ370m of capital, of which $NZ120m has already been distributed. GPG stands to get about $NZ24m from the life business sale.
Shares of Tower rose 1.1% to $NZ1.83 and have declined about 6% this year.
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