Tower reports turnaround with online services "growing exponentially"
- 21 May, 2019 07:13
Tower aims for a business "step-change" through platform investment
Reaching the end of its transformation, insurer Tower is reporting online self service is a new growth engine for the business.
Tower is implementing new insurance software from specialist EIS Group at the cost of $24 million, with the platform due for roll-out in coming weeks.
Tower told shareholders today it expected delivery of the technology would "accelerate its transformation trajectory".
Tower announced a half year profit of $11.9 million after tax, an improvement of $23.5 million, though that was helped in part by "benign" weather helping to reduce claims.
Gross written premiums increased by $8.7 million to $169.7 million.
"With the number of customers using our digital channels to engage with and purchase Tower products growing exponentially, we have proof that our confidence in user-friendly technology is well placed," chair Michael Stiassny said.
"With the upcoming launch of our new technology platform, Tower will have the final building block in place to accelerate growth."
CEO Richard Harding said the company had been been working at pace to deliver the project against aggressive timeframes with a phased implementation approach.
"With the launch of the first phase to occur in the first half of the 2019 calendar year, this approach was designed to minimise business risk and mitigate any potential negative impacts on our customers," he said.
"I am pleased to let you know that we will deliver phase one in the next few weeks, which will see us selling new business on our new system."
Development and build of this phase is complete and it is in the final stages of testing. It will be deployed through phone channels first, followed closely by digital channels.
Completion of phase one will enable Tower to sell its new simplified products to customers and is the core foundation piece of this programme.
Phase two components will occur in the second half of the 2019 calendar year and include rationalisation of products and the 12 month migration of existing customers to the new platform.
It will include a new customer self-service portal, allowing customers to manage their insurance online and new, streamlined claims management modules
"The most significant impact will be migrating our customers to our new platform and our new products over a 12 month period," Harding said.
"Moving hundreds of thousands of customers to a core set of just 12 products will deliver significant benefits to our customers and efficiencies in our business."
Harding warned, however, that a migration of that size can pose risk if not properly managed.
"Therefore, through our phased delivery approach we will increase the focus on managing and retaining our customers through the change to minimise this risk."
Costs for the programme were developing in line with previously advised amounts and there were no material changes to the estimated total cost.
Benefits should start being realised over the 2020 financial year, with a "step change" expected as Tower finalises customer migration and decommissions existing legacy systems.