Insurer Tower proposes 108 job cuts, as part of cost-saving proposal

Friday, 29 May 2020

Tower chief executive Richard Harding says all customers will be refunded part of the car insurance premiums they paid during the level 3 and 4 lockdowns.

Tower Insurance is proposing 108 redundancies, as part of a wider plan to save $7.2 million a year.

The insurance company has reported a first-half-year profit of $14.9m, $3m up on last year.

Tower chief executive, Richard Harding, said it was the result of transforming the business and offering something better to customers.

'Our strategy has focussed us clearly on becoming a digital challenger brand, taking on the big incumbents and challenging outdated industry norms,' he said.

* Tower follows AA Insurance's coronavirus lockdown profit pledge

* Tower sues EQC for $80 million for fixing earthquake-damaged Canterbury homes

'In March almost 60 per cent of our new business came in through our digital channels.

'People want to do more digitally and we are well placed to help. We have had great take up of our new self-service portal and over 40 per cent of claims were lodged online in March.

'The growth we are achieving through digital channels and the number of customers now choosing to interact with us online shows that digital is the way of the future and that we are on the right path.'

But he said the recessionary environment meant growth would be lower than planned and the company needed to reduce costs.

'We are currently working through a process to deliver cost savings of $7.2m per year, which includes a proposal for 108 redundancies, along with other cost-out initiatives.

'As part of our ongoing shift to become a digital company with a more flexible workplace, we are also proposing to create 30 new flexible and part-time roles that enable us to respond more effectively to the new, digital ways that customers interact with us.

'At Tower we are a close-knit team and any processes or decisions that affect our people are never made lightly. We will be supporting our team through any changes that are made with the right support.