Welcome from Chief Executive Officer Richard Harding
Chief Executive Officer
Welcome to the latest edition of The Leading Light, TOWER's investor newsletter, and my first as Chief Executive Officer.
Since arriving at TOWER, one of my key priorities has been to meet as many investors as possible, to listen and to discuss the future of our business.
It was a pleasure to see the Annual Shareholder Meeting (ASM) so well attended, with investors taking an active interest in the company’s performance and our future plans.
At the ASM, I spoke about the need for TOWER to draw a line under its transition journey. Much has been written about TOWER’s move to become a general insurer; and this is who we are now.
Our mission now is to create a high performing general insurance company.
That transformation is predicated on TOWER growing and retaining its customers. To date, we haven’t done this as well as we need to, and that must change.
The TOWER team understand this and are committed to delivering results that reflect a high performing business.
We have three key priorities now in play:
- Delivering a high performance customer service culture;
- Focusing on operational excellence (in particular, product rationalisation and reducing our cost base); and
- Accurately pricing risk.
These factors are being targeted to contribute to a stronger financial performance and commensurate shareholder returns.
Delivering a high performance customer service culture and achieving operational excellence are not mutually exclusive goals: one cannot succeed without the other.
We have a willing and very able customer service team who demonstrate the right attitude on a daily basis, but they need the right products, processes and tools to deliver stellar service. That means fewer products, better IT platforms and quicker processing times.
We are making headway with product rationalisation and each step will incrementally improve our performance, both from a customer and shareholder perspective. However, as I noted in my ASM presentation, this is complex work and, with 350 different policy versions and 150 different on-sale products across three different IT platforms, it will take time to complete.
The full rationalisation will realise a raft of benefits including reduced call times, staff training, auditing and claims leakage all of which result in significant cost reduction.
Our third priority – accurately pricing risk – is seeing TOWER develop more tailored insurance products based on specific customer behaviour, reducing the inherent cross subsidisation that occurs between low and higher-risk customers. Accurate pricing of risk has a number of significant benefits for the business; most notably it rewards and therefore, encourages, better behaviour. This results in fewer claims, less losses and improved margins (profits).
In closing, you will note in this newsletter, further down the page, that we have recently appointed a number of talented new executives to the Executive Leadership Team.
Each member has the specific skills and experience required to successfully meet the specific challenges we face.
I believe we now have a formidable team in place and I look forward to reporting our progress.