New Zealand insurer Tower has provided a full-year earnings update ahead of its results announcement in November.

Underlying net profit after tax for the year to September 30 is expected to be $NZ100-$NZ110 million ($89-$98 million), provided no large events are recorded this month.

The guidance is up from a previous estimate of $NZ70-$NZ80 million ($62-$71 million), which assumed full utilisation of Tower’s allowance of $NZ50 million ($44.8 million) for large catastrophes.

Tower says to date it has recorded only $NZ7 million ($6.3 million) in large event costs.

The outlook for gross written premium growth has been cut to 2%-3% from mid single digits, as average premium has decreased.

The insurer says customer growth remains strong, up 5% to 318,000 insureds, and policy numbers have risen 4%, mostly in the New Zealand house insurance portfolio.

“As signalled at the half-year, policy and customer volumes have continued to grow, while average premiums have reduced,” Tower said.

“This is due to a higher proportion of lower-risk new policies, consistent with Tower’s risk-based pricing approach, and more competitive pricing in the New Zealand market.”