Chairman O'Duill goes as leaning Tower righted

Tower's annual meeting passed almost without a ruffle today -- a clear signal investors consider the insurer and fund manager is back on track after three years of restructuring.

Tower's chairman, Olaf O'Duill, was obviously equally content, announcing he would retire by June 30, having been appointed as a crisis manager after Tower shares went into free fall in December 2002 following a disastrous Australian foray and shock loss.

"We have a fair bit of blue sky ahead for this group," Mr O'Duill told shareholders.

Much of the back-slapping stemmed from last month's announcement Tower would acquire Australian life insurer Prefsure -- a move that jetted Tower from a market minnow to a top five player in the Australian life insurance business.

The A$145 million ($160m) purchase effectively doubled Tower's Australian business.

Prefsure's annual premiums totalled about A$271m and gave Tower valuable exposure to new business areas, Mr O'Duill said.

The outgoing chairman was unapologetic about the three-year dividend hiatus.

Opportunities like the Prefsure purchase -- which would be funded from existing cash reserves and bank debt -- were rare and needed to be jumped on, he said.

"We realised Tower had to bulk up or risk being swallowed up in Australia. You have to act when the opportunity comes up," Mr O'Duill said.

"For the time being a dividend will not be paid."

Looking ahead, Tower group managing director, Jim Minto, said the New Zealand macro-economic outlook remained challenging, particularly with the taxation of managed funds.

Australia, on the other hand, was a huge growth market, with compulsory superannuation seeing managed funds growth in the order of 17 per cent per annum.

Both New Zealand and Australia remained "significantly underinsured", Mr Minto said, especially in light of the recent housing market boom.

"People have taken on very high debt levels," he said.

The only murmurings from shareholders today concerned raising Tower's public profile, which was dragged through the mud in recent years, attracting monikers like "Fawlty Tower" or "leaning Tower".

Tower's origins go back to 1869 when the Government Life Insurance Office was created.

Ownership was transferred to policyholders in 1990 and the company demutualised and listed on the Stock Exchange at an issue price of $5.65 in 1999.

Tower shares last traded up 2c at $2.09, compared with an all time low of 98c in May 2003.

- NZPA