Tower CEO Richard Harding to depart late 2020

Tower CEO Richard Harding. Photo / Supplied

Tower chief executive Richard Harding plans to step down towards the end of 2020 as the insurer beds down its new digital sales platform.

Harding, who joined the firm in August 2015, has opted not to extend his contract beyond its current term and intends to return to Australia, Tower said. He joined Tower having been chief executive of Territory Insurance and had previously held senior roles with Insurance Australia Group.

Tower has invested heavily in new IT systems in recent years to become a "digital" insurer, reducing cost and making it easier for customers and potential customers to buy insurance and make claims. It aims to get close to 70 per cent of transactions done online, and last month said just over half the new business it booked in September and October was done online.

Tower chair Mike Stiassny said Harding had led a transformation that fundamentally changed the company from a traditional insurer. The firm is increasingly profitable, based in technology and ready to disrupt the local insurance industry, he said.

It will look locally and internationally for a replacement who can continue driving Tower's shift into a "digital challenger."

That search will include considering internal applicants and provides "ample time" for an appropriate handover period and smooth transition, he said.

Tower shares were unchanged at 73.5 cents and have gained about 2.5 per cent so far this year. The firm raised about $47.2 million in a renounceable rights offer in October to fund its purchase of the Youi business and to meet revised capital requirements of the Reserve Bank of New Zealand.

Harding said the new platform operating model the firm is shifting to will allow it to be more flexible and test and develop new services for customers quicker.

To support that change, chief information officer Peter Muggleston will take up the new role of chief operating officer. He will be responsible for the firm's claims, underwriting, Pacific and IT business units and will be expected to drive benefits from the firm's IT investment, Harding said.

Muggleston joined Tower a year ago after seven years with Foodstuffs. Prior to that he was chief information officer at Sovereign Insurance.