The company has mostly completed a digital transformation which it said had been well received by customers. New online business accounts for more than 55 per cent of gross written premiums, compared with less than 10 per cent in 2016.
One shareholder, who noted that the digital platform had saved him $1,000 a year on car insurance, was concerned about the company retaining customers.
"What struck me is the ease that you can gain customers online also means you can lose online, especially with pricing. So what are your thoughts and forecasts on retention, because it seems to be a key area?" he asked.
"Retention is always a key focus for us and growing the business is keeping the customers you have. From a digital point of view we are aware that, while we have an advantage at the moment others will catch up," chief executive Richard Harding said.
"It comes down to customer experience and how we want to deliver an amazing claims outcome. With digital capability, it is about using the product for a lifetime and that's the only way we will be able to retain and sustain the business," he added.
The shareholder wanted more. "Yeah...I was really seeking some understanding of the expected retention rate."
Harding wouldn't provide a figure but said Tower's current retention rate was within the "normal range" compared with competitors.
Many shareholders at the meeting were grey-haired, and some had questions about more traditional forms of customer service.
One asked whether the online transformation would mean phone and in-person service was neglected.
"Its a bit like Concert Radio and Radio NZ," chairman Michael Stiassny quipped at one point. "It was recognised that other markets have to be looked after, but it's not one or another."
BusinessDesk asked Harding after the meeting whether he thought he clearly communicated the change to shareholders.
"A lot of our shareholders do understand the benefits arising from the digital transformation, which is why they are shareholders because they can see the upside. We are the biggest growing insurer in New Zealand at the moment," he said.
One shareholder queried Tower's decision to raise $47.2 million in capital late last year, which the insurer said was to do with its Youi acquisition, but also because the Reserve Bank decided to exclude some of its EQC receivables from its solvency calculations.
Tower said at September 30 there was about $70 million to be received from the government agency, and that its fight would likely to go to litigation. After the Christchurch earthquakes, EQC had agreed with insurers to pay out smaller claims and later get reimbursed by the government agency.
One shareholder dubbed the status of the EQC receivable as the "elephant in the room", which Stiassny said was a "totally incorrect" characterisation.
By removing the receivables from the RBNZ's solvency calculations they had become a plant "that is capable of flowering and growing and that is what we are trying to do," Stiassny said.
"We are sitting at the table at six foot six looking into the eyes of EQC and saying we want what is rightfully ours. The asset is secure. It is simply the quantum, so we are in the best position we could be," Stiassny said firmly. Tower would not be "squeezed" by EQC in negotiations.
Stiassny said the change in financial position was also responding to enhanced regulation.
"It's clear there will be far more regulation/supervision by Reserve Bank, FMA and others," he said. "We took a position earlier than others and have got ourselves into a position where we think we have a relationship with the Reserve Bank which is a good one moving forward."
After the meeting, Harding said that while most insurers' claims were being dealt with by EQC on a case-by-case basis, $13 million of the receivable was tied up in a case to be heard in court the middle of next year. That case, over land values, is being brought alongside IAG.
"It may be that we are in the same place with buildings recoveries but at the moment it is dealing with it as fast as we can, we have a really clear case and sound and solid evidence."
The annual meeting was the last for Harding, who returns to Sydney at the end of the year having been appointed chief executive in 2015.
