Tower Australia (Tower) managing director, Jim Minto has revealed the company's decision to offer the Accelerated Protection platform through its advice network temporarily harmed the firm but ultimately generated a positive result.
In his speech to shareholders at the listed insurer's annual general meeting yesterday, Minto didn't mince words.
"It has not been without some pain. The move from a three on-sale retail life products to Accelerated Protection for the independent financial adviser channel resulted in a brief reduction in market momentum," Minto said.
"It was a big change and it took time for the market to implement (but) the value created has been significant."
Late last year, Tower announced 26 improvements to the platform, on the back of adviser feedback.
In 2010, Tower reported strong underlying profit of $92.3 million, allowing company directors to approve a 10 per cent increase in the dividend to 5.75 cents per share.
"We have a vision of what we want to achieve in 2011 and beyond," Minto added. "Delivery is a big part of our culture and we are positive about the year ahead. We have set solid return-on-capital targets for the next three years and these have been well responded to by shareholders."
Minto's optimism was tempered by Tower chairman Rob Thomas, who told investors the year head will be "very interesting".
"The shifting economic and regulatory environment will be with us for some time. The government has flagged changes to the financial advice sector and we continue to look at using technological advances to deliver better services and products to our customers and business partners," he said.
Thomas said as well as keeping on top of proposed government reform, Tower is keeping a close eye on the Australian Prudential Regulation Authorities' (APRA) review of capital standards.
"We do not believe any significant increase is needed and we will endeavour to ensure that appropriate returns are priced on any additional capital required," Thomas said.
"We are hopeful that in any proposed changes, a sensible balance can be found that does not impose major new costs on consumers."
