For the second time, Tower Insurance has overcharged customers entitled to multi-policy discounts. The first, saw Tower in 2017 get a telling off from the Commerce Commission but no financial penalty in return for a promise to upgrade its systems. The second, under a new regulator in 2025, saw Tower negotiate a seven million dollar penalty with the Financial Markets Authority. Now, Tower has decided to ditch multi-policy discounts.
Tower talked its way out of a threatened 2017 prosecution by promising it would fix internal systems causing premium miscalculations and undertaking to compensate all affected customers.
Tower’s project Bluebird was supposed to iron out problems experienced in migrating data from legacy systems. It was not successful.
The High Court was told similar problems arose subsequently; another migration issue, but a different one.
Tower self-reported to the Financial Markets Authority (FMA) its overcharging of customers for a ten year period ending early 2025.
Some 61,000 customers were affected; overcharged about eleven million dollars.
Over the same period, other customers were under-charged nearly ten million dollars.
Tower compensated customers overcharged. It did not pursue customers under-charged.
It was not enough to miscalculate premiums, Tower also mis-described the discount policies it inaccurately applied.
Tower faced legal action under the Financial Markets Conduct Act both for overcharging customers and for publishing misleading marketing material and Facebook posts which misrepresented its supposed multi-policy discounts.
The High Court approved a negotiated settlement between the FMA and Tower with Tower ordered to pay a seven million dollar penalty.
FMA has first claim on this money to pay its costs.
Financial Markets Authority v. Tower Ltd – High Court (5.12.25)
20.039