Tower Reaches Settlement with Peak Re

28 February 2018 Market Information NZX Limited Level 1, NZX Centre 11 Cable Street Wellington New Zealand Company Announcements Office ASX Limited Exchange Centre Level 6, 20 Bridge Street Sydney NSW 2000 Australia TOWER REACHES SETTLEMENT WITH PEAK RE Tower Limited (NZX/ASX: TWR) today announced that it has entered into a settlement agreement with Peak Re regarding an adverse development cover policy entered into in 2015. Under the settlement agreement Tower will receive $22million of the $43.75 million claimed under the reinsurance contract and all sums claimed in the arbitration proceeding. The write off of the residual amount will result in a $15.2 million after-tax impact on profit. Tower Chairman, Michael Stiassny, said that reaching this agreement enables Tower to fully focus on the future. "During our recent capital raise, the Board indicated that real risk existed in both the process and the binary nature of the arbitration. "The Board determined that a commercial settlement satisfactorily dealt with this unpredictability for both parties, and created welcome certainty for our shareholders and our business. "Tower committed to addressing the legacy risks arising from the Canterbury earthquakes and the signing of this agreement is a significant step forward in removing those risks," he said. Tower Insurance Limited continues to hold significant capital over and above the minimum regulatory requirement. As a result of this settlement, Tower Insurance Limited would expect to hold approximately $136 million of solvency capital which represents $28 million above RBNZ minimum requirements. In addition there is $39 million of corporate cash held by Tower Limited. ENDS TOWER Michael Stiassny Chairman Tower Limited ARBN 088 481 234 Incorporated in New Zealand For media enquiries, please contact in the first instance: Nicholas Meseldzija Head of Corporate Communications Tower Limited Mobile: +64 21 531 869 Email: nicholas.meseldzija@tower.co.nz End CA:00314891 For:TWR Type:GENERAL Time:2018-02-28 14:49:03