Tower chairman Bill Falconer admits his company lost the bid for AMI Insurance because it was too conservative and was outgunned by a larger Australian company.
Mr Falconer told shareholders at its annual meeting on Wednesday morning that the compant was not bold enough when it bid for AMI, which has since been acquired by the insurance giant, IAG, for $380 million.
Mr Falconer says Tower had a deal, which involved raising more money, but its price was too low.
''Maybe we were too conservative,'' he said.
Milford Asset Management executive director Brian Gaynor, whose company has a 5% stake in Tower, said he was disappointed the bid failed.
''The AMI acquisition would have been a real game breaker for this company ... (but) the whole board became too tame in the end,'' he said.
Shares in Tower have risen 5 cents to $1.50.