Best Affirms TT Club ‘A-’ Ratings

A.M. Best Co. has affirmed the financial strength rating of “A-” (Excellent) and the issuer credit rating (ICR) of “a-” of Through Transport Mutual Insurance Association Limited (TT Bermuda) and its wholly owned subsidiary, the UK-based Through Transport Mutual Insurance Association (EurAsia) Limited (TT EurAsia). The two companies collectively trade as TT Club.

Best said the ratings of TT EurAsia continue to reflect its “view that the company is an integral part of TT Club’s worldwide strategy. The outlook for both ratings remains stable.”

Despite seeing some weaker earnings prospects, Best said it “believes the company will maintain excellent risk-adjusted capitalization in 2007-2008. The impact upon capitalization of poor underwriting performance in 2006 was offset by strong investment returns and a $30 million subordinated loan (issued in October 2006). The company continues to benefit from comprehensive catastrophe reinsurance protection.

“TT Club is likely to achieve an adequate net profit after tax of approximately $5-10 million in both 2007 and 2008 ($6 million in 2006). Combined ratios in the region of 105 percent are likely in 2007-2008 (down from 111 percent in 2006) due to the softening rating environment and discounts the company is expected to offer certain TT Club members (in line with its mutual operating objectives).”

Best also said it “believes the underwriting deficits will remain at a manageable level and are likely to be offset by investment income.

“TT Club continues to maintain a strong specialist business profile focused on the provision of insurance and risk management products for the international transport and logistics marine industry. Gross premiums written are likely to remain stable at $210 million in both 2007 and 2008 ($205 million in 2006).”