Best Affirms Through Transport Mutual ‘B++’ Rating

May 21, 2004

A.M. Best Co. announced that it has affirmed the “B++” (Very Good) financial strength rating of Through Transport Mutual Insurance Association Limited (TT Bermuda) and its core subsidiary Through Transport Mutual Insurance Association (EurAsia) Limited (TT EurAsia). Best noted that the “two companies collectively trade as TT Club (The Club),” and indicated that the rating outlook for both companies remains stable.

“The rating reflects The Club’s improving consolidated financial performance,” said Best. It expects to see a return on net earned premium of between 15 and 20 percent in 2004 and 2005. “Underwriting performance is expected to be the main driver of financial performance with a combined ratio of between 90 percent-95 percent likely in 2004 and 2005.”

Best also indicated that the “Club’s consolidated risk-adjusted capital position is likely to be maintained at least at the very good level at year-end 2004, resulting from conservative net premium income growth targets and solid projected retained earnings. The Club is a specialist insurer and reinsurer, providing cover for its members located worldwide with business lines including loss and damage to cargo, ships, property and members equipment.”

The rating agency noted that “An offsetting rating factor is the reliance on reinsurance cover with approximately 45 percent of gross premium income expected to be ceded in 2004. However, these concerns are partially mitigated as the company has in place a number of multi-year policies with high quality reinsurers, and A.M. Best believes reinsurance ceded is likely to fall to between 35 percent-40 percent by 2005.

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