Best Affirms Rating of TT Club; Revises Outlook to Positive; Assigns ICR

April 19, 2005

A.M. Best Co. announced that it has affirmed the financial strength rating of “B++” (Very Good) of Bermuda-based Through Transport Mutual Insurance Association Ltd. (TT Bermuda) and its wholly owned subsidiary the U.K.-based Through Transport Mutual Insurance Association (EurAsia) Ltd. (TT EurAsia).

Best also noted that the “two companies collectively trade as TT Club. The outlook has been revised to positive from stable.” Best said it had assigned an issuer credit rating of “bbb+” to both companies with a positive outlook.

“The ratings reflect TT Club’s significant improvement in consolidated underwriting performance, resulting in higher risk-adjusted capitalisation from retained earnings and a strong business position as a specialist marine insurer,” said Best.

“The ratings of TT EurAsia reflect A.M. Best’s opinion of the company as an integral part of TT Bermuda’s worldwide strategy,” the announcement continued. “The change of outlook reflects A.M. Best’s expectation that the current ratings could be reassessed once TT Club has demonstrated a consistent track record of strong earnings.”

Best noted that “TT Club’s continued efforts to revise the quality of its business portfolio, which has included the cancellation of unprofitable policies combined with stable rating conditions has resulted in a better than expected underwriting performance (a 25 percentage point decline in the combined ratio to 77 percent at year-end 2004).”

The rating agency said it “expects TT Club to maintain its underwriting standards throughout 2005, and this is likely to lead to a combined ratio of approximately 85 percent despite an anticipated softening of rates of approximately 5 percent. Strong retained earnings (return on net premium of 38 percent in 2004) are further strengthening TT Club’s risk-adjusted capitalisation after factoring higher capital requirements from the planned increase in net retention to approximately 60 percent in 2005.

“TT Club is a leading specialist insurer and risk manager for the international transport and logistics industry, and A.M. Best believes that it has a strong business position in its niche market. Gross premium written is likely to remain stable at approximately USD 185 million in 2005 as expansion in the Asia Pacific region is likely to offset any softening of the market.”

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