Best Affirms Ratings of Marine TT Clubs in Bermuda and UK

June 20, 2011

A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of ‘A’- (Excellent) and the issuer credit ratings of “a-” of Bermuda-based Through Transport Mutual Insurance Association Limited (TTB) and its subsidiary, the UK-based TT Club Mutual Insurance Limited (TTI) . TTB and TTI collectively trade as TT Club.

The outlook for both ratings remains stable.

The ratings of TTI reflect the “integral part it plays in TT Club’s strategy, as well as the reinsurance protection provided by TTB,” said best “TT Club is expected to maintain excellent consolidated risk-adjusted capitalization in 2011, following the good operating surplus achieved in 2010. Capitalization is supported by a USD 30 million subordinated loan (issued in 2006), and the club benefits from an extensive reinsurance program.

“Although the club introduced a revised reserving methodology in 2009, which led to substantial prior year reserve releases, the club continues to set reserves with a significant margin established above internal actuaries’ best estimate.”

Best also noted that in 2010 “TT Club’s underwriting result, while weakened by losses arising from the earthquake in Chile and two major maritime incidents, was enhanced by prior year reserve releases.

“For the 2011 financial year, the club is expected to report a combined ratio marginally above 100 percent (2010: 93 percent), following losses from the major natural catastrophes earlier this year, especially the Japanese earthquake and tsunami, but the technical loss is likely to be offset by investment income.

“Further ahead, underwriting results are expected to improve as world trade recovers and demand for the club’s products increases, while the club’s conservative investment portfolio is likely to make a positive, but modest, contribution to earnings.”

Best also described the club as having a “strong specialist business profile in the international marine transport and logistics insurance market, covering both property and liability risks for port, ship and logistics operators. The club’s business profile is supported by a commitment to provide a superior service to policyholders and by active involvement in loss prevention and risk management within the industry.”

Source: A.M. Best

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