Best Affirms TT Club Bermuda, TT Club UK Ratings

June 13, 2012

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

The outlook for both of the 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,” Best explained. “TTB is expected to maintain excellent consolidated risk-adjusted capitalization in 2012. Capitalization is supported by a $30 million subordinated loan (issued in 2006), and the club benefits from extensive reinsurance protection. The club continues to set reserves with a significant margin established above actuaries’ best estimate.”

Best also indicated that the club is “expected to produce a combined ratio of around 100 percent in 2012, in line with its recent performance. The weighted average five-year combined ratio for the club is 102 percent for 2007-2011. Results are likely to continue to benefit from reserve releases given the club’s conservative reserving strategy. Investment income is expected to be positive but modest, reflecting a conservative investment portfolio.

“TT Club has 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. Its business profile is supported by a superior service standard, which underpins a high policyholder retention rate of around 95 percent, and by active involvement in loss prevention and risk management within the industry.”

Best said it “believes that positive rating actions are unlikely in the next 12-24 months. A factor that could lead to negative rating actions is a strong deterioration in performance affecting TTB’s consolidated risk-adjusted capitalization.”

Source: A.M. Best

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