Best Affirms FSR for TT Club

April 18, 2005

A.M. Best Co. has affirmed the financial strength rating of B++ (Very Good) of Through Transport Mutual Insurance Association Ltd (TT Bermuda) (Bermuda) and its wholly owned subsidiary, Through Transport Mutual Insurance Association (EurAsia) Ltd (TT EurAsia) (United Kingdom). The two companies collectively trade as TT Club.

The outlook has been revised to positive from stable. At the same time, A.M. Best has assigned an issuer credit rating of “bbb+” to both companies. The outlook for this rating is also positive.

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

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 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.

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% at year-end 2004).

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

TT Club is a 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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