TT Club in US$30m capital boost


  • Date: 11/10/2006

12 October 2006

Transport insurance provider TT Club has announced that it is strengthening its capital base through the issue of “floating” subordinated loan notes worth a total of US$30 million. The loan notes have been issued by parent company Through Transport Mutual Insurance Association Limited and have a duration of 30 years, though they can be repaid at any time after five years at the Club’s option and subject to regulatory approval.

The Club commented that this type of financing is increasingly used by insurance and reinsurance companies, including some mutuals, as a cost-effective method of raising capital to support growth or to mitigate business risks alongside equity-raising and reinsurance protection.

Explaining the decision to raise further capital Paul Neagle, TT Club’s chief executive, said: “Since regaining our AM Best A- (Excellent) rating in May this year we have been considering our options to ensure that the Club has sufficient capital to underwrite the increasing volumes of business presented by the membership over the next five years, while maintaining a prudent margin of solvency above both current and future regulatory requirements.”

“We are also conscious of the increasing catastrophe exposures faced by many members, and the potential impact of those exposures on the cost and availability of reinsurance in the future,” he continued. ”The net annual cost to the Club of this option is both predictable and highly competitive when compared with alternative solutions involving additional reinsurance purchase.”

The interest payable under the loan notes is expressed as a fixed margin above US$ three month LIBOR, and the proceeds will be invested in low-risk instruments matched as closely as possible to LIBOR. . The notes qualify as Lower Tier 2 Capital under UK FSA regulations and count towards the Club’s capital adequacy in the AM Best model.

ENDS


Note to Editors:

The TT Club is the international transport and logistics industry's leading provider of insurance and related risk management services. Established in 1968, the Club's membership comprises ship operators, ports and terminals, road, rail and airfreight operators, logistics companies and container lessors. As a mutual insurer, the Club exists to provide its policyholders with benefits that include specialist underwriting expertise, a world-wide office network providing claims management services, and first class risk management and loss prevention advice.

For further information please contact:
Ian Lush, Marketing Director, TT Club
Tel: +44 (0) 20 7204 2642
E-mail: ian.lush@thomasmiller.com
www.ttclub.com

Media contact:
Peter Owen, ISIS Communications
Tel: +44 (0) 1737 248300
E-mail: info@isiscomms.com
www.isiscomms.com

A full archive of all TT Club news releases and photographs is available from the ISIS Communications Press Room at www.isiscomms.com

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority and is authorised in the UK by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority.

The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.