TT Club keeps its 'very good' AM Best rating

24 May 2004

RATINGS agency AM Best has forecast that Through Transport Club will continue producing good profits into next year. Following the club's latest financial statement the agency has affirmed its B++ (very good) financial strength rating.

The rating applies to TT Bermuda and its core subsidiary TT EurAsia, which collectively trade as TT Club. Outlook for both companies was said to remain stable. The verdict will be seen as backing the club's ambition to regain its A rating around the end of the year. Club managers say it already qualifies for the A category under AM Best criteria but rating changes are usually reserved for an annual review.

The marine liability insurer is seen as having made good progress since mending its reserves and overhauling its portfolio two years ago. AM Best expects "solid operating profits" - return on net earned premium of 15%-20% - in 2004 and 2005." Underwriting is expected to be the main driver of financial performance, with a combined ratio between 90% and 95% likely in the two years. Ratios below 100% reflect surplus on underwriting. The agency said an offsetting rating factor was reliance on reinsurance cover, with 45% of gross premium income expected to be ceded in 2004. These concerns were partially mitigated by multi-year policies with high quality reinsurers and the analyst expected reinsurance ceded to fall to between 35% and 40% by next year.