TT Club to peg premium rises despite hurricane damage
16 November 2005
TT Club, the leading transport insurance provider, has revealed the latest estimate of its claims exposure from hurricanes Katrina, Rita and Wilma and announced its underwriting stance for next year's policy renewals.
In a circular to members and brokers TT Club said that its latest combined gross claims estimate for the three hurricanes is approximately US$ 64million - a reduction on the estimates thought possible in the immediate wake of the storms. Through its strong reinsurance programme the Club is extensively protected and forecasts its net exposure will be approximately US$ 2.5 million after facultative, treaty and quota share recoveries.
However, TT Club is warning that reinsurers across the market have experienced record losses, and reinsurance rates are expected to rise sharply in 2006 for exposures in catastrophe areas. As a result, the Club says its reinsurance costs will increase in 2006 and those costs will have to be passed on to its members with applicable exposures.
Despite these concerns, TT Club stated that its existing policy of applying a five per cent claims inflation factor on renewals would be maintained, although there would need to be higher increases, estimated at up to 25 per cent for members with handling equipment, property and business interruption exposures in geographical areas prone to natural catastrophe events.
An exception will also apply for chassis insurance in North America, which will not incur the claims inflation factor.
The Club attributed its ability to mitigate premium rises to its restored financial strength, now back to pre-2001 levels and buoyed up by record 2004 results and positive projections for 2005.
ENDSNotes for 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 industry-leading benefits, which include specialist underwriting expertise, a world-wide office network providing claims management services, and first class risk management and loss prevention advice.
www.ttclub.comFor further information please contact:
Ian Lush, Marketing Director, TT Club
Tel: +44 (0)20 7204 2642
Peter Owen, ISIS Communications
Tel: +44 (0)1737 248300