LONDON--(BUSINESS WIRE)--A.M. Best 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 ratings remains stable.
TTB’s ratings reflect its excellent consolidated risk-adjusted capitalisation, strong reserving practices and specialist business profile. The ratings of TTI reflect the integral part it plays in TT Club’s strategy, as well as the reinsurance protection provided by TTB.
TTB is expected to maintain excellent risk-adjusted capitalisation, underpinned by stable operating performance. Capitalisation is enhanced by a USD 30 million subordinated loan (issued in 2006). In addition, the club continues to set reserves with a significant margin above its internal actuary’s best estimate.
TTB benefits from a strong specialist business profile in the international transport and logistics insurance market, covering both property and liability risks for port, ship and logistics operators. Its business profile is supported by active involvement in loss prevention and risk management within the industry and by a superior service standard, which underpins a policyholder retention rate of over 90%.
Partly offsetting these positive factors is the club’s reliance on reinsurance to support its relatively large maximum line size. The risks associated with high reinsurance dependence are partly mitigated by the high credit quality of the club’s reinsurers.
TTB’s performance record is supportive of its ratings. The club is expected to continue to report financial year combined ratios of around 100% in most years, consistent with its historical five-year average combined ratio. As a mutual, the club is not pressured to generate high returns and TTB is expected to report pre-tax profits in most years in line with its performance record since 2009.
TTB is well positioned at its current rating level. A factor that could lead to negative rating actions is a substantial deterioration in performance affecting TTB’s consolidated risk-adjusted capitalisation.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.