TT Club underwriting performance holds fast in challenging trading conditions
Tuesday, 17 April 2012 | 00:00
The TT Club, a leading provider of insurance and related risk management services for the international transport and logistics industry, today announces an 8.5% growth in premium income, resulting from new business, increase in volumes and a continued high level of member retention, in its financial results for 2011.
The Club has maintained a stable financial platform and good underwriting results, despite challenging market conditions for the transport and insurance industries, reinforcing its very strong capital position equivalent at A++, the highest rating on the AM Best capital adequacy model.
In his statement, Knud Pontoppidan, Chairman, TT Club, highlighted the challenging trading environment the insurance industry faced during 2011 that saw heavy losses in the first part of the year, comprising the second of the Christchurch earthquakes, flooding in Queensland, Australia, the earthquake and tsunami in Japan and the flooding in Thailand:
“In difficult insurance market conditions the Club performed well. The overall combined ratio continues to be below 100% (98.6%) meaning that the Club’s outgoings in claims payments and administrative expenses are more than offset by premium income - which is a very important and healthy position to be in with market conditions as they are,” Pontoppidan said.
The TT Club’s net result was a surplus US$1.2m (lower than the 2010 net result which was enhanced by higher prior year release) whilst surplus and reserves reached a record level of US$145.4m.
Charles Fenton, CEO, TT Club, drew attention to the fierce competition the TT Club faced during the past 12 months, that was almost exclusively on price, rather than on product where very few of the TT Club’s competitors can replicate its value added product and service offering:
“There were signs, however, in the latter part of the year that the rating environment was improving and, at the renewals on 1st January 2012, the Club achieved increases on most renewing accounts. Whether this is the start of a change in market conditions will become clearer through 2012, but it is the case that insurers in the Club’s market sector are suffering reduced profitability as a result of real rate erosion in recent years,” Fenton commented.
The TT Club has maintained one of its significant key differentiators, the embedded loss prevention approach in its underwriting and claims activities to reduce exposure to unnecessary risk and claims incidence, and its loss prevention team were involved in three important international initiatives during the past year: weighing containers, packing containers and cargo transport units and incident information sharing.
Following feedback received from Members, a cargo product has been added to the TT Club’s range of products, and during 2011 there was positive growth in the take up of this product, contributing to the TT Club’s financial health and adding a valuable insurance component for Members.
In summarising the financial results at today’s briefing, Knud Pontoppidan, Chairman, TT Club, said:
“With the ever increasing complexity and fragility of the global supply chain, combined with a continuing difficult trading environment during this global economic downturn, we are ever keen to position the Club as a provider of service and product focussed for Members at what might be termed their working layer of insurance.”
“It is pleasing that the number of Members in the Club is growing year on year and that the average premium per Member is reducing. This can only be a positive reflection on our specialist underwriting expertise and our world-wide network providing claims management services, risk management and loss prevention,” he added.
The TT Club has four underwriting centres in London, New Jersey, Hong Kong and Sydney and a network of claims offices in 16 countries.
Source: TT Club