TT Club's rating affirmed
AM Best has affirmed the financial strength rating of A- of Bermuda-based Through Transport Mutual Insurance Association and its subsidiaries with a stable outlook.
AM Best said the protection and indemnity club's rating reflected its balance sheet strength, which AM Best assessed as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
"The ratings of TTI and TTNV reflect their strategic importance to TTB, and the implicit and explicit support that they receive from TTB, particularly in the form of comprehensive reinsurance protection," AM Best said.
"TTB’s balance sheet strength is underpinned by its consolidated risk-adjusted capitalisation, which is well in excess of the minimum required for the strongest assessment level, as measured by Best’s Capital Adequacy Ratio (BCAR)," the agency said. "The club’s balance sheet strength also benefits from a relatively conservative investment strategy and a track record of prudent reserving over a decade, although for 2023, the club reported prior year adverse reserve development.
"AM Best views TTB’s dependence on reinsurance, used to manage the club’s capacity, as an offsetting balance sheet strength assessment factor. The associated risks are mitigated partially by the high credit quality of the club’s reinsurance partners, many of which TT Club has long-established relationships with."
The agency said TTB had a five-year (2019-2023) weighted average return-on-equity ratio of 5.4%.
"Although TTB reported a technical loss for 2023, driven by strengthening its reserves, the club’s earnings are underpinned by profitable underwriting results over the cycle, demonstrated by a five-year weighted average combined ratio of 98.1%. In addition, the club’s overall earnings are supported by modest investment returns."
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