TT Club reports ‘satisfactory? 2007 in softer insurance market

TT Club reports ôsatisfactoryö 2007 in softer insurance market    London-based mutual insurer TT Club, which covers roughly 70 percent of the world's container fleet, said Thursday its net worth increased 9 percent to $148.7 million in 2007, the sixth consecutive year-on-year rise.
   Total surplus and reserves rose 6.9 percent to $126.9 million, while gross premium income dipped 0.6 percent at $205.6 million. The TT Club's investment return in 2007 was $23.1 million, just down on the record high of $25.2 million in 2006.
   Net claims “in a largely disaster-free year” for the insurance industry were down 1.7 percent at $119.1 million.
   “Concerns remain high over the rising tally of bodily injury and handling equipment claims,” said TT Club's Chief Executive Paul Neagle, “but our adverse experience of 2006, with its late surge in claims, was not repeated in 2007.”
   In what it described as a softening insurance market the TT Club said its results were “satisfactory,” capping a year of both consolidation and progress. Neagle said the industry's strong returns from high interest rates and buoyant stock markets came to an abrupt end in the third quarter when the effects of the defaults in the U.S. subprime sector hit the global financial markets.
   “While the club's investment portfolio is not directly exposed to losses arising from subprime debt, our conservative investment strategy has been, and remains, sensitive to changes in the interest rate environment,” he said.
   The TT Club's retention rate on renewals last year was more than 90 percent, and it reported that all of its major accounts have been renewed for 2008 and several for 2009 also.
   Looking forwards, Neagle said the insurance industry's operating costs, already under inflationary pressure from a weak U.S. dollar and a shortage of skilled professionals, would be further impacted by increasing regulatory burden.
   “The club seeks to expand its penetration of several sectors and will be focusing on bulk terminals, ground operations at airports and European logistics operations. Lastly, the Club will invest in new IT systems in order to maintain its leading position in the provision of claims handling and risk management service to members,” Neagle said.
   The TT Club is the international transport and logistics industry's largest provider of insurance and related risk management services. Its membership of more than 1,000 companies in 150 countries comprises ship operators, ports and terminals, road, rail and air freight operators, logistics companies and container lessors.