ITIC has been returning money to its Members for the last four years through continuity credits at renewal.

Where does this money come from?

In an era where mutuality seems to be going out of fashion, it is worth reminding oneself that a mutual has no outside shareholders eagerly awaiting their cut of the profits in the form of dividends. As a Member of a mutual, you are also a ‘shareholder’ and so any surplus can only be paid to you and not to any other third party.

These surpluses arise mostly from investment of the reserves of the Club. If the return on those investments is good and the underwriting results satisfactory, a return can be made to the Members in the form of a credit at renewal. Those investment returns over the last four years have been good, although future returns look to be levelling off in line with lower returns and interest rates world-wide.

Why not return all the reserves to the Membership?

That is not possible if the Club is to continue in business. It is a requirement of the Club as an insurer registered and regulated in a member country of the European Union to maintain sufficient reserves. The required level of reserves is reviewed from time to time and is likely to be increased again by the regulatory authorities before long. It is likely that credits will continue to be offered to the Membership for at least the next two years. Those Members who are in the middle of a two year policy will shortly receive a reminder debit note and a credit note. They should simply deduct one from the other and remit the balance.

If Members or their brokers have any further questions on continuity credits they should contact Stuart Munro, the Underwriting Director:

Telephone: + 44(0)20 7204 2933

Facsimile: + 44(0)20 7338 0151


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