Financial strength of ITIC
“The Club’s strong financial position has allowed it to introduce the concept of a continuity credit”
The financial strength of an insurer is becoming an ever more important consideration for the buyer of insurance and his broker. In order to fully appreciate the financial strength of ITIC, it is important to also consider the results of Transport Intermediaries Mutual Insurance Association Limited (TIM) which acts as ITIC’s offshore reinsurer. TIM is based in Bermuda and has no other function than the reinsurance of ITIC.
Each year Members of ITIC receive the accounts of both Clubs, together with a combined financial highlights report (see next page). The graph at the bottom of the report demonstrates the financial strength of the combined Clubs, with free reserves at the end of the 1996 Policy Year standing at almost ten million dollars. The 1997 draft figures confirm a further increase in the level of free reserves.
ITIC’s strong financial position has allowed it to introduce, for the first time, the concept of a continuity credit. This was granted to Members at the renewal of their insurance in both 1996 and 1997 and is funded from the reserves of the Clubs. Reinsurance costs have also been reduced by ITIC’s ability to share in the market reinsurance programme and, as and when the insurance market hardens, this benefit will become even more worthwhile. Last, but by no means least, the regulation of insurance companies by government bodies includes an increasing focus on solvency levels and underfunded insurers will find themselves facing increasing difficulties. A strong financial position is not only important for maintaining solvency margins, but also for allowing a greater proportion of risk to be accepted in times when reinsurance costs are high. This allows ITIC to maintain its policy of offering stability in the level of premium it charges rather than subjecting its Members to sharp increases based on circumstances outside its control. ITIC always underwrites responsibly and considers claims sympathetically whilst also ensuring the maintenance of its financial strength.