29 May 2002

TT Club, the leading provider of insurance and risk management services to the international transport industry, has presented its Annual Report for the financial year 2001 to its Members. The financial highlights reflect the severe nature of trading conditions during the year, characterised by insufficient rating levels in the first nine months, a significant rise in the level of projected claims and negative investment returns. TT has also outlined the measures already taken by the Club's Managers to combat these difficulties and maintain the high level of service enjoyed by Members over the Club's 34-year history. One such measure, announced today, is the signing of a long-term contract with the Swiss Re Group to provide protection against future claims volatility. The deficit for the financial year 2001 stands at US$ 40.2 million. This is principally due to a strengthening of reserves by US$ 23 million that the Club has made on the 1999 and 2000 policy years to allow for the projected deterioration in the claims position that became apparent at the end of 2001. This relates mainly to a high volume of low value claims estimates for the 1999 and 2000 policy years. In the light of this development, a conservative level of reserves for unreported claims in relation to the 2001 policy year has been made. Claims payments have remained consistent with the growth in the Club's business and, if the estimated claims deterioration does not fully materialise, then these additional reserves will not all be required. TT Club also suffered a second successive year of negative investment returns, due mainly to the continuing decline of global equity markets. In view of the downturn in the investment markets and uncertain economic outlook, the Club's Board and Managers have taken steps to reduce the level of risk and volatility by re-aligning the Club's portfolio. The Club has not had any direct exposure to the major catastrophes that have occurred during the last year but has not, however, been immune to the soft industry cycle that has had the effect of reducing rates in recent years. As a consequence premiums have been raised and average increases of over 40% (minimum increases of 20%) over fourth-quarter 2001 levels, have been required in order to restore rating levels. Parallel pro-active steps to avoid recurring underwriting losses have also already been put in place. These include increases in deductibles together with a tightening of underwriting criteria for both new business and renewals. Despite the decision to raise claims reserves and the negative effect of poor investment returns, the Club's total assets increased during 2001 by US$2.5 million to over US$281 million. Total surplus and reserves, ignoring any future investment income, remain substantially in excess of the required solvency margin. The Club's underlying strength was further highlighted in 2001 by a rise in gross premiums of approximately 11% to US$118.5m while operating expenses actually declined. In fact the expense ratio has been further reduced and is now extremely competitive compared to the sector average. The TT Club has been determined to enhance its financial stability and Paul Neagle, Chief Executive, was pleased to announce: "We have very recently concluded an agreement with a triple A-rated member of the Swiss Re Group. This five-year, quota-share reinsurance contract will provide additional protection against claims volatility for the foreseeable future. We have seen a sharp turnaround in our core business for the first four months of 2002. Premiums earned are up by 34% and claims incurred have fallen by 19% compared to the same period in 2001. This indicates that the strict underwriting policy is starting to have the desired effect." President and Chairman, Sir David Thomson reiterated the Club's commitment to increased service levels offered to Members. "Claims procedures have been enhanced," he emphasised in his Review. This is manifested in the Club's continued promotion of both TTeclaims™ and ClaimsTrac™, which are web-based claims notification and tracking tools that drive processing efficiencies. The Chairman was also confident of the future. "Looking ahead," he said, "the Club is now well-positioned to build on its solid foundations of high-quality cover and good value. The response of the Members to the Board's decision to raise premium levels indicates widespread support for our objectives. I am grateful for their, and their brokers loyalty to the Club as we continue to strengthen our financial underpinning." ENDS Note to editors: The TT Club is the international transport and logistics industry's leading provider of insurance and related risk management services. Established in 1968, the Club's membership comprises ship operators, ports and terminals, road, rail and airfreight operators, logistics companies and container lessors. As a mutual insurer, the Club exists to provide its policy-holders with industry-leading benefits, which include specialist underwriting expertise, a world-wide office network providing claims management services, and first class risk management and loss prevention advice. The full Annual Report and the Financial Highlights can be reviewed or downloaded and printed from the web-site www.ttclub.com by accessing the "what's new" column. For further information please contact: Ian Lush Tel + 44 (0)20 7204 2642 E-mail: ian.lush@thomasmiller.com Media contact: Michael Haig and Peter Owen, ISIS Communications Tel +44 (0)1737 248300 E-mail: info@isiscomms.com