3 September 2002

Signs Major Quota Share Deal with Swiss Re

TT Club, the leading provider of insurance and risk management services to the international transport industry, is increasing the volumes of premium underwritten in 2002 and 2003 after signing a major quota share reinsurance agreement with Swiss Re and a second contract with another major reinsurer. The two contracts will enable the Club to underwrite additional premiums of up to US$ 36 million in 2002 and a further US$ 48 million in 2003, a cumulative increase of over 70% compared to 2001. The Club was advised by Marsh, who also placed the contracts on the Club's behalf.

Chief Executive, Paul Neagle, said: "Early indications show that the 2002 policy year will produce a positive underwriting result, and the Club expects the current favourable market conditions to last through the whole of 2003 and, possibly, into 2004. The development of the 1999, 2000 and 2001 policy years is now looking more favourable, and our latest projections indicate that claims will fall well within the provisions that were included in our financial results for 2001 announced in June."

Underwriting Director, Brian Wood, said: "This year, virtually all our available capacity has been put to use on the renewal of our existing accounts and, as a result, we have been unable to accept a lot of good business that otherwise we would have wished to accommodate. This has been very frustrating as we are now experiencing the best market conditions for a decade, with most of our competitors either reducing their exposure to the marine sector or sharply increasing their prices."

These two contracts are the second and third placed by the Club in 2002. The first was placed in May with the Swiss Re Group and runs until the 2005 policy year. It was designed to protect the Club against future claims volatility and any adverse development of the 2001 policy year. It also improved the Club's technical solvency ratio but did not provide sufficient support for the projected levels of underwriting for 2002 and beyond.

The Club has sharply decreased the level of risk and volatility by reducing the equity exposure and re-aligning the Club's fixed income portfolio. This follows the negative investment returns experienced in 2001 and 2002, due mainly to the continuing decline of global equity markets.

Neagle added: "We are very pleased to have concluded these major agreements with two of the world's leading reinsurers, both of whom are triple A-rated, and we look forward to pressing ahead with our plans for growth that were announced last year following a strategic review."

ENDSNote to editor:

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 policyholders 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.

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Ian Lush

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