Prudent reserves policy pays off
The TT Club made a modest operating loss in 2010, which chairman Knud Pontoppidan said was a satisfactory result, for a mutual and in the light of market conditions.
This was more than offset by continuing improvement in the outcome of claims from earlier years, enabling $28.5m of reserves held in respect of those years to be released, as happened with $25m of reserves in 2009, but the club remained very prudently reserved, said Mr Pontoppidan. Its solvency capital position was further strengthened, with surplus and reserves rising to $144.2m from$131.4m.
Although premium rates fell by an average of 4%, growth from new business meant a 4% boost in gross earned premiums, to $171.2m. The forecast ultimate loss ratio for the 2010 policy year of 87% was unchanged from the 2009 year at the same stage.
The technical result for 2010, after allowing for investment income on the claims reserves, was a surplus of $12m, up from $4.1m the previous year. The underlying investment return, excluding currency effects, was 0.9%. Overall net surplus after tax was $12.8m, an improvement on the figure of $9.7m recorded in 2009.
