8th August 2023
ITIC's substantial surpluses during 2022/23 financial year are a great benefit to its members
Client news
ITIC’s, International Transport Intermediaries Club, financial results announcement revealed a substantial surplus in 2022/23. Now in its 31st year, ITIC, and its mutual reinsurer TIMIA, returned a US$ 8.1m surplus for the year to 31st May 2023 (“2022/23”) after paying US$ 14.5m in continuity credit. This follows the US$ 14.2m credit paid in the previous year.
Continuity credit is paid to renewing members and effectively reduces the cost of insurance. ITIC’s board, at its meeting in March 2023, reviewed the level of ITIC’s free reserves and concluded they are strong and well above the amount required for ITIC’s solvency purposes. The board therefore decided that, notwithstanding the high inflationary environment and continued volatility in the investment markets, they would pay a continuity credit for the 29th consecutive year for all renewals in the 2023/24 year.
The ITIC board considers the payment of continuity credits to be a significant benefit of mutual insurance coverage. Since the continuity credit payments began 28 years ago, more than US$ 190.0m has been returned to its members.
The risk for all claims up to US$ 1.0m continues to be retained by ITIC, as well as an additional two retentions above the primary US$ 1.0m level and one retention excess of US$ 2.0m. ITIC is comfortable that the reinsurance in place reduces the risks of large claims to an acceptable level at a reasonable cost.
ITIC’s total annual premium increased in 2022/23 by 4.4%, and ITIC has had four good years of growth. In past years, the total premium has remained static largely because of consolidation in the transport services market.
Commenting on last year’s financial figures, ITIC’s Chairman, Jeff Woyda, said: “ITIC continues to retain approximately 96% of its members at renewal each year – a reasonable retention rate and an indication of how highly our members view the quality of service and cover given. Also, I am pleased to advise that the combined free reserves of ITIC and TIMIA have increased from US$ 221.9m on 31st May 2022 to US$ 230.0m on 31st May 2023.
“The insurance, claims, contractual advice and practical help that we can provide through our staff in London to members, advisers, brokers and introducers worldwide continue to set us apart,” Woyda said.
The company is also expanding beyond London for the first time with the establishment of a subsidiary company in Cyprus. International Transport Intermediaries Insurance Company (Europe) Ltd (“ITIICE”), will open later this year (2023) and ITIC will underwrite its EEA business through this subsidiary.
Woyda said: “The new structure will enable ITIC to be less reliant on third-party fronting arrangements, whilst members and brokers will continue to enjoy the same high level of service to which you have become accustomed.”
He added: “Most of you will know ITIC as an insurer of risks in the marine sector; however, ITIC has also provided cover to aviation professionals, for several years. This is a market in which the board sees strong growth potential, and to this end, you can expect to see more activity from the managers as, with the board’s support, they look to grow this sector of ITIC’s business.”
ITIC covers companies whose services include aircraft lease and operational management, continuous airworthiness management, charter broking, design and surveying/inspection services.
Woyda said: “ITIC is committed to consistently providing competitively priced professional indemnity insurance (and related insurance cover) with valuable, high-quality loss prevention advice to businesses servicing the marine, aviation, and general transport industry through a mutual insurance company supported by at least “A-” rated security from its external reinsurers.
“The focus will continue to be on maintaining strong reserves and providing quality service and sound risk management advice by a highly competent staff,” he concluded.
ITIC reports fully to Solvency II standards and is regulated by the Prudential Regulation Authority. Details of ITIC’s solvency position can be found in the Solvency and Financial Condition Report, which is available on the ITIC website LINK.