Web-only circular
At the Board meeting on 10 May 2023, the Board reviewed the policy years for the Association and decided on release calls for the open years. At the Committee meeting 16 June 2023, the Committee made a recommendation to the AGM to close the 2020 policy year. Please see further details on the review of policy years below.
Review of Open Policy years
Skuld will apply its internal risk model to calculate the risk of deterioration for each policy year. In contrast to Solvency II where the risk horizon is the next 12 months, the risk of deterioration is calculated for the full development of the individual policy year. The risk model takes into consideration:
- premium risk
- reserve risk
- market risk
- counterparty risk
- operational risk
Further, Skuld will apply the value at risk (VaR) with a confidence interval of 99.5% when assessing the risk of deterioration. For current policy years, all risk factors mentioned are relevant. For old policy years, only reserve risk, counterparty risk and operational risk are relevant.
Policy Year 2020
The Policy year 2020 had a positive technical result and generated a result of USD 12 million. The Board and the Committee has recommended to the Annual General Meeting to close the 2020 policy year without further calls.
Policy Year 2021
The Policy year is assessed according to the model described above and due to its maturity, the relevant risks are reserve risk, counterparty risk and operational risk. The Board decided to reduce the release call to 7.5%, applicable from the AGM 14 September 2023.
Policy Year 2022
The Policy year is assessed according to the model described above and due to its maturity, the relevant risks are reserve risk, counterparty risk and operational risk. The Board decided to reduce the release call to 10%, applicable from the AGM 14 September 2023.
Policy Year 2023
The Policy year is assessed according to the model described above and since this is the running Policy year all the risk factors above have been taken into consideration. The Board decided to maintain the release call at 15%, applicable from the AGM 14 September 2023.
Summary of Policy Years
2019: Closed
2020: Proposed to be closed by the AGM 14 September 2023
2021: Release call reduced to 7.5%
2022: Release call reduced to 10%
2023: Release call maintained at 15%
Yours faithfully,
Ståle Hansen
President and CEO
Assuranceforeningen Skuld (Gjensidig)