Skuld reports positive bottom line and robust financial position

Press release

Published: 15 May 2020

Press release - Waves (illustration)

Skuld today announces a positive bottom line result of USD 25 million for its 2019/20 financial year ending 20 February 2020 (a 127% increase on USD 11 million in 2018/19), and a total combined ratio of 109%.

The positive 2019/20 bottom line was supported by particularly strong investment returns towards the end of the year. Global investment market volatility favoured Skuld’s investments, with a return of 5.5%. On the mutual book of business, the company’s technical result continued to show the clear need to bring premium levels into line with risk. Skuld’s commercial marine liability, as well as Skuld Hull underwriting, also contributed positively to the overall result.

There were a number of mid-sized claims and some large claims leading to Skuld’s first negative technical result in 16 years. Skuld reported no pool claims on its own mutual book but covered the share of those made by other clubs and continues to support the efficiency gains achieved through its membership of the International Group. Also, the 2019/20 result was impacted by one-off costs associated with previous year closure of Skuld’s Lloyd’s syndicate 1897.

Skuld’s contingency reserves stand at USD 466 million.

Ståle Hansen, Skuld president and CEO, said: "At the end of a challenging 2019/20 financial year, I am very pleased with the positive result. We remain in a robust financial position as reflected by our contingency reserves. The 2020/21 P&I renewal was firmer than in previous years and having witnessed a decade of rate depreciation driven by market competition and a well-capitalised P&I industry, we will continue to do our best to support members by offering competitive rates. However, our technical result shows the clear need to bring premium levels into line with risk. Our long-term investment strategy remains conservative, which is proven to handle extreme volatility although our results will be affected in the short term.

“I have to mention the global Covid-19 pandemic. Our focus has remained on keeping service levels high and assisting members and clients in the best ways possible as well as keeping our staff and their families safe and well. Obviously, the circumstances call for a great deal more flexibility than the industry has perhaps ever needed before, and the global Skuld team is ready to accommodate our membership to ease their challenges.”

Skuld remains well above all regulatory solvency requirements and is aligned with its own stricter internal solvency targets as set by the Board.