Increased number of large claims affect Skuld’s six-month result

Press release

Published: 7 September 2021

Skuld today announces a negative bottom-line result of USD 25 million for the first six months of its 2021/22 financial year ending 20 February 2022 (compared with negative USD 14.5 million for the same period in 2020/21).

Total gross premiums and calls during the half year reached USD 201.1 million, an increase of USD 11 million. Rising insurance premium in commercial lines were the main contributor to the increase, but Skuld’s mutual book of business also delivered premium growth.

The negative technical result – a loss of USD 54.1 million and a combined ratio of 127% – was driven by an increased number of large claims. Some of these reached Skuld from the other clubs through the International Group (IG) pooling system, but Skuld also suffered its own claims, including one which was ceded to the IG pool.

Net investment returns of 1.1% partly offset the technical loss. The value of Skuld’s holdings in developed equity and private markets continued upwards after last year’s shock to the global economy, but higher mid-term bond yields and the strengthening US dollar mitigated the positive impact of gains in other asset classes. Meanwhile tax reductions due to losses further improved the overall financial result by USD 12.5 million.

Ståle Hansen, Skuld president and CEO, said: “Skuld continues to profit from the high quality of our new and longstanding members’ entered tonnage, while our loss prevention initiatives help to limit lower level, attritional claims. The financial benefits of our firm diversification strategy have again been proven, and I remain strongly optimistic about its long-term support of Skuld’s renowned services to members and clients.

“That said, the rising loss trend in the industry which began several years ago has not abated, fuelled by increases in third-party casualty costs all shipowners face. While loss inflation continues to outpace premium income across the marine liability insurance sector, we maintain our leadership position through financial strength and commitment to the highest quality service and support for our members and clients.”

See also Financial reports