Skuld is pleased to report a positive half-year (six months ending 20 August 2023) result of USD 40 million, compared with USD 18 million at the half-year in 2022/23. The solid result was driven by a strong technical result and a contribution from the investment portfolio.
Highlights:
- Combined ratio at 90%
- Premium growth of 12%
- Positive investment return of 2.2%
The half-year technical result amounted to USD 21 million, an increase of USD 9 million from the same period last year. This resulted in a net combined ratio of 90%. A strong renewal, with growth both in mutual and commercial lines of business, resulted in gross earned premiums and calls of USD 256 million, an increase of USD 28 million (12.3%) compared to the half-year 2022/23.
In general, the first six months of 2023/24 was characterised by a benign own large-claim environment within P&I, in particular the mutual line of business, while the physical damage line of business was affected negatively by increased competition and a heavier claims environment.
Towards the end of the second quarter, several new large claims were reported by other clubs to the International Group (IG) pooling system. After the first six months, pool claims were at a more normalised level and affected the result negatively by USD 12 million. Skuld reported no new pool claims during the first six months of 2023/24.
Net investment returns contributed positively with 2.2% in the first half. Investment in the artificial intelligence (AI) sector continued to pull US equity markets upwards via its largest tech companies. Valuation for growth companies in the world rose substantially amid disinflation and a significant upward shift of yield curves in developed markets. The US Fed funds rate was raised three times to 5.5%. Global equities were up 5% over the period, sovereign 2-year yield in the US approached 5% and the trade weighted US started and ended around the same level.
Ståle Hansen, Skuld president and CEO, said: "We are very pleased with this six-month report, which sees a continued improvement following last year's 'turnaround' half year result. The benefits from the high quality of our entered tonnage, combined with our risk mitigation and loss-prevention initiatives continue to support our results. Moreover, this result further endorses our firm diversification strategy.
"However, the insurance and investment environments remain challenging. Inflation and high energy costs alongside various geopolitical tensions keep us ever mindful of the need for sensible pricing, selective underwriting, and very close working relationships with all of our members and clients. In so doing, we maintain our leadership position through financial strength and commitment to the highest quality service and will continue to provide members, clients, and brokers with our world class coverage and services, so that they can all rest assured with Skuld."