Skuld, a world leading marine insurance provider, recently announced a positive bottom-line result of USD 18 million for the first six months of its 2022/23 financial year ending 20 February 2023 (compared with negative USD 24.9 million for the same period in 2021/22). The outcome was mainly driven by a positive technical result, together with a significant investment contribution from the completion of the sale of Asta.
The half-year technical result amounted to positive USD 12.1 million, with an overall combined ratio at 95%. Gross premium and calls increased with USD 27 million to USD 228.1 million compared with the same period last year, with growth both from mutual and commercial lines of business. The half year was characterised by a benign large-claim environment compared with the same period last year. In the first six months, no new large claims were reported to the International Group pooling system for this policy year.
The positive six-month technical result was driven by positive contribution from Skuld’s commercial lines of business while the mutual book of business delivered a combined ratio above target. The uncertain claims environment and expected future impact of inflation on claims costs confirms the continuous effort on bringing the mutual book back into balance through improved rates.
Net investment income for the period contributed negatively with an investment return of -2%. War in Ukraine, energy shortages in Europe and high inflation created volatility, shifted yield curves substantially upwards and reduced the value of most asset classes. The strengthening of the US dollar also impacted the investment portfolio negatively. The sale of Skuld’s shareholding in Asta, which completed in July, helped to mitigate the unrealised loss during the period.
Ståle Hansen, Skuld president and CEO, said: “We are pleased with this six-month result, which sees an impressive reversal from the same period last year. We continue to see the benefits from the high quality of our entered tonnage, while our risk mitigation and loss-prevention initiatives continue to help to limit lower level, attritional claims. Moreover, our firm diversification strategy remains a successful priority.
“But we must be realistic; the insurance and investment environments are still extremely challenging, and with that in mind the threats imposed by the war in Ukraine and its political ramifications, high energy costs, and inflation 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.”