Gallagher’s pre-renewal review 2020 #8 – Skuld

Broker Gallagher has released its 2020 pre-renewal review, covering past results and the situation for the policy year to date, with individual sections on the Group Clubs. Today: Skuld

Full Name: Assuranceforeningen Skuld Gjensidig

Web Addresss: www.skuld.com

Address: Radhusgata 27, 0158 Oslo Norway

Tel: +47 22 00 22 00

Fax: +47 22 42 42 22

S&P Rating (last change: increase to A from A- in 2012) A Stable

Geography

Europe 47%
Asia Pacific 43%
Americas 14%
RoW 5%

Types Of Vessel Entered

Tanker/gas carrier 39%
Bulker 35%
Passenger/Ferry 18%
Other 8%

Gallagher asked Skuld CEO Ståle Hansen what to date had been the most valuable lesson learnt from 2020.

Hansen said that the insurer empowered its employees to act independently to ensure Skuld’s service levels always reached the highest standards. “Lockdown had tested that strategic approach and had proved it to be robust. It showed that our focus on a digital journey combined with Skuld’s personal touch is powerful for members, and the right way to operate.”

On being asked whether with hindsight Skuld would have done anything differently Hansen said that the lockdown forced improved efficiencies on everyone, including by replacing in-person visits with online meetings, which saved money and helped the planet. “We could have adopted these practices much earlier, although I miss seeing members and clients in person. Physical meetings will always play a vital role in our complex industry”, Hansen said.

Gallagher noted that during the previous year Skuld had announced that its Lloyd’s syndicate 1897 would cease underwriting with effect from July 1st 2019, with the business being transferred, where appropriate, to its own corporate paper.

Having previously announced an intention to manage the run off in house, the Club actually sold the syndicate to RiverStone, following a tender process. Skuld will continue to underwrite all its hull and offshore energy business as Skuld Hull, the A‑rated corporate platform of Skuld Assuranceforeningen, through Skuld UK in London and Skuld Marine Agency in Oslo.

Gallagher said that the Club’s performance in policy year 2019-20 was reflected in the different combined ratios seen in each sector. Owners P&I mutual had a combined ratio of 119%, well above target; commercial business ran a 100% combined ratio. Skuld Hull, if one excluded Lloyd’s operations, would have returned a 74% combined ratio.

Skuld ended the first six months of the 2020/21 policy year with a negative result of $14.3m. A combined ratio of 115% generated a $25.5m underwriting loss, which reflected some COVID-19 related claims in the cruise ship sector. The Club did however reach August 20th with a 3.2% investment yield in a fast-recovering market, Gallagher observed.

TONNAGE 2019-20 2018-19 2017-18 2016-17 2015-16
Owned Tonnage 100.7 100.0 99.0 93.1 84.7
Chartered Tonnage 45.0 45.0 45.0 37.0 50.0
CALL HISTORY 2020-21 2019-20 2018-19 2017-18 2016-17
Forecast Call 0% 0% 0% 0% 0%
Latest Estimate 0% 0% 0% -2.5% -2.5%
GENERAL INCREASE 2020-21 2019-20 2018-19 2017-18 2016-17
On Advance Call n/a n/a n/a n/a n/a
On ETC n/a n/a n/a n/a n/a
POLICY YEAR DATA 2019-20 2018-19 2017-18 2016-17 2015-16
Call Income 249.9 273.2 281.9 290.0 301.3
Incurred Claims 169.8 192.0 214.1 167.0 171.8
Total Outgoing 263.7 296.0 317.7 271.9 277.5
Underwriting Result -13.8 -22.8 -35.8 18.1 23.8
Call Income/GT 1.72 1.88 1.96 2.23 2.24
Claims Incurred/GT 1.17 1.32 1.49 1.28 1.28
SOLVENCY 2019-20 2018-19 2017-18 2016-17 2015-16
Total Free Reserve 465.8 452.7 442.0 394.0 348.2
Tier 1 Capital 367.7 328.6 425.0 235.8
Tier 2 Capital 144.9 128.3 186.4 142.3
Solvency Capital Required 289.8 256.5 372.8 284.5
INVESTMENT INCOME 2019-20 2018-19 2017-18 2016-17 2015-16
Return on Total Assets 4.58% 0.03% 5.21% 3.03% -1.52%

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