Gard declares “strong half-year results despite market adjustments”

Norway-based Gard has reported a combined ratio of 99% for the first half of its financial year – which now runs from January to June – resulting in a gain of $59m, of which technical profit (on an Estimated Total Call basis)  made up $4m.

Other main numbers included:

  • A non-technical profit of $54m, including taxation and other comprehensive loss
  • Equity of $1,307m (on an Actual Call basis)

Gard CEO Rolf Thore Roppestad, said that “given the circumstances, we are very pleased with these numbers”. Noting the recent turmoil in the financial markets and continued geopolitical tensions, he said that “our investments have started to recover after an exceptional period last year, and our insurance results, which were remarkably strong in 2022, continue to be well within our expectations”.

The insurer reported an increase in claims on the Hull portfolio, but he noted that “volatility will always be a part of our business and it is too early to say whether this represents an altered claims trend”.

Gard is a shipowner-controlled provider of P&I, marine and energy insurance products. It has more than 650 staff in 13 offices around the world. The direct insurance entities within the Gard group are Gard P&I (Bermuda) Ltd, Assuranceforeningen Gard, Gard Marine & Energy Ltd and Gard Marine & Energy Insurance (Europe) Ltd.

Looking ahead, Roppestad said that “with geopolitical tensions running high, the war in Ukraine well into its second year, and wide-reaching sanctions enforced across several jurisdictions, there is little doubt that running a global business has become increasingly challenging. Looking ahead, we should all prepare for continued turbulence. There will likely be more sanctions, more fragmentation of world markets, and more disruptions to global trade.”

He also warned that inflation had added another hurdle to the picture, increasing the risk of higher operational costs both for the maritime industry and for insurers.

In P&I, gross earned premium was $324m, with claims incurred totalling $220m. Gard said that its own claims were below expectations, but that it had seen “somewhat higher-than expected adjustments to previous policy years’ claims from other International Group Clubs”. The technical gain in P&I was $14m, with a combined ratio of 95% (ETC basis). The 5% OGD (owners’ general discount) reduced the technical result to $2m, giving a CR of 99%.

For Marine & Energy, gross earned premium was $235m, with claims incurred totalling $163m. Claims development for marine was higher than expected, due to a pair of larger claims. Energy claims were lower than anticipated. The technical result for Marine & Energy was a loss of $10m, with a combined ratio of 105%. Gard noted that its result in 2022 for Energy had been “record-breaking”, and that the loss in this half “just goes to show the volatility of Marine & Energy insurance”.

$000s01.01.23 to 30.06.2321.02.22 to 30.06.22****
Gross earned premium*546,642398,457
Earned premium for own account432,110307,651
Other insurance related income3,151402
Claims incurred for own account**383,105210,790
Operating expenses60,01840,741
Technical result(7,863)56,522
Non-technical result***54,275(135,136)
Combined Ratio ETC basis99%79%

*Gross earned premium include a 5% Owners General Discount for the P&I business forthe half year to 30.06.23 and for the period to 30.06.22.

** Claims handling costs’ share of Operating expenses are included in Claims incurred for own account.

*** Taxation and Other comprehensive income/(loss) are included in Non-technical result.

**** As from 31 December 2022 the financial year was changed from a divergent financial year, running from 21 February to 20 February, to a financial year that coincides with the calendar year. Due to this, there are two 2022 financial years, one running from 21 February 2021 to 20 February 2022, and one running from 21 February 2022 to 31 December 2022.

Due to the change of financial year, the 2022 numbers cover a shorter period (21 February to 30 June 2022) than do the 2023 numbers, running from 1 January to 30 June.