Norway-based marine insurer and mutual P&I Club Skuld has reported a loss of $24.9m for the first six months of its 2021/22 financial year to February 20th 2022, compared with a loss of $14.5m for the same period in 2020/21.
Premiums and calls rose to $201.1m, from $190.0m. The balance carried forward from the technical account was a loss of $54.1m, compared with a loss of $25.5m in H1 2020/21. The loss was mitigate by a tax benefit of $12.5m, compared with a bill of $3.3m in the first half of last year.
Investment returns were also up slightly, to $16.7m, from $14.3m.
President and CEO Ståle Hansen said that widespread marine insurance premium increases during the past year had not yet been sufficient to carry Skuld to a positive six-month result.
Rising insurance premium rates in commercial lines were the main contributor to the $11m increase in premium income, but Hansen said that Skuld’s mutual book of business also delivered premium growth.
The negative technical result, which represented a combined ratio of 127%, was driven by an increased number of large claims. Some of these were pool claims from the International Group. “But we also suffered our own claims, including one which we ceded to the pool”, said Hansen.
Net investment returns of 1.1% partly offset the technical loss.
While the value of Skuld’s holdings in developed equity and private markets continued upwards after last year’s shock to the global economy, higher mid-term bond yields and the strengthening US dollar reduced the positive impact of gains in other asset classes.
Hansen said that he remained “strongly optimistic about its long-term support of Skuld’s renowned services to members and clients”. That said, Hansen noted that “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”.
Hansen concluded that “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”.