Non-Skuld pool claims negatively impact half-year result

Skuld ended the first six months of the 2020/21 policy year with a loss of $14.3m, compared to a gain of $2m for the same period last year.

The half-year technical result yielded a loss of $25.5m. The combined ratio was 115%, up from 112% for the same period last year.

Skuld said that the main drivers behind the negative result were increased pool claims and Covid-19 related claims within the cruise industry at the beginning of the year. “However, we continue to see positive contributions from our commercial operations, including Offshore, Hull, Charterers and FDD”, noted CEO and President Ståle Hansen.

While Skuld reported a relatively low number of claims in the period, none of which were large enough to involve the IG Pool, Skuld noted that other clubs in the IG incurred some significant losses. This had seen the volume of pool claims at its highest for some time. Skuld also observed that this impact was exacerbated by the fact that very few of the pool claims triggered the IG reinsurance programme.

Skuld’s share of pool claims affected its result negatively by $37m.

Net investment income for the period was 3.2%. Equities recovered quickly after the dip in March. Bonds with long duration, as well as open currency exposure on some assets, also helped the overall portfolio.

Skuld confirmed that the transaction with The Riverstone Group for the sale of Lloyd’s Syndicate 1897 had obtained regulatory approval and the effect of the sale was reflected under investment income.

Hansen said that “our focus now is on rectifying the performance of our mutual book of business for the next policy year. Thus far we are optimistic about an improvement in the second six months as Skuld continues to attract quality tonnage and enjoy the benefits of a successful diversification strategy.”

Consolidated income statement as at 20.08 ($m) 2020  2019
Premiums and calls 190.0 186.2
Reinsurance premiums -21.4 -24.3
Premiums for own account 168.7 161.9
Pool claims -37.2 -10.4
Own claims for own account -124.8 -130.4
Claims incurred for own account -162.0 -140.8
Acquisition costs -25.7 -34.5
Administrative expenses -6.4 -9.7
Net operating expenses -32.1 -44.2
Balance carried to non-technical account -25.5 -23.2
Net investment income 14.3 26.6
Taxes -3.3 -1.4
Balance carried to members’ funds -14.5 2.0

Meanwhile, at the Skuld AGM on September 3rd:

Norway-based marine insurer Assuranceforeningen Skuld held its annual general meeting on September 3rd in Oslo.

The Financial Statements of the Association for the year ending on 20 February 2020 were approved.

The AGM decided to close the 2017 policy year without supplementary calls.

2018 Policy Year: The year will be kept open until 2021.

2019 Policy Year: The year will be kept open until 2022.

Release Calls (applicable as of September 3rd 2020)

2017: Closed

2018: Release call reduced to 7.5%

2019: Release call reduced to 10%

2020: Release call maintained at 15%

The following persons were elected as new members/members for a one-year period until the Annual General Meeting in 2021:

Nils Otto Bjørhovde, Saga Shipholding (Norway) AS, Hong Kong / Norway

Byoungil Kang, G2 Ocean, Bergen, Norway

Synnøve Seglem, Knutsen OAS Shipping AS, Haugesund, Norway

Michael Ippich, Hartmann Schiffahrts GmbH & Co. KG, Leer, Germany

The following persons had resigned from the Members’ Committee:

Achim Boehme (Skuld sent deepest condolences to his family), Lomar Shipping, Bremen, Germany

Li Hua, Sinotrans Shipping Hong Kong Ltd., Hong Kong