Skuld reports positive result and “significant” year-on-year improvement for H1

Norwegian marine insurer Skuld has reported a gain of $18m for the first six months of its 2022/23 financial year ending 20 February 2023, a swing from the loss of $24.9m for the same period in 2021/22.

Skuld said that the swing back to positive territory was driven mainly by a positive technical result, together with a significant investment contribution from the completion of the sale of Asta.

The technical result reached $12.1m with an overall combined ratio of 95%. Gross premium and calls increased by $27m to $228.1m, compared with the same period last year. Skuld reported growth in both the mutual and commercial sides.

Skuld noted that H1 2022 was characterized by a benign large-claim environment compared with the same period last year. No new large claims were reported to the International Group pooling system for the first six months of 2022/23.

Skuld said that the positive six-month technical result was driven by positive contribution from Skuld’s commercial lines of business. Meanwhile the mutual book of business “delivered a combined ratio above target”.

Skuld said that the uncertain claims environment and the expected future impact of inflation on claims costs only served to confirm the need for continuous efforts to  bring the mutual book back into balance through improved rates.

There was a negative net investment return for the period – minus 2%.

Skuld said that the war in Ukraine, energy shortages in Europe and high inflation all served to create volatility, shift yield curves substantially upwards and reduce 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 unrealized loss during the period.

Skuld president and CEO Ståle Hansen said that “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.

However, he said that Skuld had to 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”.

Consolidated income statement as at 20 august 2022 ($m) 2022 (6 Months) 2021 (6 Months)
Technical account    
Premiums and calls 228.1 201.1
Reinsurance premium -34.3 -29.2
Premiums for own account 193.9 171.9
Pool claims  -16.7 -31.9
Own claims for own account -122.4 -156.8
Claims for own account -139.1 -188.7
Acquisition costs -32.8 -28.4
Administrative expenses -9.9 -8.9
Net operating expenses -42.7 -37.3
Balance carried to non-technical account 12.1 -54.1
Non-technical account    
Balance from technical account 12.1 -54.1
Net investment income -4.2 16.7
Taxes 10.1 12.5
Balance carried to members’ funds 18.0 -24.9