Tysers and Gallagher individual club summaries: Skuld

In the recently published reports on the Group P&I scene, brokers Gallagher and Tysers both issued commentaries on the individual Group Clubs. IMN has, for the purposes of brevity, to report the two brokers’ commentaries into a series of articles, one per club. In alphabetical order, we come to:

Assuranceforeningen Skuld

Self-Managed

Gross Tonnage

Owned 91,800,000
Chartered N/A

Free reserves

2019 452,723,000
2018 442,026,000
2017 394,075,000
2016 348,230,000
2015 335,195,000
Standard & Poor’s Rating A

Tysers observed, in what might be seen as a double-edged sword of a compliment, that “Skuld does have its critics within the P&I market but we do like their clear and decisive, hungry shark-like approach to business”.

Skuld has an enviable record for a mutual in having had a near-to, but under, 100% combined ratio for 16 consecutive years. This year the mutual business ran at 101% and the fixed commercial business produced 95%, resulting in an overall 98% ratio, and supporting the statements of CEO Stale Hansen that the commercial arm worked to keep rates lower for the mutual’s members.

The investment return was $1m, helping free reserves to grow by $11m to $453m.

Owned tonnage and chartered premium remained flat at 92m gt and $51m respectively.

Premium income declined by $11m to $402m, while net retained claims fell by $7m to $245m.

The 2018 policy year claims developed in line with expectations and included two claims on the Pool, which is the norm.

Tysers observed that for Skuld “overall, it was a pretty flat but stable year – something many other Clubs would have cherished”.

Skuld decided to cease underwriting at its Lloyd’s Syndicate 1897 from July 1st 2019, and to write its commercial business on Skuld corporate paper.

Underwriting of the hull and offshore business continues via the Skuld UK office in London and the SMA office in Oslo. The run-off of the Lloyd’s syndicate will be carried out in house by Skuld.

The Club has said that that “this consolidation creates transparency and clarity for shipowners and will offer both improved operational synergies and coordinated hands-on service”.

Tysers noted that it had previously expressed doubts as to the viability of Clubs running profitable business under the Lloyd’s umbrella. It therefore endorsed Skuld’s decision

Hansen said that, while claims levels continued as anticipated, he warned that the severity of large claims generally had increased, and premium rates must rise to maintain the stability of the market.

Gallagher noted that 2018/19 saw the first application of Skuld’s Members’ performance bonus in respect of the 2017/18 policy year. This was allotted to qualifying Members with positive records in October 2018, as part of a total $9.58m distribution to Members, including a 2.5% premium credit.

In Gallagher’s data concerning Skuld’s “return premium” the broker only included the premium credit, which is available to all Members.

Gallagher said that a review of the SFCR data suggested that much of this underwriting profit arose on domestic Norwegian business.

Tonnage by Vessel Type (Tysers)

Tankers 40%
Bulkers 35%
Containers 9%
General Cargo 8%
Other 8%

Tonnage by Vessel Type (Gallagher)

Tanker/Gas carrier 27%
Bulker 22%
Container/General Cargo 18%
Offshore 16%
Other 11%
Passenger/Ferry 7%

Tonnage by Area (Tysers)

Asia 41%
Nordic 25%
Europe (excl Nordic) 22%
Americas 7%
Other 5%

Tonnage by Area   Gallagher

Europe 49%
Asia-Pacific 27%
Americas 19%
ROW 5%
Year 2019 2018 2017 2016 2015
Calls/Premium 401,621 412,739 403,235 409,980 411,246
Reinsurance Cost 56,070 57,363 71,636 56,663 63,622
Net Claims (incurred) 244,577 251,580 229,143 243,276 259,057
Operating Expenses 92,937 92,224 88,510 87,971 87,781
Net Underwriting Result 8,037 11,572 13,946 22,071 786
Gross Outstanding Claims 875,663 925,721 617,049 583,921 555,116
Total Assets 1,040,143 1,070,091 1,000,465 918,602 903,704
Average Expense Ratio 12.80% 12.70% 12.80% 12.80% 12.90%
Solvency Margin 1.19 1.16 1.62 1.57 1.63
Reserves/GT Ratio $4.93 $4.73 $4.34 $4.24 $4.19

All figures are Group figures including all business lines, not just P&I.

All figures $’000