Marine insurer Skuld fell to its first negative technical result in 16 years as it’s combined ratio for the fiscal year hit 109%.
This negative development was driven by a number of mid-sized and large claims, as well as one-off costs associated with previous year closure of Skuld’s Lloyd’s syndicate 1897.
Skuld’s departure from Lloyd’s was part of a wider strategy to enhance its commitment to non-protection & indemnity (P&I) business and to streamline all of the company’s insurance offerings.
Elsewhere, Skuld recorded a positive bottom line result of $25 million for its 2019/20 financial year.
This was supported by particularly strong investment returns towards the end of the year.
Global investment market volatility favoured Skuld’s investments, with a return of 5.5%.
On the mutual book of business, the company said its technical result continued to show the clear need to bring premium levels into line with risk.
Skuld’s commercial marine liability, as well as Skuld Hull underwriting, also contributed positively to the overall result.
“At the end of a challenging 2019/20 financial year, I am very pleased with the positive result,” said Ståle Hansen, Skuld president and Chief Executive Officer.
“We remain in a robust financial position as reflected by our contingency reserves. The 2020/21 P&I renewal was firmer than in previous years and having witnessed a decade of rate depreciation driven by market competition and a well-capitalised P&I industry, we will continue to do our best to support members by offering competitive rates.
“However, our technical result shows the clear need to bring premium levels into line with risk.
“Our long-term investment strategy remains conservative, which is proven to handle extreme volatility although our results will be affected in the short term.
Hansen went on to reference the ongoing coronavirus pandemic, stating that Skuld’s focus has remained on “keeping service levels high and assisting members and clients in the best ways possible as well as keeping our staff and their families safe and well.
“Obviously, the circumstances call for a great deal more flexibility than the industry has perhaps ever needed before, and the global Skuld team is ready to accommodate our membership to ease their challenges.”
Skuld’s contingency reserves stand at $466 million.
