Skuld has announced that for the first six months of its 2022/23 financial year ending February 20, 2023, it posted a positive bottom-line result of US$18 million – a “significant” improvement from the same period in 2021/22, which was a negative US$24.9 million.
The marine insurance provider said that the result was primarily driven by a positive technical result, as well as a considerable investment contribution from the sale of Asta.
According to Skuld, the half-year technical result totalled US$12.1 million, with an overall combined ratio at 95%. Gross premium and calls increased by US$27 million to US$228.1 million, compared to the same period last year; growth in both the mutual and commercial lines of businesses were noted. Skuld also highlighted that the half-year had a “benign large-claim environment” compared to the same period last year, so no new large claims were reported to the international group pooling system.
Net investment income for the period contributed negatively, with a return of -2%. The company explained that the war in Ukraine, energy shortages in Europe, and high inflation have all created volatility, shifted yield curves considerably upwards, and reduced the value of most asset classes. It was also mentioned that the strengthening of the US dollar impacted the investment portfolio negatively.
Skuld’s sale of its shareholding in Asta, which closed in July, helped to mitigate the unrealized loss during the period, the company stated.
“We are pleased with this six-month result, which sees an impressive reversal from the same period last year,” said Skuld president and CEO Ståle Hansen. “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.”
But while the first half-year results were positive, Hansen also cautioned that, realistically, the insurance and investment environments were still “extremely challenging.” The chief executive pointed out that due to the threats imposed by the war in Ukraine, high energy costs, and inflation, it becomes all the more important for Skuld to be mindful of the need for “sensible pricing, selective underwriting and very close working relationships with all of [its] members and clients.”
