Marine insurance provider Skuld has announced a positive bottom-line result of US$25 million (approx. £17.8 million) for its 2020/21 financial year (which ended Feb 20, 2021) and a total combined ratio of 108%.
The result was driven by a significant return on investments (9.8%) and a strong level of performance from all commercial marine insurance products, including hull. The underlying performance of the mutual portfolio remains a challenge that will continue to be addressed by the industry, Skuld said.
The largest material impact in relation to the result was the performance of the pool, both for claims occurring in 2020 and prior-year deteriorations. No pool claims were reported by Skuld during 2020. The COVID-19 pandemic also negatively impacted Skuld’s claims performance, with a significant increase in claims activity for people claims, as well as a spike in FDD claims activity.
Skuld’s contingency reserves stand at US$459 million.
“At the end of an unprecedented and challenging year, I am very pleased with the positive result, and that we have kept the high levels of service for which Skuld is renowned,” said Ståle Hansen, president and CEO of Skuld. “Skuld remains in a very robust financial position, as reflected by our contingency reserves. The 2020/21 P&I renewal, handled almost entirely digitally, saw Skuld cross the mutual gross tonnage mark of 100 million. Also, we increased our market share across all other lines of business, demonstrating again the success of Skuld’s diversification strategy.”
Hansen also noted that mutual premium levels were still unsustainable, and were not currently yielding a positive technical result.
“We will continue our strategic avoidance of imposing a general increase, but will retain our individual approach and seek selective, performance-based increases to bring our mutual business back into balance during 2021/22,” Hansen said.
Hansen said the company’s long-term investment strategy remained conservative, “which is proven to handle extreme volatility.”
“I have to express my appreciation to everyone who has contributed positively during the COVID-19 pandemic,” Hansen said. “Our focus has continued to remain on keeping our service levels high. I am proud of the efforts and spirit that our members, clients and staff have maintained during this unique year. Skuld has a very strong platform for further growth, and we look forward to approaching our 125th anniversary in 2022 as a modern and future-oriented world-leading marine insurance provider.”