Profits dip at Skuld; it continues to pursue diversification strategy

Profits and incoming premiums dipped at marine insurer Skuld in the nine months to November 20 this year partly because of some big losses earlier in the year as the company’s CEO stressed its ambition to continue to pursue its diversification strategy.

The company posted an after tax profit (balance carried to the contingency reserve) of $16.1 million for the period, a decreased on the $20.2 million it made in the same period a year earlier.

Its premiums and calls for the period were $292.6 million compared with $308.5 million a year earlier. High levels of claims totalling $181.8 million meant a loss of $3.1 million was carried to its non-technical account but strong investment income contributed $19.7 million compared with $0.8 million a year earlier, resulting in a profit.

Ståle Hansen, Skuld president and CEO, said: “Strong financial markets contributed to a positive income on investments. Skuld experienced a few large claims earlier in the year which has caused a small loss on the technical result. However, it was an improvement compared with the technical result at the half year. The positive contribution to the contingency reserve brings the reserve’s total to $364 million.

“Net investment income ended at USD 20 million, mainly driven by strong equity markets. Net investment income is still significant but shows a deterioration compared with the six-month result. Expectations for higher interest rates have had a negative impact on the USD-denominated part of the fixed income portfolio. However, Skuld has a long-term investment strategy with a conservative approach, with the ability to absorb changing market conditions.”

Hansen added: “Skuld continues to pursue its diversification strategy and has acquired the SMA/Gerling Norway team and its portfolio of marine hull business. SMA/Gerling Norway will continue under the name Skuld Marine Agency (SMA) and the portfolio will begin to attach from 1 January 2017. The acquisition gives Skuld access to SMA/Gerling Norway's hull & machinery book of business, which covers around 6.000 vessels paying some USD 40 million in premium. Skuld’s priority remains to ensure that all customers and brokers experience the same excellent service.”