Norwegian marine insurer Skuld delivered a result of USD 20 million in the first nine months of the year, a USD 5 million increase from the same period last year. Overcapacity is still putting pressure on premium levels, says CEO.
Skuld president and CEO Ståle Hansen said: "After nine months the bottom-line ended at USD 20 million, which includes provision for a mutual members' credit of USD 5 million. This is a USD 11 million improvement since the six months figures and a USD 15 million improvement compared with the same period last year. Skuld's contingency reserves now stand at a record high of USD 354 million."
"Skuld's chosen path of diversification is bearing dividends and we are seeing a positive contribution from the commercial lines of business and a positive run-off on older claims years. These are all drivers for the positive bottom line result."
"For the mutual P&I line of the business we have seen stable growth in gross tonnage [GT]. The fierce competition for newbuildings continues. Although we have seen fewer claims in excess of USD 1 million this year compared with 2014, the pressure on premium levels challenges the ambition for a balanced result for the mutual P&I cover. The overflow of capacity in the insurance industry continues to put pressure on premium levels for the commercial products as well. However, a benign claims environment in 2015 has contributed to a strong performance from this line of business.
"Earlier policy years for Skuld 1897, our syndicate at Lloyd's, are developing positively and contributing to the positive bottom line.
"In spite of the volatile financial markets in 2015 net investment income has added a marginal positive contribution."
In November 2015, and based on Skuld's favourable 2015/16 underwriting result after nine months, Skuld announced a premium credit for mutual P&I members. The credit is guaranteed to be a minimum of 2.5% on the individual member's mutual P&I premium for 2015/16 policy year, with an opportunity to increase should the result improve further in the fourth quarter.
Hansen added: "A strong and financially healthy situation is a prerequisite for our operation. The other important element is service. The efficiency and responsiveness to our members' and clients' needs are what make Skuld a success. The ability to handle complicated casualties in the best possible way is where Skuld delivers added value. The investment we make in our people is essential as we continue our long term commitment to provide our members, clients and brokers with first-class service and competence they can rely on."