Marine insurer Skuld has revealed a half year bottom line result of £6 million ($8 million), down from £21 million ($29 million) in the same period last year.
A “small number of substantial claims” marked the six-month period ending August 20, Skuld said in a release today.
However, it added that the cost of those claims had been partly offset by the positive contribution from commercial operations which it said continues to produce a surplus.
The technical result at the half year point shows a negative outcome of £17 million ($22 million) and an overall combined ratio of 111%. Net investment income for the period ended at £23 million ($30 million), driven by strong equity markets and lower interest rates.
Further volatility is to be expected but its long-term conservative investment strategy places Skuld in a good position to absorb changes in the financial markets, the company said.
“Skuld’s diversification strategy continues to benefit members by reducing volatility, as Skuld’s commercial activities provided a combined ratio of 94%,” Ståle Hansen, Skuld president and CEO, said.
“Skuld is committed to maintaining high levels of support and service to members and achieving the right balance between premium levels, sustainable growth and financial strength. The volatile claims environment emphasises the importance of a sustainable premium rate to achieve a balanced result.”
The insurer said the positive bottom line result had boosted contingency reserves to a total of £305 million ($402 million). Skuld remains in a strong financial condition and was recently given a stable ‘A’ rating by Standard and Poor.
“Skuld will continue to reward members for their loyalty when the financial results allow for a distribution,” Hansen added. “For our mutual members, we will, as announced in 2016, show our commitment to them by offering a credit of 2.5% on the individual member’s premium for the 2017 policy year. The credit has been approved by Skuld’s Annual General Meeting and will be deducted from the November premium instalment. We are pleased that the strong financial performance last year enables us to give something back to our mutual membership.”
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