Skuld relies on investment income

Nov 15 2019

At Skuld’s Board meeting in London on 6th November, 2019 it was noted that the first six months of the 2019/20 policy year showed a small surplus.

However, this was only as a result of investment income.


The mutual underwriting performance showed a combined ratio of 112%, driven by an increased number of larger claims from members, an increasing level of attritional claims, and a notable increase in pool claims activity within the International Group of P&I clubs.


After benign premium movements over a number of years, current premium rates are not sustainable and do not adequately support either attritional or large claims exposures, Skuld said.


While Skuld said that it continued to have a clear focus on underwriting business in a balanced manner, as reflected in the ability to produce a positive combined ratio for the past 16 years, a meaningful contribution to Skuld’s strong capital position has been derived from investment returns.


In order to protect Skuld’s financial standing and to ensure the long-term sustainability of the mutual portfolio, the Board has directed management to adequately address the challenging underwriting performance during the upcoming renewal negotiations.


All deductibles below $25,000 will be increased by $2,500 and RDC/FFO deductibles will increase to $50,000.


The International Group Excess Reinsurance will be adjusted after new reinsurance rates have been agreed.   


The release call for policy year 2020/21 was set to 15%, while previous years remain unchanged. The applicable release calls are:

2017/18 = 3%.

2018/19 = 7.5%.

2019/20 =15%.

2020/21 =15%.


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