Marine insurance suffered under the consequences of the Covid-19 pandemic last year, when major damage claims and investment losses yielded a deficit for insurance firm Skuld.
A combination of large claims and losses on investments yielded a deficit of USD 15m for marine insurance company Skuld in the financial year /2022, which ended on Feb. 20. Skuld explains the year’s loss by referring to the negative consequences of the Covid-19 pandemic and an unstable financial market.
”Volatility and market fluctuations in the financial markets led to an investment loss not sufficient to cater for the overall cost of claims and the club’s underwriting result landed on USD -30 million,” reads a press release on the year’s result.
”Behind us lies another extraordinary year. The Covid-19 crisis has had many consequences for the insurance sector and ocean industries,” says Skuld Chief Executive Ståle Hansen in the release.
The relationship between damages and costs on one hand and premium income on the other – the combined ratio – came to 107%, which was an improvement compared to /2021, according to the statement.
When the combined ratio exceeds 100%, costs are higher than earnings. The loss is normally covered via income from investments, but Skuld was unable to ensure that last year.
In line with other mutual marine insurers, or P&I clubs, Skuld has entered agreements with its members on raising premiums this year in order to cover the larger damages that are especially due to the Covid pandemic, which has affected global shipping to an extensive degree.
As reported by WPO, Skuld is among the insurers that have recently opted to cease doing business with Russian tanker carrier Sovcomflot as client. The carrier is suffering impacts from Western sanctions due to Russia’s invasion of Ukraine.
