Oslo-based marine insurer Skuld has reported an $18m profit for the first half of this year following an improvement in its main hull and machinery and protection and indemnity markets.

In the same period last year, Skuld reported a $24.9m deficit.

The turnaround was also helped by proceeds from the sale of Asta, Skuld’s former Lloyd’s of London managing agency.

Skuld's combined commercial and mutual P&I business lines had a technical underwriting profit of $12.1m in the six-month period.

The P&I business improved its underwriting result, although it remained in deficit.

The majority of the underwriting profits come from its commercial insurance lines which have seen an improvement in rates.

Gross premium and calls increased by $27m, compared with the same period last year, to $228.1m with growth in both premium and tonnage from mutual and commercial lines of business.

Skuld’s mutual P&I revenue amounted to $111m and its commercial lines $117m.

Investment income however showed a negative 2% return.

Conditions in the P&I market have significantly improved this year.

Skuld’s improvement in earnings follows a similar upturn for the half-year period reported by the Swedish Club.

All the P&I clubs applied general increases at last February’s renewal to raise income.

High-cost claims are also down this year. There have also been no International Group of P&I Clubs pool claims — covering claims in excess of $10m — reported in the first half of this year.

Extremely challenging

However, P&I clubs still face difficulties from the impact of inflation on claims and poor investment returns caused by a dip in the global equity markets.

Skuld said it would continue efforts to bring the mutual P&I book back into balance through improved rates.

“We must be realistic; the insurance and investment environments are still extremely challenging, and with that in mind the threats imposed by the war in Ukraine and its political ramifications,” said Skuld chief executive Stale Hansen.

“High energy costs and inflation keep us ever mindful of the need for sensible pricing, selective underwriting and very close working relationships with all of our members and clients,”