Stability in an Unstable World
With 126 years of industry experience behind it, Skuld, a world leading marine insurer, should have “seen it all”. However, global health crises, geopolitical unrest and the need for industry transformation are ushering in a new age, with new challenges. Here Ståle Hansen, Skuld CEO, discusses the need for calm heads, and ever closer collaboration, to ensure the industry stays on course.
“It was a case of out of the frying pan, into the fire,” admits Ståle Hansen, CEO at Skuld for eight of his twenty years at the Oslo-headquartered insurance giant.
“The pandemic, and all the claims associated with it, was starting to ease, shipping patterns were returning to near normal, and then the war in Ukraine started. As we all know, that ushered in human tragedy of inconceivable proportions, and a wave of necessary sanctions that quickly dispelled any sense of ‘business as usual’.
“It’s been a busy, and challenging, few years.”
Almost overnight, Hansen states, Skuld, which had a leading position with Russian shipowners, had to terminate long-standing relationships, while the impact on Skuld’s existing members was, in some cases, even more drastic.
A matter of Trust
“Suddenly we had members with vessels locked into Ukraine ports,” he explains. “The assets and cargoes are one thing, but the crews, and ensuring their safety, is another – that quickly becomes top priority.”
As such, the past year has seen specialist Skuld teams leveraging their industry expertise, networks and close relationships with other insurers to repatriate crews and release vessels, continually working to deliver on their company purpose statement (“Protecting Ocean Industries”) in the most challenging circumstances imaginable.
“There have been numerous, very complex situations,” Hansen notes. “Each vessel has multiple insurers, covering, for example, P&I, hull and machinery, war insurance, and the cargo, so that demands reliable, open and committed collaboration. And of course, if vessels are trapped for too long then the owners can claim a total constructive loss, which can lead to the insurers becoming shipowners.”
He smiles: “So, there’s a lot at stake. But we’re not exactly new to this. We know what we’re doing and make sure that all our stakeholders, from customers to the other insurance partners we work with, can rely on us.
“That trust is fundamentally important, and not just to our success, but to our values as a business.
“That is who we are, we are Skuld.”
And this is the essence of Hansen’s philosophy during today’s conversation.
He’s here to discuss Skuld’s decision to renew its role of ‘Leading Partner’ at Nor-Shipping 2023 (taking place 6-9 June in Oslo and Lillestrøm), but quickly segues to the event’s main theme this year, which is #PartnerShip.
“That is a very interesting choice,” he comments, “and it couldn’t be more timely. It’s one thing that it chimes with the way we work as a business, but, from a wider perspective, it’s how we NEED to work as an industry. You can see that in the issues we’ve just mentioned – global pandemics and conflicts – but it’s also intrinsically important to the challenges, and opportunities, we face in terms of sustainable development.
“No one can tackle such a changing, unpredictable landscape alone. We all need partners.”
As Hansen implies, Skuld already has them.
Partnership is at the core of Skuld’s business model.
The marine insurer, which employs around 300 people in 11 locations worldwide (including Japan, after a new office opening last year), operates as a mutual insurance association providing risk pooling, claims services, loss prevention and overall representation for its members. Those same members, which essentially own the business, elect a board and committee, which then appoint the executive management team, including Hansen.
“So, we’re not just a service provider,” the CEO explains, “we’re their business, or rather we are them. We work closely to understand one another and tailor our products for their evolving business needs. In fact, I think you could say we work even closer now, given the challenges we’ve faced. Some relationships get forced apart by difficulty, but I’m pleased to report the opposite in our case. Loyalty has never been higher.”
Interestingly, this way of working extends to interaction with other insurers. Skuld is a member of the International Group of P&I Clubs, an organisation of 13 ‘competitors’ that, together, provide liability cover for around 90% of global ocean-going tonnage.
“We share, that’s the cornerstone of the group,” Hansen says, adding: “And that means everything from knowledge to large loss exposures. Our aim is keeping this essential industry thriving, and we realise that is more important than individual competition. There’s a ‘greater good’ here – the future of shipping.”
Solving the Puzzle
The subject of the future brings us on to the environment.
Hansen is keen to point out that marine insurers have a vital role to play in shipping’s voyage towards a zero-carbon horizon, working with other stakeholders to ensure new solutions are adopted in safe, timely and successful manners, while sharing their decades of operational, business and risk expertise.
“We’re just one piece of the puzzle,” he notes, “but every piece must come together on a transition of this scale.”
Skuld is working within its industry associations – including the P&I Clubs and the Nordic Cefor group – but also individually as part of broader shipping initiatives. Amongst these are its commitments to the ‘Getting to Zero 2030 Coalition’ (which aims to launch commercially viable zero emission, deep sea vessels by 2030) and its insurance of the One Ocean Expedition, currently carrying out scientific analysis of the oceans.
In early 2022 it also became the first insurance firm to sign up to the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMC).
Reaching the Goals
“We’re onboard as a learning and advisory partner,” Hansen says of Skuld’s role as a ‘Mission Ambassador’.
He adds: “The core of this initiative, focused on maritime decarbonisation, sees major shipowners (many of which are our customers) working with energy providers, technology suppliers and other ocean stakeholders in a partnership that stretches right across, and beyond, the shipping value chain. It’s a powerful example of exactly the kind of collaboration required if we’re to reach our ambitious, and necessary, global environmental goals.”
Skuld, Hansen says, were the first insurer onboard and are contributing through assessing the risks that can arise from new technology, but also the potential benefits from a loss perspective.
“People are often too quick to focus on the challenges rather than the opportunities of decarbonising shipping,” he comments. “We see the potential for the journey towards zero carbon emissions, with, for example, less pollution and oil spills. With the right approach, there can be reductions in insurance claims and financial incentives to adopt zero emission technology. That’s going to be beneficial for everyone.
“We’re delighted to be onboard with this.”
As Hansen is for Nor-Shipping.
Putting People First
“You know it’s funny,” he says. “During the pandemic I think we worked closer than ever with our members. Without the time needed for travelling, and with the ease of conducting quick, digital meetings, we saw their faces more frequently, and collaborated really well.
“But you know what, we missed them!”
Despite the fact that the need for distancing brought everyone ‘closer’ in some ways, Hansen admits it was a “poor substitute” for the “natural connections” that are fostered by physical, face-to-face meetings.
“That’s why large-scale exhibitions and conferences are still so vital,” he states, “and especially Nor-Shipping where you have top decision makers, from right across the global ocean and shipping value chains in one place. It creates the ideal stage for sharing and learning from one another, not to mention building valuable new relationships.
“And that, of course, is key when it comes to business growth.”
But despite the challenges we all face, and the need for partnership to solve them, Hansen is keen to finish on one point that, now more than ever, can be easy to overlook.
“It’s also fun!” he smiles, mentioning his role (on the drums) in the ‘Nor-Shipping Band’ in 2022. “This is a people industry, and we can, unfortunately, lose sight of the social, enjoyable side sometimes when we’re so focused on pressing issues. Nor-Shipping is the ideal place to remind ourselves of that.
“I’m looking forward to partnering on some parties when it comes to June too – I think that’s something we all deserve!”