Protection & Indemnity Clubs
Marine Mutuals North P&I, Standard Club in Merger Talks
If approved by the membership, the formal merger of both clubs is expected to close by Feb. 20, 2023.
- David Pilla
- May 2022
Marine mutuals North of England Protecting and Indemnity Association and Standard Club Ltd. said they are in formal merger talks with a view to creating one of the largest marine mutuals worldwide.
The merger would create a global marine insurer that can thrive amid the challenges of digitalization, recruitment, regulation and sustainability, the insurers said in a joint statement. The combined club's capital strength would allow reinvestment in member services, technology and more tailored and sustainable solutions for the longer term, the companies said.
Announcement of the merger talks follows approval of the proposal by the boards of both clubs and notification to regulatory authorities of their intention to merge. A joint North and Standard Club working group was appointed to evaluate how a combined entity would maximize value for members, the companies said.
The combined mutual insurer would provide cover for vessels equivalent to 400 million gross tonnage, the companies said.
The proposed merger must be approved by the full mutual membership of both clubs and of regulatory authorities, the companies said. Member voting procedures are anticipated to conclude by the end of May. If approved by the membership, the formal merger of both clubs is expected to close by Feb. 20, 2023.
“Standard Club and North now have the opportunity to create one of the world's leading and most influential P&I clubs, founded on exceptional service and innovation, a broader diversified product range, scale economies and global reach,“ said Jeremy Grose, chief executive officer, Standard Club, in a statement.
“The merged club would maintain an unwavering commitment both to member service and to the International Group (of P&I Clubs) system and offer marine insurance products, services and solutions relevant to the broadest range of shipowners worldwide,” said Grose. “Acting as a powerful voice for shipowners and their best interests, the merged club's market-leading knowledge and deep technical insight would focus on supporting the changing needs of shipowners.”
“With stronger financial resilience, the newly created club would be well positioned to thrive in all conditions,” said James Tyrrell, chairman, North P&I, in a statement. “In a changing and sometimes volatile maritime sector, North's board has long recognized the potential value arising from considered and balanced consolidation in P&I. Choosing the right partner is the first critical step toward success.”
“With a number of successful mergers in its recent history, North has a full understanding of the range of benefits available to members from a well-planned and well-executed union,” said Paul Jennings, CEO, North P&I, in a statement.
Based in Newcastle upon Tyne, England, North P&I provides marine insurance to more than 250 million gross tonnes of owned and chartered tonnage, the companies said. Through its Sunderland Marine brand, North also provides cover for fishing vessels, small craft, aquaculture risks and owners' fixed premium.
North is a member of the International Group of P&I Clubs with more than 12% of the IG's owned tonnage.
The 13 IG clubs provide liability cover for about 90% of the world's ocean-going tonnage, the companies said.
Standard Club insures about 10% of the world fleet, including bluewater vessels, coastal and inland operators, and specialist offshore vessels, the companies said. It also offers other services such as war risks, and strike and delay, a primary business interruption cover that protects a shipowner or charterer when their vessel is held up by strikes, port closures, collisions, breakdowns and other unexpected delays.
Six marine insurers earlier launched an initiative they say will provide transparency on carbon emissions and support the shipping industry's green transition.
Neither North of England Protecting and Indemnity Association nor Standard Club Ltd. is rated by AM Best.