Marine P&I (protection and indemnity) insurance mutuals have long been facing challenging market conditions that have led observers to predict that further consolidation in the industry was likely. Today, two well-known players—North P&I and Standard Club—said they had entered formal discussions for a proposed merger to create a new global marine insurer and one of the largest providers of mutual cover in the maritime industries. With 300 years of shared P&I heritage, the combined mutual insurer would provide cover for vessels equivalent to 400 million GT.
They say the merger would help the new club navigate the continuing disruptive change affecting the maritime sector and better anticipate challenges ahead.
“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, CEO, Standard Club.
“The merged club would maintain an unwavering commitment both to member service and to the International Group system and offer marine insurance products, services and solutions relevant to the broadest range of shipowners worldwide,” he continued. “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 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 at North. “With histories which in 2022 add up to 300 years, the combination of these two unique advocates of mutuality, with their complementary cultures, ambitions and approaches, would build on the strengths of each club.”
“With stronger financial resilience, the newly created club would be well-positioned to thrive in all conditions,” said James Tyrrell, Chairman at North. “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,” he said. “Choosing the right partner is the first critical step towards success.”
The formal announcement follows the approval of the proposal by the boards of both clubs and notification to principal regulatory authorities of their intention to merge. A joint North and Standard Club working group has been appointed to evaluate how a combined entity would maximize value for members. The working group is following a structured methodology, allowing the case for a merger to be objectively explored and assessed by both clubs.
“The ambition behind the merger is to deliver tangible benefits to shipowners. The boards of both clubs have played a key role in guiding and shaping the proposal. Combining will provide greater financial resilience, efficiency and an even deeper pool of talent to maintain and strengthen the focus on service excellence and close member relationships for which both clubs are renowned,” said Cesare d’Amico, Standard Club’s chairman.
The proposed merger remains subject to the approval of the full mutual membership of both clubs and of all the appropriate regulatory authorities. 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 complete by February 20, 2023.