North P&I and Standard Club Make Plans for Insurance Mega-Merger

North P&I and Standard Club are negotiating the terms of a merger that would create one of the largest mutual cover providers in the maritime industry. The combined club would provide coverage for approximately 400 million GT of vessels.

Source: Maritime Executive | Published on March 15, 2022

A fully stocked cargo ship heading out to sea.

“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 of Standard Club.

North's chairman, James Tyrrell, highlighted the opportunity to create a mutual insurer with greater financial resilience, capable of weathering "a changing and sometimes volatile maritime sector." The combined insurer would have a larger capital buffer, which would exceed regulatory requirements.

Both insurers have obtained board approval and notified their respective regulators. A working group is examining the details of the merger, and any final agreement must be approved by the insurers' full membership as well as all relevant regulatory agencies. The timeline calls for a vote in May and the merger to be completed by the end of next February.

"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," said Paul Jennings, CEO of North.

In recent years, the marine insurance industry has been tested by a flood of exorbitant claims, fueled by mega-ship disasters such as the Maersk Honam, Golden Ray, and Ever Given. Insurers are under pressure from a classic quandary: they must raise premiums to ensure the strength of their balance sheets while keeping them low enough to remain competitive.