Members of two of the traditional, old-line UK P&I industry clubs cleared the way for potentially one of the most significant mergers in the history of the industry. In separate meetings on May 27, members of the North P&I and Standard Club each greenlighted the merger that would create a mega-insurance player better prepared to take on the future of the industry.
In what is a very traditional industry dominated by approximately a dozen large players, analysts point out this is one of the first voluntary combinations not brought about by immediate financial pressures. The protection and indemnity sector (P&I) has been challenged in recent years by ever-increasing large claims. Recent record claims have stained the finances of many of the clubs and as ships grow larger the prospects are for further growth in the size of the claims.
The mega-merger to create NorthStandard would create a market-leading global marine insurer and one of the largest providers of mutual cover in the maritime industries. Analysts have forecast that it could also be the beginning of an overdue consolidation in the sector.
Announcing the results of the two meetings today, the executives of each company said members “resoundingly” backed the plans to combine the two organizations. The companies disclosed their plans for the combination in March 2022 saying it was an opportunity to create one of the most influential P&I clubs which would be able to diversify its product range while benefiting from economies of scale and global reach.
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