Global shipping and marine insurer, North P&I, has entered formal discussions for a proposed merger with fellow mutual Standard Club in a link-up which would create one of the world’s largest maritime insurance groups, with a joint premium income of US$800M and assets of US$2BN.

The proposed new entity – which would be called NorthStandard – would have a combined 300 years of shared heritage and experience and would insure ships equivalent to 400m gross tonnage (GT) – or one in five of the world’s ocean-going vessels.

Paul Jennings, CEO at North P&I said: “This is a real merger of equals.

“North and Standard Club have a shared outlook, a shared business strategy, and a strikingly similar culture, which makes this merger the natural next step in our evolution.

“There’s no doubt that the maritime industry is facing a number of challenges, from sustainability to digitalization, but by standing shoulder to shoulder, North and Standard Club are taking control of our destiny, creating one of the world’s leading and most influential P&I clubs.”

Mr Jennings and Standard Club Chief Executive Jeremy Grose will jointly lead NorthStandard in a shared executive structure.

North will retain its headquarters on Newcastle’s Quayside, with Standard Club to remain in its London premises. Both Clubs have global offices with a combined workforce of 700 people.

The proposed arrangements will enable the new club to enhance its reach across the world, drawing upon North’s rich history in the North-East and further cementing Newcastle as a hub for maritime insurance expertise.

Paul Jennings said: “With a number of successful mergers in our recent history, including with Sunderland Marine in 2014, we at North have a full understanding of the range of benefits available to members from a well-planned and well-executed union.”

Jeremy Grose, Chief Executive of Standard Club, said: “Combining both clubs will provide greater financial resilience, efficiency and an even deeper pool of talent – in both Newcastle and London – to maintain and strengthen the focus on service excellence and close member relationships for which both clubs are renowned.”

Initial merger discussions between North and Standard started in summer 2021.

The formal merger proposal 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 maximise 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 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 completed by 20th February 2023.