The UK and Britannia protection and indemnity (P&I) clubs will imminently unveil plans to merge their operations to create what will be by far the biggest player in the specialist mutual marine market, Reactions has learned.
Rumours about such a deal have been in the market for several months, and it is understood the two parties have now reached an agreement that will see them combine their operations.
The boards of both clubs are now organising meetings to be held in April where members will be asked to give the greenlight to the proposed merger. Should the merger get the required signoff, then members can expect to benefit from improved economies of scale amongst other advantages.
If the merger is approved, then the managers of the two clubs – Thomas Miller which oversees the UK Club and Tindall Riley which operates Britannia – will also merge, Reactions understands.
The announcement comes just four days after the P&I market completed its renewal for the 2016/17 policy year, and according to a circular from broker Tysers, the merger is based on the preference of the two clubs to remain specialists in this specific sector of the insurance industry rather than diversify into other classes as Gard, Skuld and Standard have done in recent times.
Both the UK Club and Britannia are already among the largest of the International Group clubs, and presuming the merger goes ahead, it will create by far and away the largest member of the 13 operations. Presently, Gard is the largest of the 13 International Group clubs. The Norwegian carrier boasted owned membership of 189m gross tonnes (GT) as February 20, 2015, equal to 17.12% of the International Group’s total GT.
However, if the UK/Britannia merger is approved by its respective memberships, then the new entity will be the biggest within the International Group. As of February 20, 2015, the UK Club had owned membership of 127m GT while Britannia held 108.5m GT. Combined, the two clubs held 23.65% of the total owned GT within the International Group as of February 20 last year. The new entity will also hold in the region of 125m GT of chartered tonnage and hold free reserves that well exceed $1bn.