North and the Standard Club - A personal message from our CEO, Paul Jennings

Just over seven weeks ago now we announced an intention to merge with the Standard P&I Club. Standard being one of the larger leading P&I clubs in the International Group. Very simple: the reason for our desire to merge and consider that proposal is we believe bringing North and Standard together will create a more financially resilient, competitive, but also importantly service-driven and more efficient P&I club. Timing is always important. And for many years, as I think a number of people have known, North and our Board of Directors have considered whether consolidation, whether a joint venture, merger with another club or another partner would be appropriate for the club and for its members. But the most important thing is that we work with a partner and we find a partner who's appropriate for North and will actually provide benefits for North and for all of our members going forward. We believe Standard are the ideal partner for North. They're our partner of choice. I think the benefits for this merger can be very easily summarized in two areas: first one is the economic financial benefits, and the other is service benefits. On the economic financial side, the two clubs coming together will create a larger operation. We'll have the benefit of scale. We'll be able as a result of that to remove some of the volatility, some of the uncertainty from a financial point of view that exists within any insurance company. Now that will allow us also to actually buy reinsurance protection, which is a very important part of what we do, what Standard Club does, enable us to buy that in a more tactical and strategic manner. And that will allow us also to take more risk in areas where we have less volatility, and there are some significant savings to be made there. Now we've mentioned in the merger documentation that you will all have seen some modest savings in relation to reinsurance, and that's in line with our prudent assessment, but actually I think there are more significant savings to be made. They'll also have the opportunity to save in respective duplication of costs, areas where for example we have dual regulatory operations, significant savings could be made there. And also as we continue to grow, which will be the ambition for the combined club, as we continue to grow we'll be able to operate more efficiently and also effective savings in that area. Now the other great benefit I see is bringing together two clubs with very high levels of service and a philosophy to service. We're both known, both North and Standard are known and respected in the market for our service offerings, and bringing the two clubs together we actually want to create something that is better than both, not just best of both, better than both that we have at the moment. The vision we have for the combined club is the diversified marine insurer, not a monoline club. Both us at North and Standard have a policy, have a strategy of diversifying our business lines, and this will give us great complementary business lines which will be a benefit to all of our members in the marine sphere. Over the last seven or eight weeks since we announced the merger to all of our members, both myself and other colleagues have had the opportunity to travel and to meet with many of our members, and I'm delighted that the response has been overwhelmingly supportive. Members can see the benefits that this can bring. Something I've heard from members and also from other commentators, stakeholders, is around competition, and will this actually lead to less competition? Well, I actually believe apart from the fact this will reduce the number of clubs from 13 to 12, I actually believe this will create greater competition. I think it will start to correct what is possibly a lopsided position in the market at the moment between significantly large clubs and others, but I think also it will drive all clubs in the market to examine their operating models and to look to operate more competitively, and that's got to be a good thing for shipowners and for members. I'm passionate about North. I've worked for North for three decades now, and I'm supremely proud of everybody at North and the way we've developed over that time from a small club, small provincial club in the North East of England to being one of the leading clubs in the International Group. I think this merger will enable us to not only consolidate that position but to move further. The benefits of this merger will be coming through in years and decades. I think we're creating here a P&I club that is relevant and fit for the future needs of our members and the challenges our members will face in the coming years and decades. You should all now have received your member voting pack which contains proxy forms. Now for anybody who's not intending to be at the EGM on the 27th of May, I would encourage you to please complete proxy form. I would encourage you to vote in favor of all of the resolutions and particularly in favor of this merger. I hope to speak to many of you over the next couple of weeks as we head towards the EGM, but if in the meantime anybody has any queries, wants any clarification, please don't hesitate to contact me anytime. And I thank you all for your continuing support of North and for making us the leading club that we are today. Thank you.