The Strike Club, a mutual provider of delay insurance, is to merge with the Standard P&I Club. Under the new arrangement the Strike Club, which will bring its assets and liabilities into The Standard Club, will continue as a member-controlled, dedicated mutual delay insurer, operating as a class of the Standard Club.
In absorbing the delay insurer, The Standard Club acknowledges certain risks arising out of underwriting losses suffered by the Strike Club in recent years. The chairman of Charles Taylor Mutual Management (Asia) Pte Ltd, managers of The Standard Club that there is a strategy in place to restructure and improve underwriting.
“Restructuring may reduce the scale of the business; historic class reserves may prove to be (although claims are short-tail and there has been robust actuarial analysis); regulatory and tax issues may impact the transfer of funds from the existing Strike companies; cost savings may be less than expected; and there could be greater than expected transaction costs and complications,” he said.
Fortunately there also appears to be a positive in that the Standard Club will be able to offer a wider range of covers, take on an additional 200 new members, further diversify the Club’s underwriting portfolio and risk profile, and increase solvency capital ratios.
Alain Le Guillard, president and chairman of The Strike Club, said: “Marine delay insurance provides valuable protection to ship owners and operators protecting them from delays outside their control. At a time when the shipping market is facing difficult market conditions and financial pressures, our cover can make all the difference between profit and loss on voyages for operators.
“Joining The Standard Club is an excellent move for the club. It will provide our members with long-term financial stability and S&P A-rated cover, while preserving the independence of operation, identity and other valuable mutual characteristics of The Strike Club.”
Cesare D’Amico, chairman of The Standard Club added: “This transaction is a win-win for members of both clubs. It increases our membership and enables us to offer valuable additional protection to members of The Standard Club. It extends our strategy of offering a wide range of insurance covers to our members and diversifying our sources of revenue. The Standard Club will also benefit from increased reserves from The Strike Club. I will look forward to welcoming the members of The Strike Club to The Standard Club.”
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