Newspaper article The Journal (Newcastle, England)

Merged Insurers Grow Combined Income 39.5%; INSURANCE

Newspaper article The Journal (Newcastle, England)

Merged Insurers Grow Combined Income 39.5%; INSURANCE

Article excerpt


THE merger of two of the region's longest-established marine insurance firms has steered the group to insurance premium income of $530m - growth of 39.5%.

Newcastle's North of England P&I Association North (NEPIA) merged with Sunderland Marine Mutual Insurance last year in a deal which created the North P&I Club, the biggest global firm of its kind.

Founded in 1882, Sunderland Marine has grown to become a world leader in insurance of commercial vessels, operating in markets across the world including Australia, Canada, New Zealand, South Africa and beyond, NEPIA, meanwhile, was established more than 150 years ago and focuses on insuring large ships such as freighters with offices around the world.

A strategic alliance was formed between the two in 2012, allowing the firms to bring in business for each other through their global network of contacts - and this was formalised through last year's merger. The two firms, which employ 270 between them, have now come together under one roof on Newcastle's Quayside, and latest accounts for the combined group, for the year ended February 2015, have demonstrated the combined power of the firm, having grown its insurance premium income from $380m (PS234m) to $530m (PS339m).

Meanwhile, the firm's free reserves topped $338m (PS216m) - an 8% increase on the previous year's $312m (PS199m).

Directors at the firm said the growth came despite operating in a volatile industry and seeing a large number of high-value claims, leading to an underwriting loss of $28.3m (PS18.1m), and a pension deficit charge.

The firm said it typically receives around six large claims - more than $1m - over the course of the year, but this year they dealt with 50, the highest number for five years, which amounted to $140m (PS89.6m).

Market yields of 'AA' rated corporate bonds also fell to an to all-time low, meaning the firm had to absorb further deficits totalling $23.9m (PS15.3m) from its defined benefit pension schemes.

Paul Jennings, joint managing director, said over the winter period there were several big cases involving ships which made the news, including car carrier Hoegh Osaka which ran aground in the Solent near Southampton and a fire which broke out on the Italian car ferry the Norman Atlantic, sparking a mission to rescue passengers. …

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