North P&I Club Retains S&P 'A' Rating and Stable Outlook for 11 Years

Leading ratings agency Standard and Poor’s (S&P) has reaffirmed North P&I Club’s ‘A’ credit rating and stable outlook for the eleventh consecutive year. The agency says its rating reflects the 180 million GT Club’s continued strong competitive position, strong capital and earnings, robust risk management and conservative reserving practices.

S&P analysts Tufan Basarir and Peter McClean confirm that North’s merger with Sunderland Marine in February last year supports its already strong market position. ‘A combined North and Sunderland Marine has a strong competitive position in our view, mainly stemming from North’s strong market position within the International Group of P&I Clubs. We believe this is supported by Sunderland Marine’s niche business and geographical diversification.

‘In our opinion, North and Sunderland Marine combined have strong capital and earnings, supported by very strong capital adequacy which we anticipate will be sufficient to support organic growth over the next three years.’ S&P also notes that North’s risk profile is improved by, ‘its less-volatile operating performance than its peers over the long term and the diversity of its investment portfolio.’   According to the analysts, ‘There is widespread, robust, and embedded assessment and management of risk within the Club.’ They say underwriting reflects the inclusive nature of the Club’s risk management, with ‘enhanced and extensive’ reviews of individual members underpinning renewal strategy. North’s estimating and reserving practices are also considered ‘very conservative’ by insurance industry standards. ‘Consequently, we consider it unlikely that the company will experience losses that exceed its risk tolerance.’

S&P concludes, ‘North has a track record of diligent strategic planning, consistent strategy, strong execution, and positive financial management with conservative risk and financial standards. In our opinion, the experienced management team at North has successfully improved its market position and delivered good profitability. In addition, the latest merger has introduced some diversity to the company, while ensuring that serving members’ needs remains central to the company’s strategy.’

Responding to S&P’s comments, North’s chairman Pratap Shirke said, ‘I am very pleased we have retained our ‘A’ credit rating and stable outlook for an eleventh consecutive year.  It has further endorsed the benefits of our merger with Sunderland Marine, which has given the North Group enhanced financial stability for members, a greater diversity of products, continued service excellence and a stronger competitive position. We can now service the needs of the entire marine spectrum, from small fishing vessels to the largest ships.’

ENDS

For further information contact: Alan Wilson or Paul Jennings +44 191 232 5221

Notes to editors

North, part of North Group, is a leading marine mutual liability insurer providing P&I, FD&D, war risks and ancillary insurance to 130 million GT of owned tonnage and 50 million GT of chartered tonnage. It is based in Newcastle upon Tyne, UK with regional offices in Greece, Hong Kong, Japan and Singapore. The Club is a leading member of the International Group of P&I Clubs (IG), with around 13% of the IG’s owned tonnage. The 13 IG clubs provide liability cover for approximately 90% of the world’s ocean-going tonnage and, as a member of the IG, North protects and promotes the interests of the international shipping industry. In February 2014 North completed a merger with Sunderland Marine, which operates within North Group as an independent regulated insurer guaranteed by North. Sunderland Marine is a leading insurer of fishing vessels, small craft and aquaculture risks. It is based in Durham with offices in Australia, Canada, the Netherlands, New Zealand, South Africa and North America.