Mediterranean Shipping Co (MSC) could be one of the main movers again at this February’s protection and indemnity insurance renewal.
Last year, it parted with the West of England P&I Club. This year, it is understood the Geneva-based shipowner is working on a plan to move some ships out of the North P&I Club ahead of the mutual insurer’s intended merger with the Standard Club.
The newly formed NorthStandard will open for business immediately after the 20 February renewal.
MSC currently has ships entered with both clubs and, when the two mutuals become one, it faces having close to half of its fleet in NorthStandard.
Traditionally, MSC has split its giant 750-ship fleet among four P&I clubs: the North P&I, the Standard, the West of England and the UK P&I Club.
However, after its split from the West of England in February 2022, most of its fleet was placed with just three clubs, which will be reduced to two following the merger.
It is understood the idea is to move some of its ships from the North P&I while retaining the Standard entry under the new NorthStandard.
MSC is looking for a new club at the renewal and market sources suggest Britannia P&I Club will likely benefit from the tonnage movements.
From the North P&I and Standard’s perspective, MSC could account for up to 20% of the merged NorthStandard’s entered fleet, which may be regarded as over-exposure to one client.
“This looks like it’s a sensible move for all parties,” one broking source said. “The really big fleets don’t just sit with one or two clubs, so it makes sense for MSC to look for another partner.”
NorthStandard could also see the departing MSC tonnage quickly replaced by its huge newbuilding programme.
MSC currently has 80 ships on order, which are likely to be the subject of intense competition between P&I clubs over the next two to three years.
Both the North P&I and the Standard are asking their members for a 10% general increase at this year’s renewal.
The prospective move raises questions for other shipowners with a foot in both the North P&I and Standard camps.
AP Moller-Maersk positively supported the merger between the two clubs but may feel it also needs to reshuffle its cover to maintain a spread of mutuals. Greek tanker giant Dynacom is also a member of both clubs.
The NorthStandard merger is set to create a P&I giant that will potentially rank as the largest club, with a combined mutually owned fleet currently amounting to 289m gt. This compares to Gard — the current industry leader — with 271m gt on its books.
However, Gard has a more extensive book of marine and energy business lines outside its main mutual P&I business.
The Norwegian insurer also has $1.2bn in free reserves compared to a combined $743m at the NorthStandard.
MSC and the North P&I have been contacted for comment.