Standard Club and Strike Club to Merge
The London-based marine insurers the Strike Club and the Standard Club have announced plans for the Strike Club to join the Standard Club group.
According to a press statement Strike Club will continue as a member-controlled dedicated mutual delay insurer, operating as class of Standard Club and supervised by existing board.
Both mutual insurers are managed by companies within the Charles Taylor group.
The Standard Club will create a new Strike class in each of the Standard companies, into which The Strike Club business would transfer. There will need to be minor changes to The Standard Club’s Byelaws, and to the Articles of the subsidiary companies (Standard UK, Asia, Ireland and Re), to give effect to this, it said.
These changes will need members’ approval. The Strike Club proposes to amend its own Articles to pass control to Standard. Regulatory approvals will need to be obtained for the changes proposed.
The transaction is expected to take place on 20 February 2019. There would then be a transition period during which The Strike Club’s Luxembourg insurance company would continue to be the insurer, pending transfer of the insurances to Standard Club entities at the following renewal.
"There are potential risks to The Standard Club from this proposal, including underwriting losses (The Strike Club has suffered underwriting losses in some recent years, but the club has a strategy to restructure and improve underwriting, and this will be more easily achieved within The Standard Club); restructuring may reduce the scale of the business; historic claims reserves may prove to be insufficient (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," said the statement.
The Standard Club is a specialist marine and energy insurer and member of the International Group of Protection and Indemnity clubs owned by its shipowner members and controlled by a board of directors drawn from the membership.
The Strike Club is the leading provider of delay insurance to ship owners and operators and has been serving its members for over 60 years. It is a small specialist insurer, a mutual owned by its members and governed by a board of shipowner members.