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Taking on tomorrow, together: Episode 1
Bonus Episode21st February 2024 • Alongside • NorthStandard
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‘Taking on tomorrow, together’ is a special mini-series within NorthStandard’s ‘Alongside’ podcast. 

In this episode, NorthStandard Managing Directors Jeremy Grose and Paul Jennings talk about the recent merger, review some of the achievements from NorthStandard’s first year (including recent renewal results) and look ahead to the next year and beyond.

Please note: this episode was recorded just a few days before the P&I renewal date of 20 February 2024.

Transcripts

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We're going to reflect on the merger, review some of the achievements from NorthStandard's first year, including the renewal results, and look ahead to the next year and beyond. Jeremy, Paul, welcome to you.

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[00:00:44] Paul Jennings: Yeah. Hi Kait. Nice to see you.

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[00:00:53] Paul Jennings: It's been a really successful year. Massively busy for, for everybody, myself included. I think Jeremy would probably echo that as well, but actually really exciting and I think we, we've achieved a huge amount during the year.

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[00:01:08] Jeremy Grose: It's been a busy year. A lot going on, huge amount of change, but I think we can say it's been a pretty good year. And we've had some extraordinary moments along that, the journey of, uh, the last 12 months, I think with, uh, the first of our board meetings in May with, uh, around about 60 ship owners sitting around the table and sharing views on matters related to the the club.

And that was a, a great moment.

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[00:01:42] Jeremy Grose: The reason it's worked so well? I think it's been because, mostly because people have put a huge amount of effort and work into it, but also because the two clubs were. So compatible, uh, from the outset, both in terms of the style and culture of the organizations and, and the approach that, that, that they took, uh, as, as separate entities, but also the type of business.

So while we've got a significant amount of business, which is in the mutual traditional P&I business, both clubs are absolutely committed to diversification and are areas of diversification. Matched up very well as well. So those have been, uh, you know, a, a really positive element that we've been able to bring the business together on the mutual side, but also on the specialty side, no overlap.

And, um, those, uh, areas of business have been extremely complementary.

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But equally, I think what is a real differentiator for us now is the. Quality and skills we've got within our specialty sectors. They really are a massively important differentiating part of door standard going forward, not just in terms of the volume of business, but actually the, the very unique skill sets that we have in each of those specialty divisions, whether it's our, our offshore team, our Hull and War teams, uh, it, it, it really is different to a number of other clubs.

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[00:03:28] Jeremy Grose: I suppose there's two key milestones that I'd, I'd point out. Um, I think first of all, the board meeting that we had with our members board in May was, was a great event. I think the next major milestone was the movement into our sectors, which we put in, in our new operating model, which, uh, came into play 1st of September.

Which set us up in preparedness for the renewal and, um, we're in the process of doing the renewal now, and it seems to be going pretty well.

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So not so much. Your milestone is, you know, really, really a, a great start to, to the rest of the year.

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[00:04:35] Paul Jennings: I think Kait, so far so good of the combined business. Now we've got roughly 80% of our business by premium renews at the 20th of February. That includes our specialty business and as well as, uh, our traditional blue water business as well. As we sit here today, we are significantly renewed. Very, very small proportion still to go.

Overwhelming support in terms of retention of business from our members and also new business joining us as well. So it's looking pretty good on from a technical point of view. Um, in terms of the financial position, it looks as if we will be producing an underwriting result that is below a hundred percent, and I think us probably in common with a number of other insurers this year will actually benefit from some investment income as well.

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[00:05:31] Paul Jennings: That's an interesting question. I think we, we know anecdotally at the time, we announced our coming together and, and this was kind of 11 months ahead of, you know, the formal legal merger happening. But we, we announced that we were beyond talks. We were actually going to get together. I. Uh, we, we know exactly around that time a lot of our competitors.

Started to talk, some people in the industry wondered whether us coming together would, would reduce choice. You know, we we're taking two, two companies with unique propositions and bring them into one. I think that's almost completely dissipated. I think as far as, um, commentators in the industry are concerned.

As far as other clubs, I don't know. It's not easy to bring two clubs together on the basis of a merge of equals. It's, it's, it's more challenging and, and there's gotta be an alignment of interests. And I think for both Jeremy and I, you've gotta be prepared to put egos out of the room whilst we do this and bring them together.

So it's not easy. I would be surprised in the future if there isn't some more amalgamation.

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[00:06:33] Jeremy Grose: I think that's been a, a really important part of, of, you know, the response that we've had has been the way in which ship owners have appreciated and, and expressed their appreciation for what they've received from NorthStandard as a new organisation. And I think the demonstrable evidence of that is in the, the extent to which members have supported us with new ships as they've acquired them.

And continue to grow entries, uh, with the club, which has been, you know, really fantastic level of support and very gratifying. Mm-hmm.

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[00:07:05] Paul Jennings: Yes. I think at, at the time of the announcement of the merger, I think brokers probably. I, perhaps they were looking at what impact it would have on them potentially reducing two strong organizations where they could place business in, into one, and what would that mean for them? But actually, I think as we've, as we've explained the position to them as we've been discussing, uh, what it means, what the, what the benefits of the merger are, uh, I, I think virtually all of the brokers now are on site with, you know, with, with the rationale and, and what we've created as NorthStandard and most of our business.

Whether it's through our specialty lines, through our, our, our, our sector blue water business, uh, comes through brokers. So we, it's very important to us that, that brokers are, are on side.

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[00:08:03] Jeremy Grose: Um, yes, my own. Challenges, I think resilience has been, is a question for us or, or a challenge for us, um, over the course of the last year. 'cause there's been so much to do. Describing it as a challenge is probably the wrong way to put the, the work that we have put into building our relationship of working together.

I mean, that, that's a, you know, that's been a, a work that has involved quite a. Lot of effort, not because we are particularly difficult people, of course, but you know, having two people running a business, we need to be able to work very, very closely together, understand, you know, how we in individually make decisions and then how can we can make them together, uh, and trusting each other very well.

And we've had a lot of support on that and we, we knew that that was going to be an issue, uh, that we needed to make work really well. And, um, we engaged with a, with a coach. Early on, uh, he's a, a chap who's does a lot of work with sports people and building teams and things, and, and that's been really, really helpful to us.

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The most important thing that we've learned probably from, from working with a coach is more about ourselves in particular when when to say, um, I'm not comfortable with this. Let's talk about it, et cetera. And yeah, we're based in different locations most of the time, although we have spent a huge amount of time together, as Jeremy said, I think it was something we recognized that could be a challenge, and I think we've tackled it well.

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How's North Standard adapted to, uh, the global events. First of all, Jeremy.

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Than we would've otherwise had been able to do individually. And that's been really important to be able to, you know, to, to do in, in where there, there are new challenges, new challenges, particularly around the geopolitics. And we've had, we've got some amazing people that do some fantastic work on that.

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It, it's, it's moving so quickly I think in that, in that geopolitical space in particular. So we, we have to define that and it is one of support. You know, we, we, we can't make the law. We are there to support and to help, and I think the same is true. On, on the more the, the climate on Decarbonisation shipping is on a decarbonisation journey and, and shipping wants it.

Um, and, and I think often there's press that shipping doesn't want it is resistant. That's not the case. Shipping wants it with a pace that it can deal with and with the support, with the infrastructure that allows shipping to continue to deliver. And our role is to help to support that, to help to support our members, our, our ship owners through that, through that journey.

So rather it's not just a case of, of dealing with the claims when they arise, or the casualties or, or the problems that may arise from day-to-Day operations of shipping. But it's helping our members to deal with regulations that come along and sometimes being conduit between them and regulators or governments to explain the needs of the shipping industry.

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[00:12:42] Paul Jennings: The office on the horizon is, is in Korea. It's part of our Asia-Pacific footprint, which is a very important part of the combined, the Combined Club of NorthStandard. Over 30% of our business is within the Asia-Pacific region. I. One of the early successes, I think we, we, we found was actually the two offices in Singapore coming together under one roof.

It was partly fortuitous 'cause the lease on one building expired and we had to put people together, together quite quickly. But it was a real catalyst for, for that team. It's our largest team for people outside of the UK as situated in Singapore, nearly 60 people. And, and they came together really quickly and, and it, it then really became a footprint, I think for, for our other officers.

Um, delivery of. Of service locally is, is really important as well. Majority of our people sit within the UK in our two offices in, in London and Newcastle, but increasingly we, we want a local presence where we can actually work with our, our, our members and our customers in the local areas. I.

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[00:13:45] Jeremy Grose: I think two of the initiatives that, that we've actually already put into place are external affairs activities and NorthStandard Academy on on external affairs We. recognise that, that there's so much more interest and so much more involvement from policymakers in the world of shipping and financial services as it affects shipping.

And so we wanted to be able to advocate well for on behalf of our members, and we are looking to build relationships with policymakers and and so on. So that's a really important part. The other thing is NorthStandard Academy, we recognised when we started out that there were quite a lot of activities being done by both North and Standard on training, both internally and externally, but there was a great opportunity there to, to harness all of that activity and, and, and maybe make something more of it, working with our members, working with our people.

And perhaps making connections into academic institutions and and, and so on so that we can provide something more for our members in terms of, um, of the, the delivery of, of knowledge and capability that we can give to them.

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[00:15:08] Paul Jennings: It's very important. We've been very fortunate to have the support of our. Of our ship members and our directors in creating a, a space and, and funding a space within the organization, within the new club, uh, to focus on, on CSR type activities. And, and, but what do I mean by that? I mean, yeah, from supporting maritime.

Based charities to supporting charities and organisations in our local areas. We are, we're conscious of, uh, to an extent that, that the difference economic differences between, uh, the north and south of the country and the difference we can make, I think, as a successful business in supporting those communities and.

As a mutual organisation. So a non-profit making organisation, which I guess is a, is a, is a difference as well. The ability to then be able to contribute to the community and to society that we operate within, uh, it is an important feature. I.

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And that's important as we bring the two companies together.

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[00:16:35] Paul Jennings: Something that we're working on now, we were working individually is what sustainability means to NorthStandard and, and in the wider sense of sustainability for the business. Now, that's, that's, that's creating and, and maintaining sustainable business so we can continue to look after our members and customers, but also really importantly that we've got a sustainable business that all of our people want to be part of.

New people want to join it. That's a really, really important focus for us and, and we are looking at that at the moment to define it specifically, what that will mean for North Standard. We don't just wanna take something off the shelf. We wanna create something that's special for us.

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[00:17:31] Jeremy Grose: Modern and viable. I think that means that we need to make sure that we've got. Uh, a response to whatever the new challenge is that comes over the horizon. And over the course of the last couple of years, we've seen some extraordinary changes and some extraordinary challenges, and I think there will be very many more.

I. We need to be able to adapt, and I think we've demonstrated that we can, we can change and, and adapt, but we've got to be able to meet the new challenges that when they arise, perhaps by learning new skills, deploying resources in the right way when we need to, um, being able to learn the different ways in which technology or, or, or changing environment impacts our members.

And then we were able to be able to support them.

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[00:18:29] Paul Jennings: The, the two, two I would, I would identify, I think is the geopolitical situation. I think governments, uh, decided, well, probably 10, 15 years ago, but the focus is very clear now that the global trade is a clear way of enforcing political aims. I. Political objectives by suppressing or controlling, putting sanctions on global trade that's here to stay, that that isn't going to change.

And we, we've seen that very, very clearly in terms of what's been going on with Russia and Ukraine and, and still we see that with Iran and Venezuela and others. So that, that's a new norm that, that we all have to adapt to, that ship owners have to adapt to. I think the other changing environment is, is the decarbonisation of the, the, the whole climate debate.

It is, it is happening. Um, there are some really fast adapters of that or adopters of that within shipping. And we, we can see, we can see that moving at a pace and I think that that's a norm that, that all ship owners will have to deal with going forward. I.

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[00:19:45] Jeremy Grose: I think the shipping market that we. Serve would've changed quite a lot and uh, therefore we would've had to adapt as well. Um, we'll have people with different skills, probably a lot more knowledge on, on areas that we're just beginning to build up knowledge now I think we really should expect to see our business much bigger.

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I'd like to think we could achieve that. What would be really great. If, if we are just talking about NorthStandard, no more mentions of merger and acceptance. The merger was the right thing to do and has been successful.

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I'm Kate Borsay. Thanks for listening.

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