UK P&I clubs split on post-Brexit European locations

Six clubs indicate favoured locations including Dublin and Amsterdam

The six UK-domiciled protection-and-indemnity clubs are heading in different directions as they establish post-Brexit European operations.

No decisions have been announced but news of the favoured locations is emerging from the autumn meetings of the clubs’ shipowner boards.

Luxembourg was once seen as the leading contender as it is an established insurance domicile with the West of England and Shipowners’ clubs already regulated there.

But it appears likely to pick up only the Britannia Club, which is in the final stages of deciding a new European domicile.

Dublin is set to win both the North of England and Standard clubs, while the UK Club is understood to be heading for Amsterdam.

Amsterdam is also understood to be the location most favoured by Steamship Mutual although it has not ruled out Copenhagen, which has marketing advantages in terms of being close to key Danish owners.

The North of England Club’s preference for Dublin has come as a surprise as there are better flight connections from its Newcastle base to Amsterdam than to the Irish capital.

The London Club — the latest P&I mutual to seek no general increase at the February renewal — has yet to finalise its contingency planning with the likely location yet to emerge.

One surprise is that Brussels, as the hub of the European Union, has not won any of the clubs although Lloyd’s of London, MS Amlin and QBE have decided to locate there.

Greece also had hopes of attracting the P&I clubs, as many already have outposts in Piraeus, but other centres had more established financial clout.

The deadline is looming for obtaining regulatory approval and beginning the task of securing offices and staff to retain "passporting" rights to do business in the 27 remaining EU states once the UK withdraws.

Although the Brexit referendum result lies behind the decision of the P&I clubs to open operations within the single market, London will remain the hub of the P&I world.

The new European outposts are set to have teams of between four and a dozen executives, with a level of decision making based locally to comply with regulatory requirements.

But most claims handling and a large majority of P&I clubs' staff will remain in the UK.

The six clubs who are establishing new EU operations account for half of the tonnage and premiums written by the 13 International Group mutuals.

Establishing new EU operations is proving relatively pricey, with set-up costs that can run to more than $1m and annual running costs that may not be dissimilar.