ONE of the world’s largest marine insurance operations could be formed in the new year if shareholders approve an ambitious merger proposal. 

A framework agreement to join forces has been signed by Durham City-based Sunderland Marine Mutual Insurance (SMMI) Company Limited, one of the world’s leading insurers of fishing vessels, small craft, coastal traders and the aquaculture industry, and Newcastle's North of England P&I Association (North), the world’s second largest mutual liability insurer for shipowners.

Both companies have been trading since the nineteenth century. 

They now operate offices worldwide and generate a combined premium income of more than £300m and employ about 400 people, more than two-thirds of which are based in the North-East. 

Although both company’s roots have been firmly planted in the North-East, SMMI and North have established branch offices in Europe, Asia Pacific and North America.

Paul Jennings, North’s joint managing director said: "North and SMMI are two of the longest established businesses in the region, with highly respected reputations for service excellence and the provision of financially secure marine insurance to the global marine and aquaculture industries.

"Through this merger, we will form one of the world’s largest marine insurance operations, capable of providing considerable financial stability for policyholders, maintaining service excellence and enhancing our joint competitive position."

Geoff Parkinson, SMMI’s chief executive, said: "SMMI and North are two of the longest established and most successful marine insurance companies in north-east England and have long standing mutual respect for each other, culminating in a strategic alliance in January 2012.

"A combined group will be a major force in the global marine insurance markets by virtue of our diversification and capacity."

North’s joint managing director Alan Wilson, concluded: ‘This is a very exciting opportunity for both companies, combining North’s international portfolio of high quality, larger ships with SMMI’s wide spread of smaller vessel and aquaculture risks.

"Together we can offer our members a more diverse product range and develop new sources of business income to provide greater security and opportunities for all staff and suppliers."

The combined operation would result in the group having a cross section of personnel with exceptionally diverse and specialist skills and expertise in the marine insurance environment, the companies said.