May 1, 2018
While the North East’s world-famous shipbuilding industry may now be confined to the history books, the region is still very much a global leader in one aspect of the sector.
Through the continuing presence of North P&I in the North East – one of the world’s biggest shipping insurers which was set up in the 1800s, during the region’s shipbuilding heyday – the region retains a reputation at the very forefront of the shipping and seafaring sectors.
As the insurers of approximately one in every eight ships in the world, with an A rating from Standard & Poors for 14 consecutive years and a turnover of around $400 million, they are one of only 13 businesses, or IG clubs as they are known, in the world to offer a bespoke range of insurance services to shipping companies.
North P&I is proudly based in Newcastle, in one of the most impressive and noticeable buildings on the city’s Quayside, near to the Pitcher and Piano (and apparently often mistaken for a hotel or gym). But while the business – which became North P&I in 1998, following a merger between Newcastle P&I and the North P&I Club, and also acquired Sunderland Marine in 2014 – enjoys a huge reputation on a global scale, its renown in its home region is rather less.
North P&I, which employs 270 people in Newcastle and a further 50 in its offices around the world, has been referred to as ‘the biggest firm in the city people have never heard of’ – something which, in part, may be due to the fact the firm has no North East client base, with its work coming from across the globe.
While, for some firms, that would lead to the contemplation of relocation to where the work originates from, for Paul Jennings, managing director of North P&I, nothing could be further from his mind.
“We are based in Newcastle because we love it here,” he says, simply but sincerely.
There is no reason for us to move. I suppose you could say the travelling up and down to London and around the world could be seen as a ‘disadvantage’ of being based here, but there is so much more to it. Newcastle is a great place to live and work, the quality of life up here is something you cannot get elsewhere.
“A lot of very successful people who are from Newcastle, or have studied here, want to come back here as it is such a great place to live with your family. You can live in somewhere quiet, well outside the city centre, without the 1.5 hour commute it takes in London. And at North P&I, as well as opportunities for progression and development, we offer the flexibility for our people to enjoy their lives outside of work. We love being in Newcastle and believe our team do, too.”
Paul himself has been in Newcastle since 1981, when he moved from Suffolk – coincidentally, only three miles away from Felixstowe, which today is home to the UK’s largest container port – to study law at Northumbria University, and found he never wanted to leave.
He joined Newcastle P&I, then based in Newcastle’s Cloth Market, in 1984, working his way through the ranks to become managing director. He became joint managing director of North P&I post-merger, alongside Alan Wilson, who headed North P&I Club.
The growth since the merger has been significant – in 1998, the company insured around 20 million tonnes of shipping and had a market share of around 1 per cent. Now, that has risen to 140 million tonnes, which represents a 12 per cent share of the market.
But while North P&I – which prides itself on enabling its members to trade with confidence – has seen huge growth, as with every business trading on an international scale, the impending unknown of Brexit looms large. The company have been quick to put contingency plans in place to allow their work to continue through the establishment of an Irish subsidiary, but the fact that the position around trading and ‘passporting’ in the EU has still not been clarified is clearly a source of frustration.
Paul says: “Being honest about it, Brexit has no advantages for us whatsoever. Europe accounts for around 40 percent of our business. The uncertainty around what will happen from March 2019 and whether we will have a hard Brexit has meant we developed contingency plans – the establishment of the company in Dublin – so that our members shouldn’t see anything different going forward. But for us, it will mean adding £2 million a year to our bottom line, and around £700,000 initially in set-up fees.”
But while the impact of Brexit inevitably poses problems for the business, North P&I is looking at diversification and expansion of its current assets as a means to remain highly competitive.
Its Sunderland Marine division – which kept its identity post-acquisition due to its strong reputation in its own right – is at the centre of expansion plans, with its fishing and aquaculture specialisms viewed as key areas of growth globally. The business is already particularly strong in Australia, New Zealand and Canada, with plans to build on that success through expanding its services across Europe and Asia.
North P&I also plans to capitalise on its plentiful in-house expertise by generating further fee income from its team of lawyers – which, with 38 shipping specialists, makes it the biggest team outside of London – and its nine-strong team of ex-mariners who survey members’ assets as part of their loss prevention efforts. Both teams are seen as having the potential to expand, not necessarily in terms of numbers, but in profile and particularly fees.
And in one further major change for the business, Alan Wilson, for 20 years Paul’s joint managing director, with whom he shares an office, is stepping down on May 1. He will remain with North P&I as executive director, but Paul concedes that while that will be a major change for the business – and has seen a new management structure, diverting away from its unusual joint managing director model – it is a challenge for him personally.
“It has often been said I spend more time with Alan than I do my wife, so yes, it will be a big change,” laughs Paul.
“We have worked together since the merger and we have effectively shared the roles of CEO, COO and CFO between us, I have always done the bulk of the travelling and outward-facing work, and he has made sure everything is running here.
It is a big change, but we have a great bunch of people in the organisation and we are very confident about the future. We have put a new management structure in place and we’re a great team. And of course Alan will not be leaving altogether, he will still be here for a couple of days a week, and I will value that.
But while change is happening in many areas of North P&I, one area which will continue is its commitment to the community in which it is based. Despite its low profile in Newcastle, the business contributes thousands of pounds each year to local charities and good causes, with charity partners including the RNLI, Ocean Youth Trust and Newcastle Falcons Community Foundation.
“We are very proud to be based here and to give something back to the community. We have been in Newcastle for over 200 years, and while we might not have a client base here anymore, we are committed to Newcastle and to our CSR activity to support the community and local charities,” says Paul.
“We love being here and passionately believe we are a good company to work for with good working conditions. North P&I are invested in Newcastle and the North East and that will continue, absolutely.”