NorthStandard - Experts & Thought Leaders

NorthStandard has advised Members of a 5% increase in P&I premiums for the marine insurance year, starting 20 February 2026, to reflect ongoing market unpredictability and risk. The global marine insurer projects a rise in premium income for 2025-26, as well as better returns on investments, higher reserves, and continued success for its diversification strategy. However, it believes a modest increase for 2026-27 is prudent in the current risk environment. S&P Global ‘A’ rating Based on its position eight months into the insurance year, NorthStandard projects premium income of US$930 million for 2025-26 against US$886 million in the previous year, and free reserves of US$900 million (US$800 million). Investment returns are currently predicted to rise to over 6%, up from 5.9% in 2024-25. The Club maintains its S&P Global ‘A’ rating, with capital strength remaining ‘Stable AAA.’ Its improved capital position has also allowed it to allocate more money to growth assets within the investment portfolio. While the claims environment is also relatively benign compared to last year’s large number of claim referrals to the International Group (IG) pool, the Club nonetheless believes caution is essential. NorthStandard’s investments “NorthStandard’s investments continue to perform, which is both good for our balance sheet and necessary to maintain our robust underwriting position,” commented Cesare d’Amico, Chair, NorthStandard. He adds, “However, a better claims scenario this year must be seen against a background of inflation and volatility. And whilst the claims on the IG so far are fewer, they are once again very large, and the pattern of large claims costing more continues.” Inevitable consequences for routing decisions Based on favourable conditions in its retained claims, NorthStandard projects a year-end combined ratio of 104%, which is 10% lower than 2024-25. However, geopolitical-driven disruption to major trade lanes continues, with inevitable consequences for routing decisions and contract terms, while scrapping rates remain subdued. Ship fires and other complex claims also bring unpredictability. Unfolding strategy of diversification “This year’s cautious outlook provides further evidence of the logic behind our unfolding strategy of diversification,” commented Jeremy Grose, Managing Director, NorthStandard. He adds, “Our specialty lines are delivering positive performance across the board. Their average combined ratio of under 90% over a five-year period is strong proof of their contribution to our continuing financial resilience.” New Marine & Energy Liabilities portfolio Further strategic initiatives this year have included the Club’s launch of a new Marine & Energy Liabilities portfolio in response to feedback from Members and brokers. Building on its established strength in Offshore & Renewables P&I, the new line provides liability cover beyond traditional P&I. The Club also launched a Hull & Machinery and P&I product to leverage its Sunderland Marine expertise and wider Coastal & Inland capabilities in a combined product offer. Current risk scenario “We will continue to develop with ambition, while maintaining the financial discipline and long-term thinking to underpin our enduring success,” commented Paul Jennings, Managing Director, NorthStandard. He adds, “The current risk scenario is not a perfect storm by any means, and the year-to-date is encouraging, but large claims remain inherently unpredictable. Our modest premium increase requirements this year are further vindication of our successful merger in 2023. In the interests of protecting our Members, we meet uncertainty with prudence to ensure that our underwriting position remains robust.”

NorthStandard has appointed Jack Marriott Smalley as its new Head of Underwriting for Asia Pacific, with effect from 3 November, 2025. Mr Marriott Smalley brings over 14 years of underwriting experience at NorthStandard to the role, including 11 years in Singapore, most recently serving as Head of Southeast Asia Pacific. His engagement with members, brokers, and partners has been pivotal in strengthening the Club’s presence across the region. Key leadership role In a key leadership role within NorthStandard, Mr Marriott Smalley will drive strategy to position NorthStandard as the Club of choice in one of the world's most dynamic marine insurance markets. His focus will be on continuing Club growth across Asia Pacific, on developing talent within the region, and on closer collaboration with members, brokers and joint venture partners.  Jack's extensive expertise Commenting on the appointment, Mike Hustler, NorthStandard's new Head of Asia Pacific, said: "Jack's extensive expertise and understanding of the region make him ideally suited to lead our underwriting strategy in Asia Pacific." "We are confident that under his leadership, NorthStandard will continue to grow and deliver exceptional value to our members." Drive sustainable growth Jack Marriott Smalley added: "I'm delighted to take on this role and excited about the opportunities ahead. Asia Pacific is a dynamic and diverse region and having worked across its markets for over a decade, I'm passionate about continuing to build strong relationships and delivering underwriting excellence." "I look forward to working closely with our talented team, members, brokers and partners to build on our strong foundations and drive sustainable growth for the Club."

NorthStandard has announced Michael Hustler as its new Head of Asia Pacific, in an appointment which reinforces the global marine insurer’s focus on growth, service expansion and diversification in the region. With a formal start date of 27th October, Mr Hustler brings 16 years of Claims and Underwriting with NorthStandard to his new role – most recently as Head of Underwriting, Asia Pacific. As Head of Asia Pacific, he replaces David Roberts, who will leave NorthStandard in February 2026. NorthStandard’s day-to-day firm operations Located in Singapore, Mr Hustler will take responsibility for NorthStandard’s day-to-day business operations across the Asia Pacific region, working closely with local teams to deliver and develop services to members. He will also ensure regional initiatives align with the club’s overall priorities, reporting to NorthStandard Chief Strategy Officer, Ed Davies. “Mike’s risk management expertise and understanding of member needs have been making a vital contribution to growing our Asia Pacific presence and relationships, while our underwriting strategy across the region has benefitted significantly from his leadership,” said Mr Davies. Development of NorthStandard's services “I am thrilled to take on this role at such a crucial time in the development of NorthStandard's services in the Asia Pacific region. I look forward to playing my part in the continued growth of NorthStandard's market-leading services,” added Mr Hustler. North Standard operates from nine locations across Asia Pacific with offices in Singapore, Tokyo, Imabari, Shanghai, Seoul, Hong Kong, Melbourne, Brisbane and Nelson. Outstanding service and collaborative approach Jeremy Grose, Managing Director, NorthStandard, commented: “Matching the ambitions of Asia Pacific economies is pivotal for future success in P&I, FD&D and specialist marine insurance lines." "Mike’s appointment reflects our commitment to drive forward with our strategy to grow and serve these dynamic and diversified needs. We have an exceptionally talented team in the region, delivering outstanding service and a collaborative approach to grow member engagement.”

FuelEU Maritime came into effect on Jan. 1, 2025. It is part of the European Union’s Fit for 55 package and applies to commercial vessels of 5000GT (gross tonnage) and over used for the transport of cargo or passengers and calling at EU ports. Vessels are required to achieve a greenhouse gas (GHG) intensity of energy below a particular level. That level reduces over time and by 2050 the reduction target is 80% compared to 2020 reference levels. GHG intensity of energy obligations “FuelEU is designed to reduce the energy intensity of fuel used by ships and to drive the uptake of alternative fuels,” says Helen Barden, Director – External Affairs, NorthStandard, an insurer providing Protection and Indemnity (P&I) coverage. She adds, “For vessels that do not meet the GHG intensity of energy obligations, there are options for borrowing compliance from future years, pooling the vessel with better-performing vessel(s) or paying a penalty. For container and passenger ships there are requirements to connect to shore power from 2030.” Ship’s energy intensity  FuelEU Maritime measures a ship’s energy intensity over a full reporting year on a well-to-wake basis FuelEU Maritime measures a ship’s energy intensity over a full reporting year on a well-to-wake basis. Well-to-wake therefore includes emissions from well (i.e., production) to tank (i.e., on the ship) plus tank-to-wake (i.e., it propels the ship). Assessing the energy intensity on a well-to-wake basis, rather than simply tank-to-wake, provides a better reflection of the emissions created during the lifecycle of a marine fuel.  Wind-assisted propulsion systems “There are many energy efficiency technologies on the market, such as improving the efficiency of hull coatings, or making changes to the bulbous bow or propeller, but these go to improving the energy efficiency and are not included in the calculation to improve the energy intensity of the fuel used,” says Helen Barden.   However, wind-assisted propulsion systems receive a Wind Reward Factor in the regulation, which means this technology does impact the vessel’s GHG intensity rating. Of course, zero or near zero fuels and renewable fuels of non-biological origin also go to the GHG intensity rating. Compliance of FuelEU The compliance of FuelEU rests with the DOC holder under the ISM code While the compliance of FuelEU rests with the Document of Compliance (DOC) holder under the International Safety Management (ISM) code, which may well be the ship manager rather than the registered owner, the ship manager will in reality want to pass the liability for compliance on to the ship owner, says Barden. The ship owner (and indeed possibly together with the charterer depending on the length of the charter party and nature of the commercial relationship) will need to produce a strategy for compliance with FuelEU Maritime given there are different options for compliance available, she says.  Lower energy intensity fuels and energy sources Helen Barden says payment of the penalty should be the last resort. “Not only is this likely to be the most expensive option, but it also comes with implications for future years in the form of a multiplication factor,” she states.  Helen Barden adds, “Whether pooling, using lower energy intensity fuels and energy sources, or borrowing compliance from future years as part of a strategy will depend on many variables and, therefore, a compliance strategy should be given considered thought. This will also impact on the terms of any contracts.”  Respect of GHG energy intensity Financial penalties apply to any company that does not meet its compliance obligations There are pooling platforms on the market now, such as Bettersea, which is currently offered to NorthStandard members at a preferential rate. Financial penalties apply to any company that does not meet its compliance obligations in respect of GHG energy intensity. Failing to comply for two or more consecutive years will see the penalty factor multiplied, while failure to present a FuelEU Maritime certificate of compliance for two or more consecutive reporting periods could result in a ship being banned from EU ports.  Vessel’s compliance balance If a vessel exceeds the compliance requirements and so has a positive compliance balance for a reporting period, this “surplus” can either be pooled or can be banked for compliance in future years. Parties will need to consider whether charterers will get the full benefit of compliance pooling, banking or borrowing, and how this will work where the charter party does not cover the full reporting year. A vessel’s compliance balance may not be included in more than one pool in the same reporting period, but the vessel may be switched to a different pool in a different reporting period. Responsibility for FuelEU compliance rests The ultimate responsibility for FuelEU compliance rests with the ISM company The ultimate responsibility for FuelEU compliance rests with the ISM company (i.e., the Document of Compliance holder under the ISM Code) and, therefore, careful consideration must be given to the contractual implications of FuelEU Maritime. The Baltic and International Maritime Council (BIMCO) has produced a FuelEU Maritime Clause for Time Charter Parties and a Clause for ship management agreements, too, to help support owners, charterers, and ship managers in this regard. However, these clauses cannot just be inserted without consideration. As mentioned earlier, things like the compliance strategy should be thought through as this will impact the wording used in the clause, says Barden. Advice on the BIMCO clause “The BIMCO clauses are certainly a helpful starting point, but ship managers, ship owners and charterers must consider the terms carefully and, if necessary, make amendments,” says Helen Barden.  She adds, “We have been assisting a number of our members with advice on the BIMCO clause in their particular circumstances, and indeed non-industry clauses that have also been proposed.”

The Dark Fleet refers to a network of vessels that operate outside of standard maritime regulations, often used to transport sanctioned goods such as oil. These shadowy vessels are also referred to by terms such as Parallel Fleet and/or Shadow, Gray or Ghost fleet. The terms are all manifestations of the same thing – ships that are owned, structured, and operated to avoid exposure to sanctions. Fleet of ships “In fact I would prefer that we use the term Parallel Fleet because it more accurately describes what it is,” says Mike Salthouse, Head of External Affairs, of NorthStandard, a Protection and Indemnity (P&I) insurer. “Specifically, it is a fleet of ships operating in parallel to mainstream shipping while avoiding use of service providers that are subject to sanctions legislation.” Modern shipping sanctions Sanctions were to be enforced not just against the sanctions-breaking vessel but also the services Modern shipping sanctions can be traced back to the introduction of the U.S. Comprehensive Iran Sanctions Accountability and Divestment Act 2010 or “CISADA”.  Under CISADA for the first time, sanctions were to be enforced not just against the sanctions-breaking vessel but also the services (for example insurance, class, flag, banks) that the vessel used. EU/G7 Coalition adopting sanctions As a result, all maritime service providers sought to distance themselves and introduce contractual termination clauses in their service contracts forcing such vessels to either trade without such services or to access them from non-sanctioning jurisdictions. This led immediately to the creation of mainly Iranian ships that could continue to carry cargoes subject to western economic sanctions – such as Iranian oil. However, the fleet has grown exponentially following the EU/G7 Coalition adopting sanctions targeting Russian shipping. Today the majority (but not all) of the Dark Fleet is engaged carrying Russian cargoes – but other trades include Iran, North Korea, and Venezuela. Protection of the marine environment Dark Fleet undermines transparent governance policies that ensure the welfare and safety “It might be that a removal of Russian sanctions would remove the need for such a fleet,” adds Salthouse. “But for so long as nations use maritime sanctions as a foreign policy tool, my own view is that the Dark Fleet phenomenon will continue to facilitate sanctioned trades.” The Dark Fleet undermines transparent governance policies that ensure the welfare and safety of those on board and the protection of the marine environment. In recent years, the safety of tankers has improved significantly. These improvements have been driven by factors such as greater operational oversight from the oil majors, younger double hull vessels, greater operational scrutiny, and more rigorous legislation. Safety has been prioritised over all else. Transport oil using ships and services “The commercial dynamics that apply to the Dark Fleet are very different,” says Salthouse. “The overwhelming commercial imperative is not safety but to transport oil using ships and services to which sanctions legislation does not apply. As such, the customer and regulatory oversight is much reduced.” The vessels used by the Dark Fleet also tend to be older. Even if it were possible to find shipyards that were prepared to build for use carrying sanctioned cargoes (and so risk secondary sanctions depriving them of access to western financial markets and insurers), the long build times mean that such ships would not become available for several years. As such, the vessels that comprise the Dark Fleet tend to be end-of-life and aged 15 years or older. Commercial reinsurance markets The insurers of the ship will likely have been unable to access commercial reinsurance markets used If and when an accident happens, the ability of the insurer to respond by using commercial salvors and pollution responders will be curtailed by sanctions legislation, and the insurers of the ship will likely have been unable to access commercial reinsurance markets commonly used to access the high levels of cover required to fully compensate victims. Sanctioning individual ships is an effective way of addressing the Dark Fleet because shipping that trades internationally invariably needs access to western financial and service markets, which a designation deprives them of. Collaboration with mainstream shipping EU/G7 Coalition States to date have designated over 100 vessels, but in practical terms, the Dark Fleet is much larger than this – somewhere in the region 600 to 1000 vessels – so more needs to be done, says Salthouse. Thought also needs to be given as to how to dispose of old designated tonnage (as designation will prevent scrapping) whilst at the same time addressing the supply side so that designated ships cannot simply be replaced. “That can only be achieved in collaboration with mainstream shipping which should be consulted and partner with governments to achieve their aim,” says Salthouse. Majority of shipowners and service Dark Fleet will thrive for so long as maritime sanctions are deployed by states as a means of foreign policy goals Without concerted state action delving with the existing fleet and its access to new ships, the Dark Fleet will thrive for so long as maritime sanctions are deployed by states as a means of achieving their foreign policy goals. The cost of compliance to mainstream shipping is huge. The vast majority of shipowners and service providers deploy significant resources to avoid inadvertently contravening applicable sanctions. EU/G7 Coalition partners should recognise that and work with the shipping industry to marginalise the commercial space served by the Parallel/Dark Fleet rather than simply imposing ever greater and more complex compliance requirements, comments Salthouse. Use of EU/G7 Coalition service In a majority of cases, the Parallel Fleet is not breaking any laws. With the exception of the UN sanctions programme directed at North Korea, the Parallel/Dark Fleet can trade perfectly lawfully. For example, it is not illegal for a Russian flagged ship, insured in Russia, classed in Russia and trading with non-EU/G7 Coalition partners to transport Russian oil sold above the price cap through international waters to non-EU/G7 Coalition states provided the trade does not make use of EU/G7 Coalition service providers. Use of established service providers The Parallel/Dark Fleet is bad for shipping and undermines EU/G7, and on occasions, UN sanctions programmes, says Salthouse. States cannot control a trade when the ships carrying the cargoes and the service providers involved are not subject to the jurisdiction of that State. Similarly, when ships sink and cause pollution, the whole shipping industry suffers by association, and the additional complexities involved in responding to a casualty that cannot make use of established service providers could make a bad situation much worse.