Many Clubs of the International Group of P&I Clubs have been actively engaging in the Hull and Machinery (H&M) market, either by establishing syndicates in the Lloyd's market or by acquiring or backing established H&M facilities. This trend takes place in light of the continuous losses the market underwriters have sustained for a number of years (excluding the last two years) and topped with recorded overcapacity. Although, this may seem as a radical development, it should not be forgotten that some of the present P&I Clubs are the remote descendants of the many small H&M insurance clubs that were formed by British shipowners in the 18th century.

On the other hand, there have been clubs who have been successful in both classes of business for decades, either at a fixed cost or on a mutual basis. Although, the majority of these examples are limited in terms of scope of cover, size and age of vessels covered etc they do provide a good indication that the “one stop shop” approach has been gaining momentum in the market. Driven also by the current regulatory developments of the Solvency II directive many Clubs have amended their strategy and walk now all the way down to risk diversification, establishing alternative ways of investing the vast amounts of accumulated free reserves for the benefit of their membership.

A few advantages of this development include additional good rated capacity in the market, economies of scale as well as increased bargaining power for members. Nevertheless, one should not forget the dark side of the moon; underwriters might be less flexible in both classes of business even if one is under performing. Additionally, one claim might be prejudiced by the single view of the same provider in a complex claim.