The Britannia Steam Ship Insurance (Britannia P&I) and the UK P&I Club are in talks over a possible merger, in the latest potential consolidation in the marine mutual insurance sector.

In a joint statement the two clubs said their boards would now begin a process to determine whether the merger would be possible and beneficial to their respective memberships. The decision on whether to proceed with a merger is set for later in the year, during a series of special general meetings.

The UK Club said: “This development results from an active process of the Club board over recent months in which it has examined the Club’s strategic options for the future, and where the key drivers include the preservation of the mutual P&I system, and achieving a scale that enables the most efficient capital structure and cost effective insurance.”

The talks are concurrent with discussions between managing companies Thomas Miller and Tindall Riley, which would also lead to a merger of the respective businesses should the Clubs decide to merge.

The news follows a positive renewal season for the UK P&I club, which experienced a year-on-year net increase of 8.5m entered tonnes taking mutual-owned tonnage to 135m tonnes, an increase of 6.5%.

In 2014 another International Group club North P&I merged with Sunderland Marine Mutual Insurance.