Leading UK marine insurers Sunderland Marine Mutual Insurance and North East P&I Association have formed a strategic alliance, starting with a reinsurance deal.

The pair are both based in the north of England, although SMMI has offices around the world, including in Australia and New Zealand.

They have revealed they are planning a series of “collaborative ventures,” the first of which is North’s reinsuring of SMMI’s P&I liability policies dating from January 1 2012.

They have assured the market there is no forthcoming merger.

While North specialises in large scale shipping insurance, SMMI is focused on the smaller end of the marine market – commercial fishing boats, small craft and aquaculture risks. Its P&I premiums make up 20% of its £74 million ($109.11 million) yearly income.

The ramifications on the Australian operations of SMMI are yet to be revealed.

SMMI’s Melbourne branch manager Michael Gristwood told insuranceNEWS.com.au it is “still too early to say” what might come of the alliance.

However, it could be a conduit for North to expand deeper into the Pacific region’s shipping industry.

North MD Alan Wilson says “the geographic positioning of North’s and SMMI’s global office networks will also provide potential for growth”.

Both companies are mutuals with long histories. SMMI was founded 130 years ago and Nepia is 152 years old.